Poynter examines Google's deal with California local news publishers as an instructive case.

As they say, when we fight, we achieve incremental progress! That is how we feel about the local news agreement announced recently in California. Google agreed to donate funds specifically designated for local newsrooms as an exchange for legislature rejecting bills that would have increased Google’s pay even more. To understand why it was lower than it should have been, bear in mind that California saw its journalist numbers decline by 68% within just 20 years according to the Medill School of Journalism. So the loss of nearly 5,000 reporters translates into increased corruption, decreased accountability and an increase in polarization. To restore previous levels in California we would require at least $375 million from earned revenues, donations from foundations or government sources combined. California government and tech companies could contribute at least one-third of what Google pledges each year over five years; thus making a total contribution of at least $125 million per year if both entities combined their contributions into one fund, for an approximate total of $150 million annually. Unfortunately, Google only gives an average contribution per year over this time frame of about 11 million per year over this time span, while California state kicks in an additional average contribution each year of 14 million dollars on average. Google and the government in Canada have provided much larger financial contributions; there, Google pays $47 million annually despite earning substantially higher advertising revenues (an estimated $8.6 billion) here in California. Canadian government support for news media industry is over 600% greater. We must increase California levels of support while making sure this current deal doesn’t become the barometer of what’s possible or needed within United States borders. However, there are also several positive aspects and lessons for other states and Congress alike: prioritising local news over national, focusing on headcount rather than pageviews as measures of success. Under one California bill (the California Journalism Preservation Act) an earlier draft would have forced Google to provide both local and national media outlets such as People or Breitbart with financial subsidies based on traffic or number of links they appeared on platforms. However, under this deal they will support local newsrooms – where the crisis lies – using a formula which relies on the number of “news journalists.” Incorporating more reporters is part of this agreement; by subsidizing local reporting you get back more in return! Emergence of local news as a community asset and essential resource has gained increasing recognition over time, prompting growing outrage from media watchdog groups who view local journalism as something which affects them directly rather than simply an industry. A movement has taken shape treating local journalism as an essential ‘civic good’ essential for healthy functioning communities. That means taxpayer support may also be necessary (in addition to advertising revenue and subscription/donation revenue). New York, Illinois, California, New Jersey and Washington legislators recently pledged approximately $93 Million over the coming year for local news production. Do not weaken media to save it. While taxpayer support might be needed in times of emergency, we must endeavor not to undermine editorial independence in any way. As opposed to earlier efforts, neither the bills nor final deal empower elected officials with discretionary grant powers that could reward or punish media outlets; rather they establish a formula linked directly to editorial employee numbers. Though this policy may seem blunt, its incentives and standards should point in the right direction. Lawmakers need to evolve past a narrow understanding of local news landscape. Gone are the days when they could quickly call their trade association to learn of local news’ interests. Modern community news ecosystem is far-reaching: nonprofit newsrooms, neighborhood websites, ethnic newspapers, email newsletters and independent weeklies comprise this landscape as do public radio stations, TV stations, local cable TV news services, journalism schools as well as locally owned dailies and chain newspapers owned by hedge funds. Decision makers often seem stuck in time. In California, for instance, the governing board that will administer this deal does not include representatives from nonprofit organizations; furthermore, public radio was excluded from funding consideration. New York law has historically excluded nonprofits and “digitally only” community websites. Reconsider the way tech firms are treated by authorities. Technology companies cannot shoulder all of the responsibility for safeguarding local news alone; but we should expect them to play an integral part in financing a solution. They have emerged as major beneficiaries from the digital revolution – both through excellence and by abusing monopoly power – so it would only make sense that they help repair collateral damage caused by it. A popular idea up until recently was “bargaining codes.” Legislatures across the globe mandate Google’s compensation of publishers whose content appears on search engines or social media platforms; California’s version, The Local Journalism Preservation Act (AB886) has caused division in local news circles. Many smaller news outlets expressed disappointment because much of their money would have gone toward funding national media outlets and that such legislation might discourage Facebook and Google from running news stories, thus depressing traffic for these smaller publishers. After much consideration and consultation between major newsrooms and smaller outlets, another approach emerged quickly: a compromise compromise strategy between all sides could help sustain smaller news sites while giving national outlets their due share of funds. Eventually a solution came about that involved compromise negotiations among all involved. Sen. Glazer’s SB1327 provided local newsrooms with a refundable tax credit to hire or retain local reporters – paid for through fees imposed upon tech companies who use consumer data for targeted advertising purposes. Instead of targeting tech companies for taking content “steal” them from publishers by siphoning away advertising. SB1327 taxed not just Google but also Meta, Amazon and possibly other tech firms as it was more fair, comprehensive and did not create incentives for platforms to stop publishing news stories. “The little guys” can have an outsize influence. In California, Glazer’s bill appeared doomed as it required two-thirds approval before becoming law – as would-be supporters would need to defeat two powerful organizations such as Alphabet and Meta. Additionally, corporate newspaper chains declined to back this approach for fear that it would distract from their preferred option – the bargaining code bill – while remaining true to themselves and supporting what was best. But an unlikely coalition formed among small and medium-sized publishers, labor unions, community foundations, ethnic publications, civic groups and some chambers of commerce that provided support. And in an extraordinary turn of events, Senate Bill 14 passed 27-7! Google was put under immense pressure following this victory and passage of a bargaining code bill through the Assembly to reach an agreement, and must form an alliance based on local media that represents all communities at large across America. However, their efforts were ultimately ineffectual; many bills failed to pass into law, leading to significantly smaller settlement amounts than anticipated. Negotiators rejected Rebuild Local News’ proposal to add extra money for smaller players by guaranteeing them at least $25,000 per employee for their initial five employees. Both tech companies and trade associations representing major newspapers had vastly outspent this emerging coalition in spending terms. To paraphrase former Pro Publica CEO Richard Tofel: ‘We are using tactical reasoning against those using more robust arguments: Local news can and must remain nonpartisan.” Sponsors seeking minority-party votes in states without them need not worry; supporting local news should always appear nonpartisan. Conservative residents suffer the same effects, since news sources have vanished in rural and exurban areas. Hopeful that these Blue State victories will soon be joined by progress in red states where lawmakers are exploring policies with widespread appeal – tax credits for small businesses that advertise in local news. Rebuilding local journalism will require innovation from publishers and journalists as well as increased philanthropy as well as smart public policies; by learning from our past mistakes we should be able to devise sensible regulations which actually aid local news coverage.