Lessons from the California Journalism Legislative Debacle

Avoiding Newspeak and knife fights with gunslingers

Welcome to Second Rough Draft, a newsletter about journalism in our time, how it (often its business) is evolving, and the challenges it faces.

Earlier this month the federal government alleged that Google is a monopolist, reaping illegal monopoly profits, which strikes me as likely correct, even if not helpful to journalism. Even more recently, Google, undeterred, took the news industry to the cleaners in a battle in the California legislature in Sacramento.

This week I want to tell you what happened, and to try to draw some lessons for future news industry forays into the brutal world of what is politely referred to as “public policy,” but more colloquially as lobbying.

Rebuild Local News, an industry coalition led by the enormously astute Steve Waldman, estimates that just in California, building back what has been lost in local newsrooms would cost $375 million each and every year. A bill passed earlier this year in the State Senate would have provided even more than that—half a billion dollars annually from a tax on platforms. Another bill, originating in the Assembly, would have required platforms to negotiate subsidies with news organizations or pay new fees (read taxes) to the State.

Dropping the mask

Google, which spends millions on lobbying and lawyers with the same level of cost-consciousness that newsrooms display toward buying pizza, reacted angrily. Executives were heard to say that the news industry was being ungrateful for the handouts Google has offered over the years. Then they threatened to cut off Google News in California, and stop all support for news nationwide. In other words, the mask dropped. Google, it turns out, is no fonder of news than Facebook, which hasn’t hidden its own disdain for years now and is steadily eradicating news from its service. Google just wore a velvet glove over its mailed fist, while Facebook didn’t bother.

In the end, the Assembly sponsor and Google crafted a deal that, instead of $375 million a year, or $500 million a year, provides an average of $21 million (which, to save you the math, is less than 6% of $375 million) each year from Google, and for only five years, after which all bets seem to be off. Google’s new front-loaded first year payment is about one quarter of what it’s paying on a legislative deal in Canada, which has a population just a bit smaller than California.

Almost half of the overall money from Google comes from its agreeing not to stop, again for five years, the Google News Initiative payments it had already been making, ostensibly out of the goodness of its corporate heart. Facebook gets off scot-free, as does Amazon, another target of the draft bills.

There is a supposed commitment of another $30 million next year and $10 million per year thereafter from California taxpayer funds, but the fate of that element, which must be included in the budget, would appear at least somewhat in doubt in the State Senate, where both the sponsor of the big bill that passed and the most senior member of the chamber publicly expressed misgivings about the deal. Even if this appropriation passes, and again to save you the math, $10 million is less than 3% of the cost of rebuilding.

Google has also committed some new money to accelerate the adoption of AI, which is a bit like GM agreeing to spend to encourage the purchase of new electric vehicles. Not exactly a public-spirited move.

What are we to make of all this? First, as I have said when expressing misgivings about the big philanthropic initiative in our field, Press Forward, newsrooms are literally my favorite charity, so more money is better. That’s true even when it’s not enough, even when it’s being allocated and spent less than optimally, even if the motivations behind it are more self-interested than not.

And I am not saying that pursuing help from government is necessarily wrong, so long as the mechanism is content-neutral— that is, doesn’t leave political actors to choose coverage they want to reward or punish— which is a test these proposals met. I also recognize that proponents say this is only a beginning in California. That may be with respect to the appropriation of taxpayer funds, but it is also likely the end of money for news from the platforms, at least for the five year term of this deal.

Beyond all that, I see at least a couple of important lessons for newsrooms, and their associations and other representatives in the months and years ahead.

We are knife fighters at a gun fight

The first of these is that “public policy,” is not our native milieu. Our experience and expertise is in revealing its occasional corruption, not in joining in the deal-making ourselves. Particularly when contending with the platforms, we will always be overmatched in this arena, and that fact should place significant limitations on our expectations. Google, for instance, spends about as much each year lobbying just the federal government as it will continue to cough up under the Google News Initiative in California.

Getting too invested: “defeat is victory”

Next is that we need to remain true to our principles, including those of candor and independence.

The new money from Google comes with all sorts of exclusions. None of it will go to public broadcasters, which are struggling in California as elsewhere, or local television, which is showing its own signs of business strain, even as it remains a principal source of local news for many people. On the other hand, the hedge funds that own many of California’s remaining newspapers will be significant beneficiaries, and they helped push for this outcome.

None of the money will apparently go to any news organization with less than $100,000 in annual revenues, a threshold which accounts for well more than a third of all of the members of LION Publishers. So what did LION’s CEO say in response? “Lawmakers should be proud of this program,” which provides “immediate and needed relief.”

He wasn’t the only one to echo the Newspeak of Orwell’s Nineteen Eighty-Four (“war is peace; freedom is slavery”) in calling defeat victory. Three California publishers I deeply respect and like personally felt the need to lend their voices to the celebratory announcement of Google vanquishing legislators the publishers had considered their allies. One called it a “win for all Californians,” another termed it “ambitious.” This is the sort of puffery people in newsrooms make fun of every day. We ought to try to avoid doing it ourselves.

Yet, if we are going to play the legislative game, this sort of thing is going to happen more often. While trying to tell our readers that we stand outside of politics, and that they can count on us to reveal to them its foibles and follies, we will find ourselves praising politicians who have betrayed us, currying favor even as we seek to scrutinize, saying things we do not really mean. It might all be enough to make you wonder if the money on offer is really worth it.