California and tech giants near $242.5 million deal to fund 'journalism'

California state officials and major technology companies are close to finalizing a $242.5 million agreement to fund journalism, with a focus on local and ethnic news outlets.

This deal, initially reported by KCRA, would effectively halt pending legislation that sought to mandate tech companies to share a portion of their search and display revenue with newsrooms, Just The News reports.

The proposed arrangement would see the California government contributing $70 million, while Google would provide $172.5 million towards supporting newsrooms.

This agreement comes in lieu of the California Journalism Preservation Act, which would have required social media platforms and search engines to pay news organizations based on the frequency of their content appearing in feeds or search results.

According to Steve Waldman and Anna Brugman of Rebuild Local News, the latest draft includes a provision allocating 12% of the funds to "underserved" and "local" news outlets, potentially benefiting California's ethnic press and smaller news organizations with fewer than five employees.

However, the deal has not been met with universal approval. Media Guild West, representing California journalists, has voiced opposition. Matt Pearce, the guild's president, criticized the agreement, stating, "This isn't regulation. It's ratification of Google's monopoly over our newsrooms."

In contrast, California Governor Gavin Newsom has expressed support for the deal. In a statement, he said, "This agreement represents a major breakthrough in ensuring the survival of newsrooms and bolstering local journalism across California — leveraging substantial tech industry resources without imposing new taxes on Californians."

The state's $70 million contribution comes at a challenging time for California's finances, as the government recently closed a $47 billion budget deficit. The agreement, if finalized, could mark a significant shift in the relationship between tech companies and news organizations in the state.