California lawmakers on Wednesday said they had reached a deal with Google to spend millions of dollars a year supporting newsrooms to stem the loss of journalists at a time when the search giant is gobbling up advertising revenues.
The first-of-its-kind deal, announced by Assemblymember Buffy Wicks (D) and her allies, will provide nearly $250 million in public and private funding over the next five years, most of which will go to newsrooms across the state — an amount that critics, including some of Wicks’s allies in the legislature, said was insufficient to solve a crisis that Google itself has worsened.
Google has committed $15 million to a new News Transformation Fund, to be administered by the University of California-Berkeley’s School of Journalism, and another $10 million to existing journalism programs. The company will commit at least another $10 million a year for the following four years to the UC-run fund, and another $10 million to other existing programs.
California will contribute $30 million to the News Transformation Fund in the first year and another $10 million a year for the following four years.
“As technology and innovation advance, it is critical that California continues to champion the vital role of journalism in our democracy,” Wicks said in a statement announcing the deal. “This partnership represents a cross-sector commitment to supporting a free and vibrant press, empowering local news outlets up and down the state to continue in their essential work.”
“This is just the beginning,” said Wicks, who chairs the Assembly’s appropriations committee.
Because the deal goes through a fund run by the university, it does not require legislative approval.
Wicks first proposed requiring tech giants to help pay for journalism in a bill she authored last year and then tabled. The agreement announced Wednesday is in lieu of passing her bill. It is also expected that the deal will supersede a competing proposal from Sen. Steven Glazer (D), chair of the Revenue and Taxation Committee, to tax tech companies to help prop up local news outlets.
Gov. Gavin Newsom (D) called the deal “a major breakthrough in ensuring the survival of newsrooms and bolstering local journalism across California.”
As part of the deal, Google will also help fund the launch of a national artificial intelligence accelerator, to be managed by a yet-to-be-named nonprofit organization. Google will spend $10 million to seed the accelerator and another $2.5 million to fund AI research. Wicks’s office said the fund would include contributions from other unnamed tech companies.
A source with knowledge of the deal said other tech companies have shown interest in joining the journalism fund. OpenAI, the artificial intelligence giant headquartered in Silicon Valley, will contribute resources but not money to the AI accelerator.
In a briefing on the deal, Wicks’s office said the News Transformation Fund would reserve 12% of funding for locally-focused publications and publications that target underrepresented groups. Its seven-member board will include representatives of ethnic media services, the Latino Media Collaborative, California Black Media and the Media Guild of the West, the union that represents reporters at the Los Angeles Times and other news outlets.
“This fund will help news outlets and journalists adapt to a changing landscape with new tools and funding to embrace emerging technologies,” Regina Wilson, executive director of California Black Media, said in a statement. “This is especially helpful for ethnic and community media which is comprised largely of under-resourced family businesses whose strongest connections are to their community.”
But skeptics — including a major journalist union and Glazer himself — said the deal fell short.
“Google’s offer is completely inadequate and massively short of matching their settlement agreement in Canada, in supporting on-the-ground local news reporting,” Glazer said in a statement. The search giant previously agreed to spend roughly $70 million U.S. dollars annually to bolster Canadian newsrooms as part of an agreement that allows Google to avoid being subject to a new journalism funding law.
Matt Pearce, president of the Media Guild of the West, which represents frontline journalists, said on X before the agreement was formally announced that it amounted to a “backroom deal” that allowed Google to “avoid regulation.”
“California shouldn’t accept an outcome that could cause more harm to journalism than good,” Pearce wrote in an update to his members on Tuesday that was also posted to X. “There’s too much at stake for the communities we serve.”
Kent Walker, president of global affairs and chief legal officer for Alphabet, Google’s parent company, praised the California deal in a statement.
“This public-private partnership builds on our long history of working with journalism and the local news ecosystem in our home state, while developing a national center of excellence on AI policy,” Walker said.
Within hours of being announced, the California agreement was being held up as having the potential to galvanize other states and the federal government to act to preserve local media. The News/Media Alliance, a leading media publishing organization, called on Congress to pass the federal Journalism Competition & Preservation Act.
“Today’s announcement reinforces the need for federal legislation and potential court remedies to address this broken marketplace,” Danielle Coffey, the News/Media Alliance’s president and CEO.
This story has been updated.