California, Google’s paltry $250M million deal to fund newsroom blasted as ‘disastrous’ by critics

A controversial deal between Google and California lawmakers to fund local newsrooms has drawn scathing reviews from critics – with one key journalists’ union blasting the arrangement as a “shakedown” that would be “disastrous” for the industry.

Billed as a “first-in-the-nation partnership” to help cash-strapped publishers and save jobs, the deal allows Google and other Big Tech firms to escape legislation aimed at fixing the problem – such as a bill that would have required them to pay a share of ad revenue to news outlets.

The arrangement prompted outrage from the Media Guild of the West and state Democrats who argued that a local news publishers trade group, California Assemblywoman Buffy Wicks, Gov. Gavin Newsom and others who brokered the deal had let Google and its allies off the hook.

“California’s journalists and news workers oppose this disastrous deal with Google and condemn the news executives who consented to it in our names,” The Media Guild of the West said in a statement.

“The publishers who claim to represent our industry are celebrating an opaque deal involving taxpayer funds, a vague AI accelerator project that could very well destroy journalism jobs, and minimal financial commitments from Google to return the wealth this monopoly has stolen from our newsrooms,” the union added.

The deal includes nearly $250 million in funding over five years – with $110 million coming from Google, $70 million from state taxpayers and the final $70 million from private donors to fund a so-called “AI accelerator” nonprofit to develop tools for newsrooms, Politico reported.

Newsom described the deal as “a major breakthrough in ensuring the survival of newsrooms,” while Wicks said it “represents a cross-sector commitment to supporting a free and vibrant press.”

The California News Publishers Association said the deal is a “first step toward what we hope will become a comprehensive program to sustain local news in the long term, and we will push to see it grow in future years.”

Some California Democrats broke ranks to criticize the partnership. State Sen. Steve Glazer described Google’s offer as “completely inadequate” and said it “seriously undercuts our work toward a long-term solution.”

Glazer noted that Meta – which threatened last year to remove news articles for California’s Facebook and Instagram users if legislation was passed – were not involved in the deal.

Elsewhere, State Senate President Pro Tempore Mike McGuire highlighted “concerns that this proposal lacks sufficient funding for newspapers and local media, and doesn’t fully address the inequities facing the industry.”

Wicks’ press release announcing the partnership referenced Google parent Alphabet and OpenAI as participants. The extent of OpenAI’s involvement was not immediately clear.

Meta and OpenAI did not immediately return requests for comment.

“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,” Alphabet president of global affairs Kent Walker said in a statement.

Google had lobbied aggressively against state legislation aimed to securing compensation for publishers – at one point going as far as to block some news links in California within its search engine.

The company made $307 billion from digital advertising last year alone. Earlier this month, a federal judge ruled that Google is a “monopolist” that illegally dominates the online search market.

News Media Alliance – a nonprofit that represents more than 2,200 publishers, including The Post – said the deal “reinforces the need for federal legislation and potential court remedies to address this broken marketplace.”

“Google is a dominant monopoly that reaps significant revenue off scraping and repackaging quality news content, depriving publishers of the opportunity to monetize their content and reinvest in journalists,” News Media Alliance CEO Danielle Coffey said in a statement.