Last August, Gov. Gavin Newsom hailed a “major breakthrough in ensuring the survival of newsrooms” with the announcement of a deal in which the state, search giant Google and others would provide nearly $250 million in public and private funding over five years to support California news publishers decimated by the digital age.
But Newsom this week trimmed the state’s opening contribution by two thirds in his proposed budget revision to close a $12 billion deficit that he blamed on a combination of economic impacts from President Donald Trump’s tariffs and soaring costs for Medi-Cal, the state’s health care for the poor, driven in part by the state making it available to immigrants without legal status.
The proposed budget shrinks California’s initial contribution from $30 million to $10 million for the 2025-26 fiscal year that starts in July.
“The sole reason for the reduction is more limited/fewer resources than projected in the January budget,” said H.D. Palmer, a spokesman for the state Department of Finance. “Now, we will see what the Legislature intends to do.”
The state’s contribution was hatched as a compromise settlement that would lead to the withdrawal of two bills that threatened to force payments from technology companies to news publishers for their content that helps drive the platforms’ financial success.
One was AB 886 by East Bay Assemblywoman Buffy Wicks, the Journalism Preservation Act, modeled on laws in Canada and Australia that require the tech giants to pay news publishers. The other was SB 1327, by former East Bay state Sen. Steve Glazer, which would have supported them through a tax on gathering user data.
Technology companies vigorously opposed the legislation, which the industry policy coalition Chamber of Progress called a “link-tax-funded news bailout.”
Publishers countered that dominant online platforms, especially those of Google and Meta, use news content and divert advertising revenue from news publications. They argued most Google searches end at the results page with answers snipped from online news articles that don’t require clicking through to the websites of news publishers that bore the cost of gathering and verifying the information. When readers do click through to publisher’s websites, they said, Google takes another 70% of each advertising dollar, thanks to its control of digital advertising technology.
In August, Wicks, an Oakland Democrat, announced a deal with the state and Google that would provide funding to support newsrooms and replace the proposed legislation. It called for California to pay $30 million this year and $10 million in each of the next four years into a journalism fund that was to be established at the UC Berkeley Graduate School of Journalism.
Google would pay $15 million into the fund and $5 million to an artificial intelligence accelerator, and add $10 million to “existing journalism programs.” For each of the next four years, Google would pay $10 million into the fund and $10 million into the existing programs.
Wicks called it “a first-in-the-nation partnership with the state, news publishers, major tech companies and philanthropy,” while the Chamber of Progress hailed it as “a win for Californians who care about local news.”
Newsom in a statement at the time 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 deal not only provides funding to support hundreds of new journalists but helps rebuild a robust and dynamic California press corps for years to come, reinforcing the vital role of journalism in our democracy.”
Wicks said this week that given the state’s worsening budget outlook, it could have been a lot worse.
“I am grateful to our governor for making an essential public investment that strengthens journalism — a pillar of civic life in a democratic society,” Wicks said in a statement. “This down payment, combined with those of private and philanthropic partners, will catalyze community-facing news and information gathering across California. We must support and sustain a free and vibrant press, empowering local news outlets up and down the state to continue in their vital work.”
The lawmaker was expected to say more about the journalism funding effort next week.
Anthony York, a former communications advisor to the governor’s office now working with a coalition on the news funding proposal, had a similar response, and noted the Legislature could restore the proposed cut in the final budget that must be approved by June 15.
“Given the state of affairs, we did take a haircut on the state side,” York said. “But I think it’s good news we survived the gauntlet.”
Danielle Coffey, president of the News Media Alliance, which has advocated for national legislation to support news publishers, said the state funding reduction was “disappointing” and reflects the vulnerability of a handshake deal replacing legislation. But Coffey said Wicks has been a tireless advocate for local journalism given the intense opposition she’s faced, and she remained hopeful the assemblywoman would find more money for newsrooms.
“She’s been a constant champion for this,” Coffey said. “There wouldn’t have been anything at all. Her fortitude is commendable.”
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