California’s squandered opportunity

California is about to hand out $20 million — half from Google, half from the state — to news organizations, and it is wasting a golden opportunity.

Instead of building a new and more competitive landscape of news, instead of creating services to benefit the entire news ecosystem, instead of investing in innovation, instead of embracing new news partners such as libraries and community organizations, instead of imagining a new future for journalism, the California Civic Media Program is going to end up sending too many checks to the hedge funds that have ruined news in the state.

I am sorely disappointed and rather angry. For imagine what $20 million in one year could do to set an example of innovation for the nation.

There’s much history here. Lobbyists for the old, hedge-fund-controlled newspaper industry — the rebranded American Newspaper Publishers Association of 1887 — have been flogging protectionist legislation from Washington to Springfield, Illinois, to Sacramento, arguing that lawmakers should tax tech companies, which they say took ad revenue away from the media moguls (as if God had granted it to them).

In Sacramento, this took the form of the California Journalism Preservation Act (CJPA). It was terrible legislation. I was commissioned by the California Chamber of Commerce to write a white paper on it and I went to Sacramento to testify against it. I argued that policymakers should look instead to the New Jersey model of private-public support for journalism based not on payrolls in dying, legacy newsrooms but through open grants to anyone applying with innovative plans to serve communities’ needs.

Meta said if CJPA passed, it would pull news off Facebook and Instagram, as it did in Canada when it passed similar legislation. Apple apparently called in favors and was excluded from the bill. This pretty much left Google holding the bag. Negotiations ensued that resulted in plans for a promising public-private partnership, without legislation.

At first, much of the funds were to be administered by the state librarian, a former journalist, who understood the scope of opportunity. I offered suggestions on how the money could support real community-based innovation. I introduced the state to true innovators who are working with libraries as hubs of community information, with community members trained to cover their own governments, with public media building support for the larger ecosystem. Many folks were excited about what could be done.

Then the state pulled the program away from the library in favor of the Governor’s Office of Business and Economic Development (GO-Biz). Working with deputized agents and an advisory board, the resulting program will give money to the owners of news organizations based on present headcount of journalists: $20K for each of up to five full-time journalists, $10K each for up to 15 more, up to $250K per news organization.

There are conditions. The news organization must be at least three years old. That is blatantly anticompetitive, excluding the startups that are the fresh blood journalism so badly needs. Broadcasters are also excluded.

But there are efforts to serve under-served communities. Applicants will be prioritized based on answers to “three short narrative questions on their coverage of disinvested audiences, ongoing viability, and planned use of funds.” And 13 percent of the funds are to be set aside to support smaller newsrooms in communities with greater information needs.

Still, most of the money will likely end up in the pockets of out-of-state hedge funds, just as their lobbyists intended.

When I’ve spoken with legislators in multiple states, I’ve tried to remind them that they need no longer fear publishers who now buy ink by the thimbleful, not the barrel. Mass media are the the walking dead. They cry poverty. But they still invest in lobbyists.

Some advocates for the future of news are essentially saying this program is better than nothing. I disagree. It is a wasted opportunity and a dangerous precedent.

This is the first year of the program. If this is all it does, it should die. If it continues, I’d hope that wiser heads would prevail to create a program that supports growth in the ecosystem (with startups), services that help the entire ecosystem (e.g., ad networks, training, shared technology), inclusion of new participants (e.g., schools, libraries), and innovation (don’t preserve the news that was, invent the news that can be). Note well that alongside various philanthropies, Google does just this with its News Initiative. 

For the record, Google is not at fault for how this has turned out. The company made clear from the start that it would not influence the use of funds. Responsibility falls to the state government and its agents. I hope they go back to the drawing board. (In disclosure: I have raised funds for the universities I work with from tech companies, including Google and Meta.)

For the sake of historical context, I look to the 1947 Hutchins Commission report on a crisis in American news, which even then saw a crying need for greater competition and diversity in news. “Monopolistic practices, together with the cost of machinery and the momentum of big, going concerns, have made it hard for new ventures to enter the field of mass communications…. Can the press in the present crisis rise to its responsibility as an essential instrument for carrying on the political and social life of a nation and a world of nations seeking understanding? If not, will its irresponsibility deprive it of its freedom?” There is less machinery needed today, thanks to the internet, but the monopolistic, protectionist, and exclusionary reflex of old publishers has not changed a bit.

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