The California Google deal could leave out news startups and the smallest publishers

Last month, Google and California struck a groundbreaking, controversial deal to funnel almost $250 million into the state’s journalism over five years (while shoehorning in…an AI accelerator), sidestepping a more sweeping effort to force Google and Meta to pay news publishers. The closed-door deal has been covered, pragmatically praised, and excoriated here and elsewhere.

But will any of this funding be accessible to the smallest newsrooms, and to startups?

The unsatisfying answer is that, for now, the details are still being hashed out, so we don’t know for sure. But there’s language in the shelved bill, AB886, that would limit eligibility to news outlets with annual revenue of at least $100,000, and that have been publishing for at least two years. The agreement announced last month states that funds should be distributed to “eligible organizations…consistent with the current language of AB886.”

In other words: If that language ultimately dictates eligibility for the fund, it would exclude the tiniest publications, with annual revenue under $100,000, and the newest startups. (I’m not the first to raise this concern.) And we know that these are, in a lot of cases, the outlets that already say they have the hardest time getting funding.

The nonprofit, yet-to-be-created “News Transformation Fund” will be housed at UC Berkeley’s School of Journalism. It’ll be overseen, and its funds allocated, by a seven-member board of directors. Those reps will include: two from the California News Publishers Association, representing legacy publishers; one from journalism union Media Guild of the West (which loathes the settlement); one from the national journalism support group Local Independent Online News Publishers (LION); and one apiece from three associations representing and collaborating with community publishers nationally and in California — Ethnic Media Services; Latino Media Collaborative; and California Black Media.

“Nobody knows, right now, exactly how those [criteria] may or may not apply,” LION executive director Chris Krewson told me in an email.

Google said it’s looking forward to finalizing the details of the agreement with the state and other parties. A spokesperson declined to share specifics about the eligibility of news startups and small publishers for funding. The office of Buffy Wicks, the assemblymember who authored AB886 and announced the deal with Google, did not respond to my questions by press time.

LION has 76 member publications in California. Of those, about 20 “are either too new (younger than 2 years) or too small (revenue under $100,000) to qualify under the language in the bill,” Krewson told me. “But again, we don’t know whether or how this nonprofit and its fund will operate, and likely won’t for some months (nonprofit governance is many things, but fast is not one of them).” Wicks’ office stated that the nonprofit News Transformation Fund (and the AI accelerator) “will go live in 2025.”

Before bill AB886 was shelved, LION “was fighting to eliminate those barriers” from the bill, Krewson said. In light of Meta’s threat to pull news from its platforms in California (a threat it made good on following similar legislation in Canada), and the risk of Google choking off traffic too, LION wanted to ensure its members received some funding to make up for those losses.

Krewson praised the settlement when it was originally announced. He told me he was “happy” to support the agreement and believes it’s in line with LION’s mission to build up “very small, embryonic newsrooms.”

“Once it became clear that lawmakers had abandoned the slow, deliberate process of legislating and one of their offices — which had listened to LION’s concerns over the past two years — had moved into fast-track settlement mode, the choice rapidly narrowed for us,” he added. “When representatives from Google and Asm. Wicks’ office outlined the state of play, it was clear that the choice was between something (this nonprofit fund and an AI accelerator over 5 years), or nothing.”

LION is working on hiring, and raising money for, a full-time policy person, and I heard firsthand LION members calling on the organization to do just that at its annual summit in Chicago last week. For Krewson, the California process, and legislation that played out earlier this year in New York, drove home to him that LION members — specifically, nonprofit and for-profit newspreneurs, not legacy outlets — urgently “need to build political power.”

“At least a dozen states are poised to enact some kind of legislation around local news in 2025, and right now the organizations working hand-in-glove with those state legislatures are state press associations, offering legislative solutions that prioritize legacy organizations,” he said. “Those lobbying interests tend to serve the hand that feeds them, which has historically been exclusionary and protectionist, keeping digital-only publishers from participating in public notices, legal ads, state ad buys, and the rest.”