California’s beleaguered news industry — which has seen its advertising decline steadily over the past 20 years due to competition from online giants like Google and Meta, resulting in layoffs, smaller newsrooms and less oversight of government — may be thrown two modest lifelines in the coming weeks.
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A bill on Gov. Gavin Newsom’s desk would provide tax credits for media companies that retain and hire journalists, valued at about $55 million a year over the next five years.
At the same time, the California Civic Media Program, backed with $20 million a year for three years, split equally between the state and Google, is expected to announce grants of up to $250,000 per newsroom next month for the same purpose.
Longtime industry observers say the potential funds from both, while significant, are still far short of the need. California has lost 41% of its local newspapers since 2005, according to a study from Northwestern University. Nationwide, the number of newspapers has fallen 39% over the same time.
Fewer journalists means fewer people covering city council meetings, writing about how taxpayer money is spent, which candidates are running for office and other issues that are the fabric of local communities like parades, new businesses and high school sports.
“With AI and the way misinformation flows on social media, people are beginning to realize we have a deep problem,” said Julie Patel Liss, a journalism professor at Cal State Los Angeles. “News is in trouble. There’s a crisis going on. There’s a recognition that accurate, fact-checked information is a public good like schools and libraries.”
Some smaller media outlets say the programs could provide a lifeline.
“For people like us — we’re a mom-and-pop operation — it could make a world of difference,” said Greg Little, publisher of the Mariposa Gazette, a weekly paper in the Sierra foothills with two reporters and one editor that has been around since 1854. “If we could just give raises and upgrade our computer equipment, that would be huge. We are a small business just like the hardware store down the street.”
Some news organizations are growing their numbers of online subscribers as fewer people buy print newspapers and magazines. And new non-profit digital companies are succeeding in some communities. But overall, the industry has lost billions as Craigslist, eBay, Facebook Marketplace and other sites have taken over the classified or “help wanted” business and tech giants like Google and Meta have come to dominate display advertising. Those two companies now control half the world’s digital advertising revenue, according to data firm Emarketer.
Last week, McClatchy, which owns the Sacramento Bee, Fresno Bee, Miami Herald and other papers, laid off dozens of reporters and editors in the latest cost-cutting move.
Hoping to stem the tide, two weeks ago state lawmakers passed AB 2222, by Assemblymembers Buffy Wicks, D-Oakland and Chris Ward, D-San Diego. The bill would provide tax credits of $20,000 per full-time journalist at a newsroom for the first five positions and $15,000 for each additional journalist. Part-time journalist jobs would receive $7,500 credits. A $15,000 “new hire” credit would be awarded to news organizations that expand their newsroom’s headcount of journalists.
“California outlets have lost far too many journalists, and every newsroom that shrinks means fewer people asking hard questions, holding powerful people accountable, and telling the stories that would otherwise go untold,” Wicks said. “AB 2222 is about interrupting that cycle and putting permanent resources into keeping local news strong and journalists on the job.”
The bill is opposed by the California Taxpayers Association and the California Chamber of Commerce. They object to its funding source — eliminating the ability of corporations in California to deduct executive compensation above $1 million. Much of that cost would fall on large tech companies.
“Cal Chamber has no concerns with the development of the journalism tax credit provisions,” said John Myers, a spokesman for the Chamber of Commerce. “But there are significant concerns with increasing businesses’ tax liabilities to fund the new tax credit.”
Newsom has not said whether he will sign or veto the measure.
Meanwhile, the $20 million annual California Civic Media Fund is a program Newsom announced in July. Google will pay half and California will pay the other half.
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The fund grew out of a $250 million plan announced two years ago by Google and Newsom after an effort by Wicks and other legislators to drop antitrust rules to allow publishers to jointly negotiate with the tech giants for linking to their news stories and selling advertising around them failed amid intense lobbying by Google, Meta and others. Newsom backed out of that compromise in January, saying the state couldn’t afford it. After an outcry from state lawmakers and publishers, the new Civic Media Fund was announced.
The money is being overseen by the Governor’s Office of Business and Economic Development.
Willie Rudman, a spokesman for the agency, known as GO-Biz, said awards are expected to be announced in October.
GO-Biz hired the non-profit James B. McClatchy Foundation, founded by the former publisher of the McClatchy Company, which owns the Sacramento Bee and other newspapers, to review and rank the applications to decide which companies and non-profit news outlets will get the grants.
Questions about the details remain, however.
Blake Kaiser-Lack, the agency’s deputy director in charge of the program, declined to be interviewed this week. Similarly, Priscilla Enriquez, president of the McClatchy Foundation, also declined to answer questions.
“Once things wrap up, we’ll have more information to share,” she said.
Rusty Coats, executive director of Journalism Funding Partners, a non-profit group based in Sacramento that helps build partnerships between funders and local news organizations, said roughly 350 outlets have applied for the money. The deadline was Aug. 21.
“It really is the quilt of what California journalism is,” he said. “It’s large companies like McClatchy, Gannett, Media News Group, and CalMatters on one end and the single owner-operators who produce local journalism with freelancers at the other. It’s the entire range.”
The Bay Area News Group, which publishes The Mercury News and East Bay Times, has applied for funding, as have other California publications owned by its parent company, MediaNews Group.
The McClatchy Foundation set up a scoring system and put together a review board to help evaluate the applications, along with Journalism Funding Partners. Coats said the foundation, his organization and the independent review board working with the foundation is scheduled to make recommendations in October to the advisory board and the final decision will rest with GO-Biz director Dee Dee Myers, the former press secretary of President Bill Clinton.
The program has had three public meetings. The last one was in May. At those meetings, some members of the public, like Hugo Morales, executive director of Radio Bilingue, a network of Spanish-speaking radio stations, criticized the agency’s decision not to make radio or TV stations eligible for the money.
Chuck Champion, president of the California News Publishers Association, said much more is needed.
“Maybe it’s a start in the right direction,” he said. “But we have a billion-dollar problem. We don’t have a million-dollar problem.”
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