Australia’s News Media Bargaining Code and the World It Created
If publishers bargaining for payments from platforms was going to save local journalism in Australia, we’d probably know it by now. After all, back in 2021 Australia passed the News Media Bargaining Code, presented as a way for publishers to claw back advertising revenue. In their eyes, their articles, photos, columns, editorials, and letters to the editor—their “content”—was a big reason why the internet platforms (primarily Google and Facebook) had hoovered up nearly all the digital advertising dollars globally available. Banding together in a cartel, as made permissible by the Bargaining Code, would allow those publishers some leverage, and allow them to be compensated for the content.
There are, of course, problems with the idea that platforms derived much of their value to advertisers from news. (In fact, advertisers have for years been trying to move their brands to safer places, and remove their perfumes, cars, and clothes from alighting next to the latest mass shooting or the occasional armed insurrection.)
But—setting all that aside—legislators in Australia passed the Code. So what happened next? If all went to plan, bargaining began; platforms, publishers, and mediators hashed out fair deals in this experiment.
Instead, Google and Facebook each cut side deals with publishers—the details of which are not public, as there are nondisclosure agreements barring further review. Wrote Bill Grueskin, Columbia University journalism professor and a journalist in residence at the time at the Australia-based Judith Neilsen Institute:
If you want to learn whether those newsrooms are spending that money to bolster journalism, rather than pad executives’ salaries, you’re also out of luck. I’ve been talking to newsroom managers most of my adult life, and I’ve never seen a group so reticent to share details of anything related to their business.
So we have a precedent set in one nation of 25 million residents, the first time governments have interceded to mandate platforms pay news organizations. And no evidence that the dollars that flowed actually meant more journalism. Grueskin pegged the influx of cash at $200 million, not an inconsiderable sum.
That $200 million could not stop the tide. In October 2021, “Australia’s news sector has experienced the third largest number of contractions within a single quarter since Covid-19 emerged,” per the Australian News Data Report from the Public Interest Journalism Institute.
And what about the smallest publishers, those who might reach to qualify for this code? I asked Claire Stuchbery, executive director of Australia’s Local Independent News Association, what her membership is seeing. Stuchbery responded that most of that group’s members do not qualify or benefit at all—not least because of the lengthy and expensive process needed to navigate the Code:
What we have learned through the review process is that publishers had to find funding partners to engage legal support to enter the bargaining process. The process then took around 18 months, followed by a rigorous process of negotiating commitments (e.g. number of stories published each week, topics covered, target audience groups), with some publishers only receiving their first payments in the last month. While amounts have been set, delivery models and expectations must be re-negotiated annually over a five-year deal. These deals have only been forthcoming from Google to date, with no engagement from Meta.
Registration as a public interest news outlet has been patchy. For example, one publisher has three mastheads, two of which were considered eligible and one was not, despite operating on the same model as the other two in the same publishing house. And, being registered does not automatically mean the masthead will be accepted by Google or Facebook, who apply their own considerations to who is or is not eligible for a deal. In this way, the Mandatory Bargaining Code only gets publishers part-way to a deal with the big tech companies.
Beyond those few publications who have successfully negotiated a deal, there are many who have found the whole process too cumbersome to manage, have not had the capacity to engage with it and/or don’t meet the financial eligibility requirements. The Code requires newsrooms to have an annual turnover of $150k+ to be eligible, a barrier to new entrants and small publishers. LINA suggests a non-financial measure alongside this requirement would allow for smaller public interest news publishers to participate in the Code. Eg. $150k turnover and/or producing an average of 6+ local news stories per week (or similar). A barrier to entry is reasonable to ensure focus on quality news content, but a content measure would also be appropriate to demonstrate alignment with the codes’ purpose.
To date, no community radio news service has received funding through the Code and only 3 LINA members have been able to engage with the process, noting this occurred through the Public Interest News Alliance prior to the establishment of LINA.
The overall impression of the Code’s implementation has been that it has significantly favoured large, mainstream media outlets, some of whom have closed down since receiving the money, (and) will have limited impact or benefit to small, independent newsrooms.
In fact, in a report released by the Australian government in early December, it declares the code a success—not because anyone knows how well it worked, but because twenty secret deals were cut between publishers and platforms. In any event, the precedent was enough to pique the interest of struggling legacy media owners the world over, and in the United States, lobbyists for the newspaper industry got to work building upon what Australia had started.
The Journalism Competition and Preservation Act
I became aware of the U.S. version of the Aussie bargaining code when Minnesota Senator Amy Klobuchar introduced the “Journalism Competition and Preservation Act.” The bill purports to help local media compete by allowing them to collectively bargain with tech platforms. After reading the legislation, I wrote a letter to LION Publishers’ membership—which today stands at 450, most of which are in the United States, and two dozen in Canada. The letter covered both the JCPA and Canada’s version, a bill called CA-18; I wrote:
[While the legislative proposals’] stated purpose is to help local news . . . on the whole, they will not. Yes, they will help some family-owned newspaper companies slow their decline, and perhaps some of our larger members will gain some much-needed revenue – and I am glad for those businesses.
Still, the bills are part of an international legislative push to extract revenue from the platforms that have succeeded in capturing the bulk of digital advertising dollars. (You may have seen this effort in Australia, which proved to be a testing ground of sorts.)
In my view, though, these measures are written to redistribute those advertising dollars to qualifying publishers and broadcasters—and as you might imagine based on the lobbying dollars involved, there are several disqualifying measures for any organization that’s not a large legacy print or broadcast business.
I come to these conclusions honestly. I’ve spent the last eight years of my career building the next generation of news organizations; first as the person who hired and led a start-up newsroom in Philadelphia, helped launch another in Pittsburgh, then ran strategy for their parent company until the money ran dry. Then, as executive director at LION Publishers, a national nonprofit serving local entrepreneurs like the startup local news company I used to work for.
Those efforts have been greatly aided by funding from the Google News Initiative and the Meta Journalism Project, which have underwritten training programs, fellowships, and research into this emerging ecosystem. So far, the results are encouraging, though too many news entrepreneurs building digital businesses tell us their efforts are not sustainable.
These efforts—like the Santa Cruz Local, a LION member site started by Kara Meyberg Guzman—show great promise because they start small, continually responding to their community’s information needs. Sometimes an effort that starts small can become dominant; this year, founding publisher Anne Galloway is stepping down from VTDigger. She was laid off from the Times Argus newspaper in 2009; in 2022, the site she founded is now the largest newsroom in Vermont.
Don’t take my word for it, though. In a letter penned to his local congressman, newspaper executive and industry analyst-turned-local-publisher Ken Doctor, of Lookout Local, came to similar conclusions, writing: “I believe JCPA, despite its intentions, will generate more negative impact on the local press standing and revival than positive. . . .” He added:
The newspaper chain recipients of such funding are in survival, lifeboat mode. Four companies that now control 50% of American daily newspaper circulation are all embarked on the same “squeeze on the last profits, and then turn the lights off” business strategy. Some don’t mind being referred to as vultures; others display prettier public plumage, but important employ the same wind-it-down tactics. The major loss reported by Gannett, which itself controls 25% of circulation… certified how quickly the final days of the print chains are coming.
New revenue streams that might be gained by these companies—and have no doubt they would more greatly benefit from negotiated or mediated platform payments than the hundreds of smaller outlets, like Lookout—won’t make a signal difference in the only metric that matters: how many journalists are working to cover local communities. The amounts estimated will not turn around companies that are losing tens of millions of dollars; they will only forestall the presence of these companies in their markets. In fact, their ability to take money that will increase their profits – but not their journalism – will be hard to police post passage.
Money gained would support “ghost newspapers.” We all hear about news deserts, and they are pernicious, but are found in relatively small population areas. Ghost newspapers do more, every day, to threaten local democracy. These are papers that maintain the decades-only trusted nameplates, but have one or two “local” stories, usually written by a $20 an hour trainee reporter with no experience in the community. They are ghosts, and legislation that enables them to take space in the market – and stands in the way of new spirited operations getting established – is misguided.
Unlike the Local Journalism Sustainability Act (LJSA), about which I see positives and negatives, JCPA will disproportionately favor big publishers. As a small publisher now building a network, all I ask for is an even playing field. By enabling “side deals”, big companies – those light on journalistic missions and heavy on short-term profit maximization – are sure to drive disproportionately better deals. That’s unfair and a detriment to democracy.”
As with Stuchbery’s analysis of Australia’s Code and its impact on this burgeoning ecosystem, based on their income nearly half of LION members won’t see a dime from the JCPA. That measure does not apply to news organizations that have been in business for less than a year, and it excludes news businesses that earn less than $100,000 per year. As of 2021, 44 percent of LION members earned less than that.
What It Means for the Future
Late in 2022, Senator Klobuchar attempted to attach the JCPA to a big year-end spending bill. After the bill was proposed, Gannett—mentioned in Doctor’s note, the largest U.S. newspaper publisher by circulation—announced a major executive departure by the end of the year, ahead of the announcement of still more layoffs and cuts. The head of the News Media Alliance—a huge advocate for the JCPA—also announced his departure from the top of that organization.
What that means for the ecosystem we are building has yet to be determined. Meanwhile there are government efforts that are promising—one is a payroll tax credit for journalists, the surviving provision of a package of measures called the Local Journalism Sustainability Act.
Under this measure, qualifying newsrooms would get a refundable tax credit for five years, a cash benefit, of up to $25,000 in the first year and $15,000 in years two through five for each full-time local journalist. The benefit amounts to 50 percent of a local journalist’s compensation up to a $50,000 salary in the first year, and 30 percent of the salary in the last four years.
Many LION members don’t use payroll providers, but it’s our goal as a staff to help these members further professionalize, and a tax credit to subsidize work they’re already doing would be a huge incentive for them to do so. LION is proud to support this measure.
Another promising effort is in California, a $25 million journalism fellowship program has been announced at the University of California at Berkeley. Funds for the fellowship program will come from California Assembly Bill 179, which was approved by legislators in the senate and assembly and signed into law in the fall of 2022.
The program aims to strengthen local reporting across the state and to combat the gaps in credible local news coverage that have been filled by disinformation, state senator Steve Glazer told U.C. Berkeley.
“Public television and public radio have shown that Americans trust independent, government-funded media,” Glazer said. “This program builds on that tradition by providing public resources to local media through the creation of a university-run fellowship program whose journalists will be completely independent and operate without any connection to the government or influence from politicians.”
Finally, in 2018, New Jersey created the Civic Information Consortium, a first-of-its-kind nonprofit to strengthen local-news coverage and boost civic engagement statewide. Since 2021, the consortium has invested $1.35 million of public funds into initiatives that benefit the state’s civic life and meet the evolving information needs of New Jersey’s communities—and in its last grant announcement, funded projects including coverage of climate change, increasing the amount of reporters at municipal meetings, and adding an internship program, among many other efforts.
These kind of government interventions have had positive impacts at the local level, and don’t threaten the independence of the organizations that take advantage of them. Hopefully they provide a model to build upon, with the needs of communities and underserved populations—long overlooked by journalism organizations—identified and prioritized.