California is beginning to address the crisis facing local journalism by distributing nearly $20 million this year to local news organizations. But the Governor’s Office of Business and Economic Development is about to fumble the opportunity by having the government pick winners and losers — with journalists being the losers.

Local news has suffered from declining revenue for years, all while tech giants such as Google have used the outlets’ content without compensation to generate enormous revenue. California’s efforts to reverse this trend began with legislation that would have compensated publishers for their losses based on how many reporters they employ. It sailed through the California Assembly and the Senate Judiciary Committee in 2024 before being halted when the governor’s office made a deal directly with Google.

Under this deal, the state would contribute $20 million and Google would provide $15 million in the first year of a new five-year program that would distribute money to news organizations directly on a per-journalist basis. It’s far from enough to make up for what Google has taken from California publishers, but it’s a start.

Unfortunately, that number has already dropped to $10 million from each source, and newly proposed plans for distributing funds further undermine the core goal of the program — compensating local news publishers for their losses on a per-journalist basis. A set of new formulas for distributing funds is counterproductive and likely illegal. This backpedaling is why the News/Media Alliance had always preferred a legislative solution — fair, transparent and under the rule of law. But now, with this program already established and its implementation in flux, the Office of Business and Economic Development must change course.

In a move that directly contradicts the requirement to provide funding based on the number of journalists a publication employs, the office is now proposing to cap the compensation any publication can receive at 20 journalists. Treating a newsroom with 20 journalists the same as a newsroom with 200 journalists makes no sense. Large publishers are no less vulnerable to the economic headwinds hurting the industry than smaller ones. If anything, their employees are more costly, as they often receive higher pay and better benefits than those of smaller publications.

This proposal would fail to support nearly a thousand California journalists, if not more, who work for larger employers. This will inevitably lead to job losses and a reduced ability to provide Californians with quality journalism. Publishers with more reporters are often the ones most able to conduct important in-depth investigative journalism, but that kind of journalism is expensive.

The Office of Business and Economic Development’s proposal continues to miss the mark by also dividing the state into 13 arbitrary regions, without taking into account where news publishers are actually located and their coverage areas. Publishers would be placed in the region where their headquarters are located, but many publishers — including the Los Angeles Times, one of the state’s largest media organizations — cover California communities in multiple proposed regions. The allocation should be focused on publishers and journalists, not arbitrary geographic borders.

To make matters worse, as part of the distribution system, the “Pro Rata Journalist Fund” would lock publishers into a time-consuming grant application process. Rather than simply distributing the funds based on the number of reporters, the proposal allows the state government to pick winners and losers by choosing which applications will be “prioritized.” Who should be prioritized is based entirely on open-ended questions which will allow the government to subjectively pick grantees. The personal or institutional preferences of the grant-makers will inevitably influence how the program’s money is distributed, giving the state government clear financial leverage to reward, or punish, news coverage. This proposal violates the independence and freedom of the press that is enshrined in the California and U.S. constitutions.

This proposal strays too far from the original intent of the fund. The state should scrap the convoluted and arbitrary rules in favor of an allocation based on the number of journalists at each publication. That was the directive and agreement among the Legislature, the governor, the publishers and the journalists who worked so hard to establish the Civic Media Program, and it’s what would work best for California.

____

Danielle Coffey is the president and chief executive of the nonprofit News/Media Alliance, of which the Los Angeles Times is a member.

©2026 Los Angeles Times. Visit at latimes.com. Distributed by Tribune Content Agency, LLC.