The Toronto Star, a very public backer of the Online News Act, is saying they cannot support the deal struck between Google and the government.
When I published the article on the government folding, I got a number of comments saying that I was completely out in left field. For supporters of the Canadian government, the $100 million deal was a massive win for the Trudeau government and Meta would come crawling back any day now to ink their own deal. While the latter remains to be seen, the evidence to the former was, at best, wafer thin. All anyone could tell me was that it is $100 million and that it was better than nothing. Considering the stack of evidence I had pointing to how the $100 million wasn’t all that it seemed to be, this was a pretty pathetic rebut – even though it was the best anyone could give me.
The reality is that the $100 million isn’t all new money. The previous deals agreed to by publishers and Google would end up getting rolled into this pool of cash. What’s worse, Meta’s pull out of news links represents a loss of more than double the $100 million – tallying in at a whopping $230 million in losses. The math is pretty clear, the media sector lost huge on this in the grand scheme of things. Even setting aside the Meta losses, the media reportedly needs $1 billion just to keep their stability. The optimistic $100 million doesn’t even come close to that figure. All this as the link tax ultimately dies in this country – replaced by the originally asked for fund model which was long supported by critics as an imperfect solution and Google.
Barely a day later and we found out that the $100 million price tag has already been reduced to $77 million. This as the CBC gobbles up roughly a third of all the money due to the number of full time employees they have. If other organizations were hoping to get at least $25 million, well, if you thought it might be a bit difficult before, that number got substantially harder to achieve.
Even if you don’t believe any of this and still firmly believe that the government won in all of this (and belief is all you have at this point as far as I can tell), then the reaction from the major stakeholders pretty much told the story for us. Google, for their part, was all smiles and thanking the government for their commitment to the talks. Lobbying organization, FRIENDS, released a statement airing their displeasure towards the deal, opting instead to look to the Online Streaming Act as they try and chase their loot through a different means. News Media Canada was more cryptic, saying that they are waiting on the final details, but likely wanting to score at least $25 million out of it all. A lot of coverage from major outlets were also less than celebratory on top of it all.
One of the things I remarked was that, behind the scenes for organizations pushing for this law, there has to be a feeling of betrayal brewing. They spent years heavily lobbying the government to get this link tax law in place. Seeing it crumble to pieces as the government caved to Google would be about the last thing they had hoped to see – yet they are well and truly witnessing it now as the asked for fund model for Google emerges from the link tax ashes. This is, of course, the same fund model that supporters of the legislation swore up and down would be completely unworkable and a stupid idea that shouldn’t even be considered. The outcome was set to be about as unpopular among the lobbyists as Maxine Bernier at an NDP convention.
Right on cue, the Toronto Star has published an article condemning the deal – no doubt feeling the sting of betrayal by the government. The newspaper that wrote endlessly about how great and wonderful the Online News Act is and how only stupid Conservatives were against it were suddenly expressing rather negative opinions towards the government they have long backed. From the Toronto Star:
Torstar is calling the deal struck between the federal Liberals and Google over compensation for online news a “disappointment,” and one the media company can’t support.
But the agreed-upon amount is far below the $172 million set out in the government’s draft regulations and is, rather, more in line with what Google had said it would accept.
“For three years, we have been engaged in a public process to ensure that C-18 would level the financial playing field between American tech giants and Canadian publishers,” said Torstar owner and publisher Jordan Bitove. “Yesterday’s announcement from the federal government about their proposed Google deal is disappointing.”
Bitove said he appreciated St-Onge’s efforts, but “Torstar cannot support the $100 million cap in its current condition,” adding it “was not responsible” to announce a deal while final regulations are still not publicly available.
With most Canadians reading their news online, digital platforms — sharing content created by Canadian media outlets — have earned billions in online advertising. The contentious legislation, passed last June, was introduced to ensure the likes of Google and Meta compensate Canadian publishers who have seen their advertising revenues decline. (Torstar, which publishes the Toronto Star, favoured and lobbied for the legislation.)
Critics have questioned whether the publicly funded media organization should benefit from compensation. On Wednesday, St-Onge told reporters that the government has taken those concerns “into consideration in the final regulations that will be published a few days before the law comes into effect.”
You could practically see the steam rolling off of the letters with how much rage was behind that. Liberal party supporters were seen in the comments (the same kind of people I was dealing with earlier) express confusion as to why the Toronto Star is so mad at the deal. Us real critics of the legislation know full well why that is, but my detailed explanations fell on deaf ears and I was told I was full of shit for it.
Yet, here I am, reading the room and seeing everything point to what I said being accurate after all. If this was really a great deal for publishers, the champagne would’ve been popped the moment word came down over the wires a deal had been reached. Instead, we got either deafening silence or organizations screeching like banshees as they realize how badly betrayed they wound up being in this whole ordeal.
Make no mistake, the large media companies lost huge here. What’s more, what money is flowing is partly just getting wired directly to the CBC while everyone else fights for the scraps. The signs always pointed to this being the obvious outcome given “BUT AUSTRALIA!!!” has a system that favoured the Rupert Murdoch empire. Despite those concerns being raised all along among everything else being flatly dismissed as ridiculous, history ultimately repeated itself here – albeit to a much smaller degree.
An open question now is how badly damaged did the media’s internal relationships with the government get because of all of this. One thing is for sure, it is likely that more major outlets are going to come out against this given that this is increasingly becoming a trend. On the plus side, news links won’t get blocked on Google after all, so that’s something for smaller players like us, right?