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June 9, 2022updated 17 Nov 2023 2:45pm

Australia-style regulation could land UK news giants £10m+ annually from Google and Facebook

By William Turvill

Britain’s largest newspaper publishers could be in line for big tech payments worth £170m a year if the UK passes Australia-style legislation forcing Google and Facebook to pay for news.

Annual publisher payment costs for Google and Facebook/Meta would likely rise to above £250m a year in the UK, according to Press Gazette research, if the upcoming UK law obliges them to negotiate cash-for-content deals with the BBC, other broadcasters and non-newspaper publishers.

Using Australian payment disclosures as a guide, Press Gazette has estimated that ten of the UK’s largest newspaper publishers could expect to sign contracts worth up to £172m a year overall with Google and Facebook.

In Australia, the tech giants have agreed deals with news companies – including broadcasters and digital-only publishers – thought to be worth more than AU$200m (£115m) a year. People with knowledge of individual deals have estimated that payments cover roughly 20-30% of journalism costs.

Press Gazette used UK publishers’ annual reports and the Australian percentage range to calculate our estimates. (More details can be found beneath the table.)

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Reach, the UK’s largest newspaper publisher, could expect to generate big tech content licensing revenues of between £31 and £46m a year alone, according to our calculations.

DMG Media, publisher of the Mail titles as well as the i and Metro, could expect between £17m and £26m, Guardian Media Group £15m to £22m, Telegraph Media Group £12m to £18m, and the Financial Times £11m to £16m.

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Times Newspapers and Sun publisher News Group Newspapers – which are both owned by Rupert Murdoch’s News UK – could expect £10m to £15m and £9m to £13m respectively. News UK titles are already receiving payments from Google as part of an international deal with News Corporation.

The table below shows our estimates in full, including calculations for regional publishers Newsquest (which is owned by US giant Gannett), National World and Iliffe.

National World is the only publisher on this list that has disclosed how much it receives – £1.2m a year – from Google and Facebook under current licensing deals. Our research suggests that, under an Australian framework, it would receive £5m to £8m a year.

Large payments could also be expected by the publishers of the Evening Standard, Midland News Association, DC Thomson, Tindle and Archant, which may soon be part of Newsquest. However, these publishers have not been included in our research because their editorial costs are harder to estimate.

Our workings

The figures above have been taken from the latest-available annual reports of the ten publishers or from public statements.

To estimate editorial costs, we added up wages, pensions and social security payments from annual reports and multiplied this by the proportion of the workforce that work in journalism.

The annual tech bill estimate is 20-30% of this figure.

For example, in the case of Reach, its latest annual report states that it had 4,671 permanent employees at the end of 2021, including 3,119 (or 66.8%) n its editorial division.

In 2021, Reach’s expenditure on wages and salaries, social security and pensions totalled £230.4m. To estimate the total editorial wage, social security and pension cost, we calculated 66.8% of £230.4m, which is £153.9m.

The big tech cost estimate is then 20-30% of £153.9m: £30.8-46.2m.

The caveats

This research is based on several assumptions, and the individual figures attached to different publishers will often not be directly comparable.

The chief assumption is that the UK will follow through with its pledge to create a regulatory regime comparable to Australia’s News Media Bargaining Code.

We also then assume that Google and Facebook, as well as publishers, will react in the same way in the UK as in Australia. (There is a large question mark over the role of news on Facebook in the future.)

It is worth bearing in mind that the values of individual deals in Australia are guarded by non-disclosure agreements. Therefore, this research is dependent on estimates made by Rod Sims, the former chair of the Australian Competition and Consumer Commission who helped construct the News Media Bargaining Code, and others.

Sims recently stated that he believed Google and Facebook have agreed annual deals with news companies worth “well over” AU$200m. He said that $AU$200m would equal around 20% of journalist salaries across these companies. News publishers in Canada, which like the UK has pledged to introduce Bargaining Code-style legislation, estimate that Google and Facebook’s deals in Australia cover around 30% of newsroom costs.

At a publisher-specific level, the definition of a journalist will vary company by company. For example, in the case of Reach, we have counted “editorial” staff from its accounts. The Financial Times’ accounts state that it has 872 “production” staff. Rather than adopting this figure, we used 600 because the FT previously told Press Gazette it has roughly 600 journalists. The Telegraph’s figure, from its accounts, is for “editorial and production”.

Our calculation technique assumes (probably incorrectly in most cases) that editorial staff are paid on average the same as employees in other divisions. In many cases, it will also discount freelance editorial costs.

The final major caveat is that the £115-172m estimate could be well short of the final bill faced by Google and Facebook.

If, as in Australia and as is expected in Canada, broadcasters are included in the UK’s legislation, the annual bill could top £250m. The BBC is by far the UK’s largest employer of journalists (it had more than 6,000 people working in journalism in 2020). There may also be a question over newswires like Press Association.

Digital-only publishers like The Independent would also benefit, and the UK arms of American publishers - Bloomberg, Reuters, Insider, Politico, The New York Times and The Washington Post – could also be included.

A Google spokesperson described Press Gazette’s estimates as “highly speculative and not based on the facts. Google already brings substantial value to publishers in the UK: we pay hundreds of millions of pounds to publishers through our ad network and Google News Showcase licensing agreements covering more than 230 UK titles, mainly local and regional publishers where support is needed most.

“We also refer people to publishers’ sites – free of charge – helping them grow their readership and make money. We will continue to work with the government on public policies that support a diverse, sustainable, and innovative news ecosystem and protect people’s access to a diversity of voices online.”

Picture: Reuters/Peter Nicholls

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