Business
California’s news industry is shrinking while misinformation spreads. Here's what the numbers tell us
As the world turned digital, people were quick to drop their Sunday papers and pick up their smartphones for news. Advertisers followed suit as digital platforms became more valuable real estate than print newspapers, leaving California news outlets desperate to find ways to stay profitable and relevant.
Supporters — including the California News Publishers Assn. and the Media Guild of the West which represents journalists at the Los Angeles Times — believe Assembly Bill 886, will give the industry a greatly needed boost by requiring online platforms like Google to pay news outlets when linking to their content. News outlets must spend at least 70% of the received funds on their staff.
A second bill being considered by California lawmakers, Senate Bill 1327, would charge Amazon, Meta and Google a “data extraction mitigation fee” for data they collect from users. The funds would go toward supporting local newsrooms.
California has lost one-third of its newspapers since 2005, according to a 2023 Northwestern Medill School of Journalism report. The number of journalists in the state has dropped 68% since then, and despite shifting efforts to digital, news outlets are struggling to attract readers and subscribers.
The Los Angeles Times cut more than 20% of its newsroom in January, representing one of the largest staff cuts in the newspaper’s 142-year history. Since L.A. Times owner Patrick Soon-Shiong sold the San Diego Union-Tribune to a hedge fund in July 2023, its staff has been cut by an estimated 30%. LAist is also facing “a significant budget shortfall” over the next two years and has offered voluntary buyouts to journalists ahead of a potential round of layoffs.
Americans are turning to social media for news, citing its convenience and speed. The share of Americans using social media for news increased from 27% in 2013 to 48% in 2024, according to the Reuters Institute for the Study of Journalism’s Digital News Report 2024.
But concerns about unreliable sources and misinformation have been growing. Four in 10 Americans who get news from social media say they dislike the inaccuracy, up from three in 10 in 2018, according to a 2023 Pew Research Center survey. After the 2016 presidential election, about a quarter of Americans said they shared fabricated news stories, knowingly or unknowingly.
As conspiracies and misinformation spread and exacerbate polarization, local newsrooms meant to hold officials accountable and keep community members well-informed are becoming fewer and farther between.
As the two bills make their way through the state Legislature, here’s what you need to know about California’s shrinking news industry and evolving media advertising scene.
Sunday circulation for some of the largest newspapers in California, including the Los Angeles Times, Orange County Register and San Diego Union-Tribune, has dropped at least 30% since 2015. The Fresno Bee has seen the largest percentage decrease in Sunday newspaper circulation, down 79% in just eight years. Its daily average of 110,400 papers in 2015 plummeted to 23,000 in 2023.
“There’s no mistaking that this is a brutal moment for journalistic employment,” Gabriel Kahn, USC professor of professional practice of journalism, said. “Jobs are shrinking, and local coverage is disappearing.”
The San Francisco Bay area saw the largest drop in journalism employment per 1,000 jobs in the state since 2009, according to U.S. Bureau of Labor Statistics data. In 2009, one out of 1,000 employed people worked as a journalist. In 2023, only a half of those jobs remain.
While the Bay Area saw a sharp decline in the number of journalists in the early 2010s, journalism employment has been inching back upward since 2015.
Kahn said the number of journalists in the Bay Area is dependent on the national relevance of Silicon Valley, which in recent years has consistently found headlines with topics like social media and artificial intelligence and tech figures like Elon Musk.
“Coverage about glitzy topics whether its celebrities in L.A., tech or politics … can gain national audiences, so there will always be demand for people to produce that kind of journalistic content,” he said. “Silicon Valley has always had ways to grow, and as they grow, journalists are added on to cover that surge.”
Journalism jobs continue to be concentrated in metropolitan hubs such as Los Angeles, San Francisco, San Diego, Sacramento and San Jose. The number of journalists in Los Angeles and Orange County increased 34% in the past decade while the number in San Jose and San Diego remained roughly unchanged.
The number of journalists in the state’s capital, however, notably plummeted 57% in the last decade. The Sacramento area saw the largest drop in total journalism employment since 2013.
McClatchy, the publisher of the Sacramento Bee and dozens of other news outlets across the country, filed for bankruptcy in 2020 and was acquired by a New Jersey hedge fund later that year. TV stations have also consolidated news coverage in Sacramento by doing the same with less, Kahn said.
“The truth is, this is still the place where a $300-billion budget gets approved [and] lots of business [gets] transacted,” he said. “I’m surprised there’s not more [coverage].”
As social media and search engines dominate the advertising business that once fueled the journalism industry, many California news outlets that have stuck to old business models are watching money go down the drain, Kahn said.
National digital advertising expenditures in California increased 54% since 2018 while print media advertising decreased 27%, according to Borrell Associates.
The most popular social media for California registered voters for election-related news is YouTube, followed by Facebook, Instagram, X and TikTok. And as more Americans experience news fatigue and turn to social media for news and comedic relief, news outlets continue to lose digital readership.
Ten major California news websites, including latimes.com, sfchronicle.com and ocregister.com, have seen at least a 35% drop in total unique visitors since January 2021.
The OC Register’s website saw one of the largest percentage decreases in the past three years at 72%.
Kahn attributed some of the digital readership loss to difficulties optimizing journalism content for search engines.
“One of the major woes that journalism is feeling is that their audience is dependent on Silicon Valley giants and their algorithms,” Kahn said.
A poll from the UC Berkeley Institute of Governmental Studies conducted from May 29 to June 4 found that California registered voters rely on Google and other search engines almost as much as newspapers and magazines to get news about election-related issues.
Digital advertising has become a major business for Google’s parent company, Alphabet, with revenue nearly quadrupling in the past decade. Google advertising, which includes Google search, YouTube ads and other networks, racked in an unprecedented $237.8 billion in 2023.
The U.S. Justice Department and eight states, including California, brought a landmark antitrust case against Google in 2023, accusing it of abusing its power to monopolize the digital advertising market.
“Any money falling into these [journalism] institutions is going to be positive, because they have basically been watching the water drain out of the bathtub for the past decade and a half,” Kahn said.
Business
In Los Angeles, Hotels Become a Refuge for Fire Evacuees
The lobby of Shutters on the Beach, the luxury oceanfront hotel in Santa Monica that is usually abuzz with tourists and entertainment professionals, had by Thursday transformed into a refuge for Los Angeles residents displaced by the raging wildfires that have ripped through thousands of acres and leveled entire neighborhoods to ash.
In the middle of one table sat something that has probably never been in the lobby of Shutters before: a portable plastic goldfish tank. “It’s my daughter’s,” said Kevin Fossee, 48. Mr. Fossee and his wife, Olivia Barth, 45, had evacuated to the hotel on Tuesday evening shortly after the fire in the Los Angeles Pacific Palisades area flared up near their home in Malibu.
Suddenly, an evacuation alert came in. Every phone in the lobby wailed at once, scaring young children who began to cry inconsolably. People put away their phones a second later when they realized it was a false alarm.
Similar scenes have been unfolding across other Los Angeles hotels as the fires spread and the number of people under evacuation orders soars above 100,000. IHG, which includes the Intercontinental, Regent and Holiday Inn chains, said 19 of its hotels across the Los Angeles and Pasadena areas were accommodating evacuees.
The Palisades fire, which has been raging since Tuesday and has become the most destructive in the history of Los Angeles, struck neighborhoods filled with mansions owned by the wealthy, as well as the homes of middle-class families who have owned them for generations. Now they all need places to stay.
Many evacuees turned to a Palisades WhatsApp group that in just a few days has grown from a few hundred to over 1,000 members. Photos, news, tips on where to evacuate, hotel discount codes and pet policies were being posted with increasing rapidity as the fires spread.
At the midcentury modern Beverly Hilton hotel, which looms over the lawns and gardens of Beverly Hills, seven miles and a world away from the ash-strewed Pacific Palisades, parking ran out on Wednesday as evacuees piled in. Guests had to park in another lot a mile south and take a shuttle back.
In the lobby of the hotel, which regularly hosts glamorous events like the recent Golden Globe Awards, guests in workout clothes wrestled with children, pets and hastily packed roll-aboards.
Many of the guests were already familiar with each other from their neighborhoods, and there was a resigned intimacy as they traded stories. “You can tell right away if someone is a fire evacuee by whether they are wearing sweats or have a dog with them,” said Sasha Young, 34, a photographer. “Everyone I’ve spoken with says the same thing: We didn’t take enough.”
The Hotel June, a boutique hotel with a 1950s hipster vibe a mile north of Los Angeles International Airport, was offering evacuees rooms for $125 per night.
“We were heading home to the Palisades from the airport when we found out about the evacuations,” said Julia Morandi, 73, a retired science educator who lives in the Palisades Highlands neighborhood. “When we checked in, they could see we were stressed, so the manager gave us drinks tickets and told us, ‘We take care of our neighbors.’”
Hotels are also assisting tourists caught up in the chaos, helping them make arrangements to fly home (as of Friday, the airport was operating normally) and waiving cancellation fees. A spokeswoman for Shutters said its guests included domestic and international tourists, but on Thursday, few could be spotted among the displaced Angelenos. The heated outdoor pool that overlooks the ocean and is usually surrounded by sunbathers was completely deserted because of the dangerous air quality.
“I think I’m one of the only tourists here,” said Pavel Francouz, 34, a hockey scout who came to Los Angeles from the Czech Republic for a meeting on Tuesday before the fires ignited.
“It’s weird to be a tourist,” he said, describing the eerily empty beaches and the hotel lobby packed with crying children, families, dogs and suitcases. “I can’t imagine what it would feel like to be these people,” he said, adding, “I’m ready to go home.”
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Business
Downtown Los Angeles Macy's is among 150 locations to close
The downtown Los Angeles Macy’s department store, situated on 7th Street and a cornerstone of retail in the area, will shut down as the company prepares to close 150 underperforming locations in an effort to revamp and modernize its business.
The iconic retail center announced this week the first 66 closures, including nine in California spanning from Sacramento to San Diego. Stores will also close in Florida, New York and Georgia, among other states. The closures are part of a broader company strategy to bolster sustainability and profitability.
Macy’s is not alone in its plan to slim down and rejuvenate sales. The retailer Kohl’s announced on Friday that it would close 27 poor performing stores by April, including 10 in California and one in the Los Angeles neighborhood of Westchester. Kohl’s will also shut down its San Bernardino e-commerce distribution center in May.
“Kohl’s continues to believe in the health and strength of its profitable store base” and will have more than 1,100 stores remaining after the closures, the company said in a statement.
Macy’s announced its plan last February to end operations at roughly 30% of its stores by 2027, following disappointing quarterly results that included a $71-million loss and nearly 2% decline in sales. The company will invest in its remaining 350 stores, which have the potential to “generate more meaningful value,” according to a release.
“We are closing underproductive Macy’s stores to allow us to focus our resources and prioritize investments in our go-forward stores, where customers are already responding positively to better product offerings and elevated service,” Chief Executive Tony Spring said in a statement. “Closing any store is never easy.”
Macy’s brick-and-mortar locations also faced a setback in January 2024, when the company announced the closures of five stores, including the location at Simi Valley Town Center. At the same time, Macy’s said it would layoff 3.5% of its workforce, equal to about 2,350 jobs.
Farther north, Walgreens announced this week that it would shutter 12 stores across San Francisco due to “increased regulatory and reimbursement pressures,” CBS News reported.
Business
The justices are expected to rule quickly in the case.
When the Supreme Court hears arguments on Friday over whether protecting national security requires TikTok to be sold or closed, the justices will be working in the shadow of three First Amendment precedents, all influenced by the climate of their times and by how much the justices trusted the government.
During the Cold War and in the Vietnam era, the court refused to credit the government’s assertions that national security required limiting what newspapers could publish and what Americans could read. More recently, though, the court deferred to Congress’s judgment that combating terrorism justified making some kinds of speech a crime.
The court will most likely act quickly, as TikTok faces a Jan. 19 deadline under a law enacted in April by bipartisan majorities. The law’s sponsors said the app’s parent company, ByteDance, is controlled by China and could use it to harvest Americans’ private data and to spread covert disinformation.
The court’s decision will determine the fate of a powerful and pervasive cultural phenomenon that uses a sophisticated algorithm to feed a personalized array of short videos to its 170 million users in the United States. For many of them, and particularly younger ones, TikTok has become a leading source of information and entertainment.
As in earlier cases pitting national security against free speech, the core question for the justices is whether the government’s judgments about the threat TikTok is said to pose are sufficient to overcome the nation’s commitment to free speech.
Senator Mitch McConnell, Republican of Kentucky, told the justices that he “is second to none in his appreciation and protection of the First Amendment’s right to free speech.” But he urged them to uphold the law.
“The right to free speech enshrined in the First Amendment does not apply to a corporate agent of the Chinese Communist Party,” Mr. McConnell wrote.
Jameel Jaffer, the executive director of the Knight First Amendment Institute at Columbia University, said that stance reflected a fundamental misunderstanding.
“It is not the government’s role to tell us which ideas are worth listening to,” he said. “It’s not the government’s role to cleanse the marketplace of ideas or information that the government disagrees with.”
The Supreme Court’s last major decision in a clash between national security and free speech was in 2010, in Holder v. Humanitarian Law Project. It concerned a law that made it a crime to provide even benign assistance in the form of speech to groups said to engage in terrorism.
One plaintiff, for instance, said he wanted to help the Kurdistan Workers’ Party find peaceful ways to protect the rights of Kurds in Turkey and to bring their claims to the attention of international bodies.
When the case was argued, Elena Kagan, then the U.S. solicitor general, said courts should defer to the government’s assessments of national security threats.
“The ability of Congress and of the executive branch to regulate the relationships between Americans and foreign governments or foreign organizations has long been acknowledged by this court,” she said. (She joined the court six months later.)
The court ruled for the government by a 6-to-3 vote, accepting its expertise even after ruling that the law was subject to strict scrutiny, the most demanding form of judicial review.
“The government, when seeking to prevent imminent harms in the context of international affairs and national security, is not required to conclusively link all the pieces in the puzzle before we grant weight to its empirical conclusions,” Chief Justice John G. Roberts Jr. wrote for the majority.
In its Supreme Court briefs defending the law banning TikTok, the Biden administration repeatedly cited the 2010 decision.
“Congress and the executive branch determined that ByteDance’s ownership and control of TikTok pose an unacceptable threat to national security because that relationship could permit a foreign adversary government to collect intelligence on and manipulate the content received by TikTok’s American users,” Elizabeth B. Prelogar, the U.S. solicitor general, wrote, “even if those harms had not yet materialized.”
Many federal laws, she added, limit foreign ownership of companies in sensitive fields, including broadcasting, banking, nuclear facilities, undersea cables, air carriers, dams and reservoirs.
While the court led by Chief Justice Roberts was willing to defer to the government, earlier courts were more skeptical. In 1965, during the Cold War, the court struck down a law requiring people who wanted to receive foreign mail that the government said was “communist political propaganda” to say so in writing.
That decision, Lamont v. Postmaster General, had several distinctive features. It was unanimous. It was the first time the court had ever held a federal law unconstitutional under the First Amendment’s free expression clauses.
It was the first Supreme Court opinion to feature the phrase “the marketplace of ideas.” And it was the first Supreme Court decision to recognize a constitutional right to receive information.
That last idea figures in the TikTok case. “When controversies have arisen,” a brief for users of the app said, “the court has protected Americans’ right to hear foreign-influenced ideas, allowing Congress at most to require labeling of the ideas’ origin.”
Indeed, a supporting brief from the Knight First Amendment Institute said, the law banning TikTok is far more aggressive than the one limiting access to communist propaganda. “While the law in Lamont burdened Americans’ access to specific speech from abroad,” the brief said, “the act prohibits it entirely.”
Zephyr Teachout, a law professor at Fordham, said that was the wrong analysis. “Imposing foreign ownership restrictions on communications platforms is several steps removed from free speech concerns,” she wrote in a brief supporting the government, “because the regulations are wholly concerned with the firms’ ownership, not the firms’ conduct, technology or content.”
Six years after the case on mailed propaganda, the Supreme Court again rejected the invocation of national security to justify limiting speech, ruling that the Nixon administration could not stop The New York Times and The Washington Post from publishing the Pentagon Papers, a secret history of the Vietnam War. The court did so in the face of government warnings that publishing would imperil intelligence agents and peace talks.
“The word ‘security’ is a broad, vague generality whose contours should not be invoked to abrogate the fundamental law embodied in the First Amendment,” Justice Hugo Black wrote in a concurring opinion.
The American Civil Liberties Union told the justices that the law banning TikTok “is even more sweeping” than the prior restraint sought by the government in the Pentagon Papers case.
“The government has not merely forbidden particular communications or speakers on TikTok based on their content; it has banned an entire platform,” the brief said. “It is as though, in Pentagon Papers, the lower court had shut down The New York Times entirely.”
Mr. Jaffer of the Knight Institute said the key precedents point in differing directions.
“People say, well, the court routinely defers to the government in national security cases, and there is obviously some truth to that,” he said. “But in the sphere of First Amendment rights, the record is a lot more complicated.”
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