Report: Facebook Is Paying Massive ‘Licensing Fees’ to Media Titans

Facebook CEO Mark Zuckerberg arrives for the 8th annual Breakthrough Prize awards ceremony at NASA Ames Research Center in Mountain View, California on November 3, 2019. (Photo by JOSH EDELSON / AFP) (Photo by JOSH EDELSON/AFP via Getty Images)
JOSH EDELSON/AFP via Getty Images

Despite persistently declining trust, an aging audience, and a business model that can now be threatened by independent content creators on the internet, the legacy media is being propped up by the same tech companies that disrupted them, as outlined by a report in The Wrap. Although Facebook says it is supporting local media, the company is paying massive licensing fees to global media titans like the New York Times, Washington Post, Bloomberg, and Buzzfeed.

The Wrap reports that Facebook plans to pour $1.6 billion into the news media over a five-year period. Although little is known about which media organizations will receive the money, The Wrap found that a “handful of premium publishers” including the Washington Post, News Corp, and Bloomberg receive licensing fees from Facebook.

There aren’t many companies that can say they’ve poured hundreds of millions into journalism in the last few years. Facebook has — $600 million over since 2018 — and it is promising another $1 billion in the next three years.

A Wrap inquiry into the details of the $600 million found that many of those dollars are hard to track, except in the most general terms. When broken down into the main categories mostly based in the U.S., TheWrap could only specifically verify the expenditure of roughly $122 million — barely one-quarter of the pledged sum — begging the question: Where is the money going?

In addition to donating heavily to nonprofits and paying small grants to local newspapers (see graphic), Facebook pays rich licensing fees to a handful of premium publishers, like The New York Times, The Washington Post, News Corp, Bloomberg and BuzzFeed. Those deal terms are not publicly disclosed, but TheWrap has obtained documents of one agreement with a leading U.S. publisher for $5 million over five years.

None of these organizations can be said to be in need of money. The Washington Post’s subscription revenue was reportedly “in the nine figures” as of 2017. The New York Times took home $598.3 million in subscription revenue in 2020. Bloomberg is a giant in the world of finance and media, with over $10 billion in annual revenue. News Corp is an international media empire with over $9 billion in revenue in 2020. These are the companies that Facebook believes need handouts.

The exact sums received by the companies are unknown, but the former CEO of the New York Times is quoted as saying it receives “far, far more” from Facebook than what previous reports have claimed.

And in a recent interview, former New York Times CEO Mark Thompson said the paper is getting “far, far more” than $3 million a year from Facebook, in response to a reporter’s misimpression. (The Wall Street Journal reported that the agreements were worth as much as $3 million a year.)

Facebook isn’t the only company pouring money into news companies. Last year, Google announced $1 billion for news publishers in Europe, the UK, Canada, Australia, Argentina, and Brazil. In 2018, Google-owned YouTube announced it would spend $300 million to fund “authoritative” sources of news, and artificially promote them to users through its algorithm.

Despite their massive revenues and the multi-million dollar handouts they now get from the tech giants, media companies continue to pressure governments for protection from competition. Media lobbyists in D.C. continue to push for the Journalism Competition and Preservation Act, which would give news companies an exemption from antitrust law, so that they can form a cartel to pressure the tech companies for even more special treatment.

Allum Bokhari is the senior technology correspondent at Breitbart News. He is the author of #DELETED: Big Tech’s Battle to Erase the Trump Movement and Steal The Election.

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