Google searches for media deals before code kicks in

Google is scrambling to sign last-minute deals with several publishers before the mandatory media bargaining code becomes law.

Google chief Sundar Pichai. Picture: AFP

Google is scrambling to sign last-minute deals with several publishers before the mandatory media bargaining code becomes law, after Seven West Media became the first major media organisation to ink a content deal with the ­digital giant.

With the legislation likely to pass the Senate within the fortnight, Treasurer Josh Frydenberg was lobbied over the weekend by Google chief Sundar Pichai and Facebook founder Mark Zuckerberg, with the Treasurer saying they were “trying to reach deals, and that is welcome”.

On Monday, Seven West Media announced it was signing on with Google for its Showcase product, which would see the digital giant pay publishers for access to specially curated news ­material, including paywalled content.

The value of the “five-year-plus” agreement between Seven and Google was not disclosed, but The Australian believes it is well in excess of the $30m-a-year ­reported by some other media outlets. The code is designed to ensure media companies are compensated for their original content that is distributed on search engines and social media platforms.

It is intended as a back-up: if the parties can’t agree on commercial negotiations outside of the code, then the dispute would be sent to final-offer arbitration as per the terms of the legislation. Google has been engaged in ­negotiations with almost every media company in Australia for several months. Prior to the agreement with Seven, it secured deals with Crikey, The Saturday Paper and Australian Community Media, publisher of The Canberra Times.

Australia’s biggest media companies, News Corp Australia (publisher of The Australian) and Nine, remain in discussions with the digital platforms, as does The Guardian Australia and the public broadcasters, ABC and SBS.

On Monday night, Nine newspapers reported that Google was “on the brink of striking commercial deals within 48 hours” with the ABC, The Guardian and Nine itself. But The Australian has been told that while talks continue, a number of “significant issues ­remain unresolved”.

Earlier, Mr Frydenberg reiterated that it was the federal government’s intention to pass the legislation, possibly as early as next week. The government had, however, made some “technical” amendments to the code in recent days, he said.

“These are improvements to the bill, these are technical in ­nature but they also clarify the position of the government and I think they provide comfort to the players that we’ve got a workable code,” he told Sky News. “We’ll make those technical amendments public over the course of the next few days.”

The Australian has been told the amendments do not affect the “spirit of the legislation”. The changes will go to the Coalition partyroom this week, before the legislation returns to the House for a second reading.

Seven West Media chief executive James Warburton is confident the mandatory news media bargaining code will be passed into law, despite his company signing a deal with Google.

Mr Warburton said the media group, which publishes The West Australian, The Sunday Times and 31 regional and community newspapers, had been “extremely supportive of the code all the way through, and continue to be supportive of the code and there’s nothing in this deal that suggests otherwise”.