Seven West Media inks $30 million a year Google deal

Seven West Media has inked a deal with Google worth more than $30 million a year for its news content, as the federal government prepares to legislate new laws to make the tech giant and Facebook compensate news publishers.

The Kerry Stokes-controlled media company announced to the ASX on Monday that it had landed an agreement for a “long term partnership” with Google to provide news content to its Google News Showcase product.

Kerry Stokes’ Seven West Media is the first large media company to agree to a deal with Google for its news product.Credit:Philip Gostelow

The announcement did not state the monetary value of the deal, but industry sources said it is worth more than $30 million a year.

Seven is the first media company to sign a deal with a technology giant since high level talks took place between Prime Minister Scott Morrison, Treasurer Josh Frydenberg, Facebook chief executive Mark Zuckerberg and Google chief executive Sundar Pichai.

It also makes Seven the first large local media company to strike a deal with Google for its Showcase product, joining an array of smaller publishers who have already signed on.

Ahead of Seven’s announcement, Mr Frydenberg confirmed he had spoken with Mr Zuckerberg on Sunday, and with Mr Pichai on Monday morning.

“We have made great progress over the course of the weekend and I think we are very close to some very significant commercial deals. In doing so, that will transform the domestic media landscape,” Mr Frydenberg told ABC radio on Monday.

Parliament is set to debate the Morrison government’s proposed news media bargaining code this week, which could become law by the end of the sitting fortnight.

The code uses the threat of mandatory arbitration to force the digital platforms to broker commercial deals with Australian media companies for the value they obtain from having news content in news feeds and search results. It will also force them to comply with a number of strict regulatory provisions, including giving media companies 14 days’ notice of major algorithm changes.

However, Prime Minister Scott Morrison and Mr Frydenberg have urged the tech giants to strike deals with news publishers outside of the media bargaining code in a series of high-level talks with Google and Facebook over the last two weeks.

Seven West Media chairman Kerry Stokes said the deal was a great outcome for the two companies.

“I’d like to thank Prime Minister Scott Morrison and the chair of the Australian Competition and Consumer Commission, Rod Sims, with particular recognition of Treasurer Josh Frydenberg, who has been instrumental in the outcome of this ground-breaking agreement,” Mr Stokes said.

Google launched its news product News Showcase two weeks ago with small to medium publications such as Crikey, The Saturday Paper, The Conversation and Australian Community Media, which publishes the Newcastle Herald.

Google managing director Melanie Silva said the deal would cover all of Seven’s titles including The West Australian, 7News, PerthNow, The Albany Advertiser, The Geraldton Guardian and The Broome Advertiser.

“Our partnership with Seven West Media sees us make a substantial investment in the future of journalism not just across the metropolitan areas, but importantly in regional areas too where titles like The Kalgoorlie Miner and The Harvey-Waroona Reporter are at the heart of the local community,” she said.

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