Seth Schachner, Managing Director at Strat Americas, joined Closing Bell's Kristen Scholer to chat about the Journalism Competition and Prevention Act, which would force tech giants like Meta and Google to pay local news outlets to distribute their content.

Meta Threatens to Pull News from Facebook in U.S. as News Competition Bill Gains Steam in Congress

congressional lawmakers on track to pass a bill that would force big tech companies like meta and google today hundreds of local news outlets to distribute their content. Well, the journalism competition and preservation act is meant to give much needed funding to local news publishers, but massive tech companies are pushing back with meta now, threatening to pull news from facebook altogether. So joining me now is, says Shatner, a digital business executive and managing director at Strat America's a business development firm. Seth it's always great to see you and I know many of these local news organizations unfortunately have had to close down or they're in a tough situation that's for sure. Some have even been bought in recent years and so what would this bill mean for them? Great to be here, christian. Yeah, I mean this bill, the J. C. P. A um modeled roughly after I think something that's been very positive in Australia, you know, is designed to, if you will save and help small to mid size media companies, particularly newspapers, broadcasters, that um, you know, just because of the dominance of google and meta in terms of the amount of advertising that they control have kind of been crushed over the last decade or so basically. Um, so I think, you know, it's it's it's definitely something where it is targeting big tech. So I think it's it is designed for larger platforms essentially to set the stage to, you know, pay and to license that news content from, you know, local to mid sized news outlets. And you know, it does come with a, I think a kind of a precedent, a really positive one in Australia um that I actually think, and I think many people have looked at, it has had a pretty positive results in helping small and mid size media companies actually, what would this mean set for local communities, many of which have unfortunately see seen their news gathering process change. Probably the stations that they grew up with or relied on for so long become different and in some sense, if they are still there in the wake of the dominance of companies like meta and google. Oh sure. I mean you, no one would hope if, if, if the bill in the law, if, if it passes and and see if it's implemented properly, you know, transparently that it would in some way move them towards a more positive business basically and allow them to add local staff, local reporters, local resources that, you know, make up the fourth estate. I think both of us know, as part of the heart of what media is all about, it's a pretty special thing and, and I think in some respects, I wouldn't say crushed, but it's really been challenged not only by this advertising issue, but just by, by fake news if you will and challenges around moderation. So I think in a, in a small way it could set the stage to, to really help them by bringing them revenue and replenishing local resources. Okay, so even though companies like google's parent company alphabet and meta of course dealing with their own challenges now just due to a pullback that we've seen an ad dollars. I mean, these are still the biggest companies in the world. And so why do they have so much beef with this legislation? Yeah, I mean, and you know, look, I worked at a really big company for many years, Lots of them. And I think, I think one of the things that's always, uh, kind of quick sand that you want to avoid if you're doing deal making is to set, you know, avoid setting a precedent that you will later regret and I'm not justifying that. But I imagine if you're looking at a new prospect, like we're going to take on this new client where this new partner that we have to pay if you're that giant to your point, if your meta, you know, or your google, you're going to do something called setting a precedent in the market and that might whether you like it or not be a benchmark for lots of different deals. So of course, um, the attorneys, the business developers, the folks that are on the front line are not only going to look askance and draw back but are going to be very careful about the terms that they pay because I think it's gonna be hard to go down what you said a certain price basically. But you know, I would, I would point you to what happened in Australia, um, just about a year and a half ago, where, where this came up from the Australian government and met literally just shut down all the news on the platform for a period of time. And what the law they're actually wound up doing was setting some sort of conditions for for, you know, media publishers to negotiate partnerships, um, you know, with tech titans and it actually is a small amount of money in the scheme of things for these giant ones to your point. So that's what it's about. Okay. Seth. So my final question here, probably the most important question is what happens next and if any change does actually happen ultimately, when might that be implemented in a way that would impact both viewers and users? Well, it sounds like there's some legislative bills and whistles if you will, that are going to happen here. This has been attached to a bill and at the end of the year is coming up. So let's say hypothetically that it passes that I think what you'll probably see maybe some temporary blip where it does get shut down. But you probably would see some sort of deal making procedure, um, process is underway between small and mid sized companies basically to set the stage for licensing agreements and partnerships, but I will tell you that there's a ton of, you know, slippery areas in this slope here. So you want to make sure that if funds do flow, they flow to the right resources. Like you're talking about local resources, not to, not to ceo salaries and they go to, you know, legitimate media source is not, not quack e things or fake news basically. I bet we're a year away, maybe a year and a half away from something like that, but it is a step in the right direction. Look, I think the more real news that we can get out there is certainly the better for society. That's for sure, said Schaffner, always a pleasure. Thank you so much for joining, such as a digital business executive and managing director of Strat. America's, a business development firm.