The Seattle Times received a $9.9 million loan through the federal government’s Payroll Protection Program (PPP), available to small businesses through the Coronavirus Aid, Relief and Economic Security (CARES) Act. Officially rolled out on April 3 and administered by the Small Business Administration (SBA), the federal program provided $349 billion in funding to small businesses.
Eligible companies who have been negatively impacted by the coronavirus pandemic could borrow up to $10 million. The loans do not have to be repaid if at least 75% of the loan proceeds are used to cover payroll costs. The remainder can be used for mortgages, rent or utility payments. To qualify, companies must keep their workers employed or quickly rehire them at the same rate of pay for eight weeks.
This loan will save The Seattle Times from having to lay off staff, cut pay or implement unpaid furloughs as so many news organizations have done in recent weeks due to significant declines in advertising revenue. This drop in income has impacted The Seattle Times as well as other assets it owns including the Walla Walla Union-Bulletin, the Yakima Herald-Republic and a printing facility in Kent, Washington. According to an article in The Times, the newspaper is expecting revenue to be down 45% from ad revenue during the same time in 2019.
“This is a lifeline for us for the next 60 days,” said Alan Fisco, president and chief financial officer for The Seattle Times.
In a memo to employees, Fisco said, “At least for now, we are putting on the back burner any plans for broad scale layoffs or cuts to hours worked. There still may be some targeted reductions, but nothing to the extent of cuts we would have had to make without this support.”
The Seattle Times was among the lucky businesses who received funding before the Payroll Protection Program ran out of money on April 16. Close to 80% of the businesses who applied for a loan were still waiting for an answer when the program’s coffers were depleted. Effective Monday, the federal government approved another $310 billion in additional funding, reports The Times via the Washington Post.
The program has been a source of frustration for many small businesses who have to apply directly through the banks. Those loans are ultimately approved and guaranteed by the SBA, who experienced problems with their web portal on Monday. There have also been some complaints about the large companies and franchises like the NBA who received money under the program.
Poynter’s Kristen Hare has been compiling a list of newsroom layoffs, furloughs, buyouts and other changes as a result of COVID-19. Here are a few notable news organizations impacted by the pandemic. The information was current as of April 27:
- The Stranger, an alternative newsweekly, was among the first news organizations impacted, suspending print and laying off 18 staff on March 13.
- The Times-Picayune in New Orleans implemented a temporary furlough of 10% of its workforce.
- Sound Publishing, the owner of 43 publications in Washington, stopped printing some publications, reduced staff hours, and implemented layoffs and furloughs.
- Gannett has implemented furloughs and other cost-saving measures, including pay reductions for executives.
- Lee Enterprises has implemented 20% pay cuts for executives and is using furloughs and other measures to cut costs.
- MediaNews Group, owned by hedge fund Alden Global Capital, is implementing cuts at The Denver Post, the Boston Herald, the San Jose Mercury News and the East Bay Times.
- The Dallas Morning News is implementing temporary pay cuts.
- McClatchy is putting 4.4% of its staff on unpaid furloughs.
TV, radio and digital media organizations have also experienced furloughs and pay cuts. Read Kristen Hare’s full round-up on Poynter.
We’d love to be able to say that there is light at the end of the tunnel, but no one knows how long the pandemic will last or its short- and long-term effects on the economy or the news business. It seems likely that advertising revenue will be slow to ramp up and may never get back to the level media organizations need to operate. The Seattle Times was fortunate to have gotten some temporary help through the Payroll Protection Program. Will there be similar opportunities for other organizations?
A group of Democrat and Independent legislators in Washington, D.C. are pushing for that, reports Axios. The group wrote a letter to President Trump, stating that the Payroll Protection Program is not enough, that news organizations are considered essential services, and are more important now than ever before. The 19 senators who signed the letter urged the president to include local news outlets in future stimulus packages.