Commentary

Are Coronavirus Bailouts Working For Publishers?

A federal bailout program to help companies avoid job cuts during the coronavirus pandemic is in the early stages, with mixed results for publishers so far.

Many local newspapers are ineligible for programs aimed at small businesses because they're owned by big corporations, but there are reports of publishers that have qualified for assistance.

Digital publisher Axios, as one example, yesterday announced tt was approved for the Paycheck Protection Program (PPP) from the U.S. Small Business Administration. The program provides low-interest loans to businesses that will be forgiven if all employees are kept on the payroll for eight weeks.

“We have taken a financial hit like other small businesses," AxiosCEO Jim VandeHei said in a blog post. "Our physical event business is gone until the crisis subsides, and some ad buyers are pulling back to measure the economic fallout.”

Axiosqualified for a loan of almost $5 million, helping to avoid layoffs and pay cuts for its staff of about 200 people for the remainder of the year, he said.

The Tampa Bay Times, the newspaper owned by the Poynter Institute for Media Studies, last week announced it had received an SBA loan of $8.5 million through its local bank. The newspaper saw a 50% decline in advertising revenue, leading to worker furloughs and reduced printing and delivery.

After receiving approval for the funds, the company recalled several employees from furloughs, and restored a temporary 10% pay cut that was set to end the first week of June, the newspaper reported.
Aside from those two examples, it's difficult to see how the PPP benefits many publishers that faced financial hardship even before the pandemic. U.S. newsrooms slashed headcount by 25% from 2008 to 2018, or by 28,000 jobs, according to the Pew Research Center.
Another $500 billion spending deal approved on Tuesday by U.S. Senate leaders doesn't help struggling local newspapers that have suffered plunging revenue. Those publications are owned by parent companies that are too big to qualify as small businesses, Reutersreported.

However, there are many publishers that can qualify for SBA loans when the agency receives its next round of funding. Those publishers, if they haven't already, should talk to their bankers about their eligibility to receive emergency funding that helps to keep people employed during the pandemic.

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