Los Angeles Times receives $ 10 million PPP loan
The Los Angeles Times received a $ 10 million loan under the Federal Paycheck Protection Program – money that will help cover payroll and other employee-related costs amid falling backdrop spectacular advertising revenue, the company said on Tuesday.
The news organization suffered a major financial blow last March, when companies abruptly suspended advertising spending amid government-imposed shutdowns intended to slow the spread of the coronavirus. The pandemic has wreaked havoc on the company’s finances, which were already strained following an unprecedented rebuilding effort and a hiring frenzy that began in 2018 after biotech entrepreneur Dr Patrick Soon-Shiong and his wife, Michele, bought the Times and the San Diego Union-Tribune for $ 500. million from Chicago-based Tribune Publishing.
The company, which goes by name California Times, has suffered losses of tens of millions of dollars and has not recovered financially, according to president and chief operating officer Chris Argentieri. Despite the challenges, the two Southern California news outlets were quick to provide readers with information on the pandemic, last fall’s election, and a historic breed toll in America.
The Times asked for the maximum amount it had, Argentieri said.
“The money will be used almost exclusively for employee-related costs, including payroll and benefits,” Argentieri said in an interview. “We lost tens of millions of dollars in advertising revenue almost instantly in March 2020, and the pandemic continues to wreak havoc on public health and wreak havoc economically. We always operate with great uncertainty. “
This is the Times’ first federal loan during the COVID-19 pandemic; the media did not qualify for the PPP program last year. Congress initially adapted the program to target small businesses, which meant companies with more than 500 employees, including the California Times, were not eligible. The two newspapers together employ around 1,400 people.
Last year, lawmakers recognized the devastation of the information industry during the pandemic. A study by consulting firm Challenger, Gray & Christmas Inc. calculated that newsrooms suffered more than 11,000 job cuts in the first half of 2020 and hundreds of media outlets were shut down. Almost 2,800 small newspaper companies received PPP loans in 2020, according to the Pew Research Center. In December, Congress changed the rules governing the PPP loan program to throw a lifeline for major newspapers and local broadcasters who were also struggling.
U.S. Senator Maria Cantwell (D-Wash.) Authored the provision, which was included in the COVID-19 stimulus package, to allow newspapers with fewer than 1,000 employees in a physical location to qualify for the PPP money. Radio and TV stations are now eligible if they have 500 or fewer employees.
“Local news is essential. It makes our communities – and our country – stronger by asking important questions, providing accurate facts and combating misinformation and disinformation, ”Cantwell said in a December statement. “This bill will allow more newspapers, TV and radio stations and public broadcasters to benefit from the Paycheck protection program so that local journalists can keep us informed.
PPP loans can be canceled by the government if companies qualify for the program using the bulk of the money on staff costs to avoid layoffs.
The San Diego newspaper applied for a loan separately, but did not hear if it would receive the funding, Argentieri said.
When the pandemic began, Argentieri said the organization acted quickly to contain costs, cut corporate executives’ salaries and interrupt its 401 (k) matches for many employees. He renegotiated the leases and agreements with the sellers. The company also brokered a deal with the Times Editorial Guild executives, and California-based reporters agreed to 12 days off over three months. Washington, DC-based reporters have also taken time off. The journalists concerned then qualified for financial assistance under programs created to compensate workers and encourage employers to renounce the dismissals.
“We are a company that has been significantly affected by the pandemic, and we have suffered job losses and time off,” Argentieri said. “We asked for this money in order to keep as many people as possible at work. … We thought it would be irresponsible not to ask for this money.
“This is good news as The Times continues to recover from the economic damage of the pandemic,” Los Angeles Times Guild Chairman Matt Pearce said in an email to members of the newsroom. “While hundreds of other editors [accepted] Funding under the P3 program, the LA Times was not eligible for this federal job-protecting aid when we were in the midst of the pandemic last year because the California Times was too big.
Even with the PPP money, the Times will not be profitable this year, Argentieri said.
He defended the decision to receive government aid despite having a billionaire owner.
“We are fortunate to have the owners that we have – they have given us incredible support throughout this crisis and others before it,” Argentieri said. “But they made it clear that they wanted The Times and the San Diego Union-Tribune to be stand-alone businesses. As managers of this organization, we have an obligation to explore all commercial avenues to raise capital so that we can become viable over time. “