Wednesday, January 6, 2021

Report: Radio, TV Stations, Newspapers Got Special Access To PPP Loans

The latest COVID-19 relief law gives media companies special access to loans, but Sen. Marco Rubio (R-Fla.) made sure online-only outlets were excluded, reports The Huffington Post.. 

The $900 billion COVID-19 relief legislation passed in late December included a second phase of the Paycheck Protection Program, which essentially covers payroll costs for firms that avoid layoffs for at least eight weeks. The law also included more money for federal unemployment benefits and direct payments of $600 per person to most U.S. households. 

The new PPP loan program includes special eligibility provisions for newspapers, TV stations and radio broadcasters, but not digital media companies. (HuffPost is a digital media company.) Democrats pushed to include online-only media companies in the final bill, but Republicans insisted the provision be stripped in the final throes of deal-making.

News media organizations, many of which were already in precarious financial situations before the pandemic, have struggled to maintain advertising revenues in a faltering economy. The industry has seen widespread layoffs, furloughs and pay cuts. In the first six months of 2020, more than 11,000 newsroom employees were laid off. Smaller organizations, like alternative weeklies and community newspapers, have shuttered altogether. 

Digital news companies have also had to tighten their belts. 

Vox Media missed its revenue forecast by 40% in the second quarter, and started asking readers for donations before laying off more than 70 employees over the summer. Vice Media, which includes Refinery29 and Vice TV, laid off more than 150 employees in May, including more than 50 in the U.S. There have also been layoffs and pay cuts at online-only media outlets such as Thrillist, The Dodo, Slate, Gizmodo Media Group, The Onion and MTV.

This collapse is hitting digital-native outlets hardest, since most do not charge subscription fees and thus are disproportionately dependent on advertising revenue.

Many news outlets, both traditional and digital ones, couldn’t get payroll loans because they are owned by a larger firm. The previous PPP counted all employees of a news conglomerate as one entity, making it too big to qualify for Small Business Administration programs. 

The new law includes a waiver for news publishers and broadcasters with fewer than 500 workers “per physical location” to apply for the loans as individual entities instead of as part of a larger media group. The exception was not extended to digital news outlets.

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