Struggling Mainstream Media Outlet Receives Massive PPP Loan from Federal Government
The Los Angeles Times is getting $10 million through the federal Paycheck Protection Program thanks to a provision included in the COVID relief bill Democrats jammed through Congress.
The Los Angeles Times announced the loan Tuesday, saying the funding was needed to “help cover payroll and other employee-related costs amid a dramatic plunge in advertising revenue.”
Media organizations have long been eligible for PPP loans based upon their size.
Last year, the news organization Axios returned $4.8 million it received through the program after questions were raised about the optics of a media company accepting money from the government it was covering, according to The Hill.
More news organizations became eligible for funding this time around due to language proposed by Democratic Sen. Maria Cantwell of Washington.
Cantwell’s change made “newspapers and local radio and TV stations that produce and distribute local news and emergency information eligible for PPP funds even if owned by a larger entity as long as the individual radio or TV station has no more than 500 employees or the individual newspaper has 1,000 or fewer employees,” according to a release posted on Cantwell’s website.
“The provision would also make public broadcasters that are operated by large universities eligible for PPP,” the release said.
The LA Times said its parent company, the California Times, has suffered vast revenue losses at the LA Times and the San Diego Union-Tribune, which it also owns.
“The money will be used almost exclusively for employee-related costs, including payroll and employee benefits,” President and Chief Operating Officer Chris Argentieri said. “We lost tens of millions of dollars in advertising revenue pretty much instantly in March 2020, and the pandemic continues to take a toll on the public health and take a toll economically. We are still operating with great uncertainty.”
In 2020, almost 2,800 smaller newspaper companies received PPP loans, according to the Pew Research Center.
PPP loans are forgiven if businesses use most of the money to avert layoffs.
The San Diego paper is also seeking a loan, but has not yet heard whether it will receive one.
The LA Times said it laid off the staff of three community newspapers it then sold in April 2020 and also cut jobs of non-newsroom employees.
“We are a business that has been dramatically impacted by the pandemic, and we have suffered job losses and furloughs,” Argentieri said. “We applied for this money with the intent of keeping as many people employed as possible. … We felt it would be irresponsible not to apply for this money.”
Reporters were told to be glad about the federal money from the Biden administration because it would keep them employed.
“This is welcome news as The Times continues to recover from the pandemic’s economic damage,” Los Angeles Times Guild President Matt Pearce said in an email to newsroom union members.
“While hundreds of other newsrooms [accepted] funding under the PPP program, the L.A. Times had been ineligible for this job-protecting federal relief when we were in the depths of the pandemic last year because California Times was too large,” he wrote.
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