More than 100 small businesses in the information sector received large federal relief loans amid the coronavirus pandemic, even as various industry groups ask the government to expand aid efforts in a future stimulus bill.
All told, 114 companies in the information sector received loans ranging from $5 million to $10 million under the Paycheck Protection Program, according to recent data released by the U.S. Small Business Administration. The roughly $650 billion loan program — established by the Coronavirus Aid, Relief and Economic Security Act, or CARES Act — is designed to help small businesses keep their workers on the payroll amid the outbreak.
Included in the 114 companies are more than a dozen businesses in the broadcasting, newspaper publishing and motion picture industries, which have all struggled financially amid the COVID-19 pandemic as video production has stalled and local advertising has dried up. Specifically, six of the firms were characterized as motion picture and video production organizations, while another five were newspaper publishers.
National media organizations representing local newspapers and broadcast media outlets — including the News Media Alliance, National Association of Broadcasters, National Newspaper Association and America's Newspapers — collectively called on Congress in April to help provide funding support for local news media amid the COVID-19 pandemic. The groups estimated that local newspapers had lost as much as 50% of ad revenue amid the pandemic, and the National Association of Broadcasters found that some local broadcasters had reported as much as a 90% loss in ad revenues.
In particular, the trade groups asked Congress to ensure that local media outlets could participate in the Paycheck Protection Program. The SBA's affiliation rule restricts assistance to companies owned or controlled by larger entities. As many broadcast stations and newspapers operate as part of larger chains, many local media outlets have been ineligible for relief.
A spokesperson for the National Association of Broadcasters said in a statement that the PPP loans "have provided desperately needed support for stations affected by unprecedented advertising losses, enabling them to continue to serve communities across America that are more reliant than ever on local news and information."
However, data provided by SBA shows that zero companies or organizations characterized as television broadcasters received loans between $5 million and 10 million, the highest range disclosed by the agency.
In terms of companies that have received PPP funds, New York Public Radio said it received an $8.9 million loan. The funds will be used to support the organization's staff, according to a blog post from New York Public Radio CEO Goli Sheikholeslami.
Sheikholeslami also wrote that New York Public Radio has "lost millions in expected sponsorship funding, creating a significant deficit for this year and beyond."
Data from the SBA says the loan helped retain 467 jobs at the organization.
While some companies have challenged the SBA data and denied receiving reported loans, New York Public Radio was not the only recipient listed in the media and motion picture industries to confirm receiving government funds.
Another recipient, The Seattle Times, previously confirmed in an article on the company's website that it received a $9.9 million loan under the program.
Alan Fisco, president and CEO of The Seattle Times Co., said in the article that the loan allows the company to put "broad scale layoffs" on the back burner. Data provided by the SBA says the loan supported 499 jobs at the company.
Still, Fisco said the loan is only a short-term fix and that the company is seeking longer-term federal aid for news organizations.
Newsday LLC also confirmed to S&P Global Market Intelligence that it received a $10 million loan under the program.
Looking forward, the NAB spokesperson encouraged Congress to go further to help local media maintain operations, saying that the group will continue to work with Congress to secure economic relief for broadcasters in the next stimulus package to "ensure stations can continue to stay on the air.”
Congressional leaders are reportedly debating the provisions of a future COVID-19 relief bill. House Speaker Nancy Pelosi, D-Calif., has reportedly expressed a belief that Congress could negotiate a package before it breaks for August recess.