Newspapers have begun a lobbying campaign for Congress to provide more financial support to local newspapers during the coronavirus crisis.

Some publications (the Arkansas Times was one) received payroll protection loans through the SBA in the first round of COVID-19 assistance to see them through a few months in an already tottering business.

Said a dispatch from the Arkansas Press Association, which also distributed the cartoon above:

Congress recently approved a replenishment of $475B of the SBA program to assist businesses impacted by COVID-19. Unfortunately, this action did not include a provision to specifically provide affiliation waivers for local news providers.

 

We will continue our push to include local newspapers in the next round of funding, along with our other priorities to support members of America’s Newspapers.

The problem is that American newspapers are increasingly owned by a relatively few large corporations. They are too large to qualify for SBA loans.

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The Wall Street Journal illustrated this in an article yesterday that drew on an Arkansas example.

It reported that the Seattle Times, with a staff of 700, had received a $10 million loan but the Arkansas Democrat-Gazette could not receive a loan, along with about 80 percent of the country’s newspapers, which are owned by large corporations.

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The Arkansas Democrat-Gazette is in essentially the same financial distress as the Times, with a similar size workforce among its parent’s publications. Yet it isn’t eligible for the aid and had to furlough or cut pay for 10% of its 900 employees this month.

The reason: its parent company, WEHCO Media Inc., has more than 1,000 employees—the Small Business Administration’s maximum size for newspapers to qualify for the forgivable loans.

Without a push to help newspapers, the article suggests many newspapers might fail. This would be at a time when reliable sources of local information are more important than ever. The article notes University of North Carolina’s research about the loss of more than 2,000 local newspapers since 2004. It also notes that Sen. John Boozman was among a group of senators who tried to get provisions for local news outlets that are part of larger corporations covered in the bailout legislation.

To date, there’s been resistance to providing government assistance to large corporations with access to capital. If there is to be assistance for them, their loans should be repaid not forgiven as is the case with small businesses, some say.

The article quoted the majority owner of WEHCO Media, Walter Hussman. He said the company had hoped to return to profitability this year, in part with a ground-breaking switch to digital delivery only six days a week.  But then it was hit by a 50 percent drop in already diminished advertising in April.

“Before this, newspapers were really struggling,” he said. “The question now is whether they are going to be able to survive.”

 

Mr. Hussman opposes a newspaper-specific bailout, though he supports changing the small business rules so that newspapers like his would qualify.

Hussman’s company includes cable TV and daily newspapers in Arkansas, Tennessee and Missouri. The University of North Carolina named its journalism school for him (he’s a UNC alumnus) in September after he made a $25 million gift to the school.

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