How P3 Loans Saved Minnesota’s Newspaper Industry – For Now

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It has certainly been called a dumping ground for Friday news. Just before 6 p.m. on March 12, the Star Tribune published an article on its website. acknowledging having received a loan of 10 million dollars of the Paycheque Protection Program to counter the loss of advertising revenue related to the pandemic. As if we needed more evidence of the current issues facing the information industry.

The story was easy to miss given the other headlines of the day – the city of Minneapolis’ $ 27 million settlement to George Floyd’s family and the jury selection in the Derek Chauvin murder trial. It was posted the next morning on page B5 of the combined Minnesota / Business section.

The $ 10 million loan is the maximum allowed under the second round of PPP, which is part of the nearly $ 900 billion relief plan adopted by Congress and signed by then-President Trump in December . This bill provided $ 284 billion for forgivable loans to small businesses and expanded eligibility to thousands of newspapers, television stations and radio stations excluded when the P3 was first rolled out.

It is not known how many Minnesota newspapers have applied for or received P3 loans. The Pew Research Center reported nearly 2,800 news companies Loans were received nationwide last year under the CARES Act, the first federal coronavirus relief bill passed in March 2020. MinnPost received $ 250,700 in the first round of PPP loans.

In this first round of loans, individual news outlets belonging to large corporations and media chains failed to qualify. A provision introduced by Senator Maria Cantwell (D-Wash) and supported, among others, by Minnesota Senator Amy Klobuchar – the daughter of former Strib and MinnPost columnist Jim Klobuchar – addressed that. Eligibility in the December bill has extended to more than 2,000 newspapers and 3,300 television and radio stations.

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In an email to MinnPost, Star Tribune publisher and CEO Mike Klingensmith said the newspaper was not eligible for a first-round loan because it was considered a subsidiary of Taylor Corp., l business empire of owner Glen Taylor. The Cantwell provision allowed the Strib to apply. The loan will be canceled as long as the Strib spends at least 60 percent on payroll costs.

Star Tribune Editor Michael J. Klingensmith

Klingensmith did not say how much advertising revenue the Strib has been down since the start of the pandemic, although last April he told MinnPost he expected a 40% drop through June 2020. ” I can report that we had a very significant advertising loss which was only minimally offset by an increase in subscriber income, ”Klingensmith wrote.

Last year, Guild employees agreed to eight days of unpaid leave and delayed raises, while senior management agreed to pay cuts of 12.5%. Today, the signs of squeezing are still evident if you know where to look. The Sunday Newspaper recovered some, but not all, of its preprinted advertisement. Some stand-alone weekly sections, like Taste on Thursdays and Opinion Exchange on Sundays, remain merged with other sections. The newspaper continues to advertise vacancies but is slow to fill them.

If the big city Strib is feeling the pinch, imagine how bad things are in the Minnesota community and weeklies.

Adams Publishing Group (APG), a national community newspaper company, owns ECM Publishers, which operates 27 newspapers in greater Minnesota. APG received an initial PPP loan of $ 5-10 million, avoiding massive layoffs in its 127 newspapers. Yet APG cut the hours of ECM employees from 40 to 30 hours per week and laid off nearly all freelancers and part-time workers. ECM news director Keith Anderson said full-time employees recently clawed back five hours a week, but most freelancers have not returned.

Closer to the Twin Cities, PPP loans of $ 98,000 (first round) and $ 84,000 (second) allowed the villager of Highland Park to stay in business and avoid layoffs. “This helped cover some significant costs,” publisher Michael Mischke said. “I still don’t know what the future holds, but it was a lifeline for me.”

The 45,000-print villager lost 20% of his advertising revenue when the pandemic hit, Mischke said, and he still hasn’t returned. Even as restaurants and entertainment venues are slowly reopening, Mischke said most don’t have the cash reserves to advertise. It doesn’t help. To keep costs down, in May, the villager will be moving from his four-decade-old home on Snelling Avenue to a smaller space in the Mac-Groveland neighborhood. Mischke said he has been considering this for some time, but the pandemic has accelerated the timeline.

Tesha M. Christensen, owner and editor of Longfellow Nokomis Messenger and Midway Como Frogtown Monitor, said a small first-round PPP loan helped her through a rough patch in May. “A lot of our advertisers hadn’t paid for their ads and our cash flow was very low,” she wrote in an email. “The PPP loan arrived just in time.” She plans to ask for another one.

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Things are even tighter in Minnesota. Reed Anfinson owns and publishes three community newspapers west of Willmar: The Swift County Monitor-News in Benson, The Grant County Herald in Elbow Lake, and The Stevens County Times in Morris. All of them aired between 2000 and 2500, and Anfinson said all of them made modest profits until the pandemic struck.

It was a feat in itself. Swift County alone has lost over a third of its population since 1950, and Internet revenues there are almost negligible. In rural America, print is everything.

“We didn’t have the color red,” said Anfinson, who also writes news, takes photos and presents pages for Monitor-News. “Our staff is down. I could definitely use another writer. I just don’t have the funds to hire another writer. It is a struggle for all the community newspapers that are trying to make these ends meet. “

Two rounds of P3s have provided the three newspapers with approximately $ 240,000 in loans, with every cent badly needed. Advertising fell 20 to 30 percent. The pandemic has eliminated elements that regularly caused robust ad sales, such as large community events and high school sports teams going to state tournaments. This money has disappeared and it is impossible to recover it.

“With the Elbow Lake and Morris newspapers, half the months were months of losses,” Anfinson said. “Without the paycheck protection program, we would have been underwater in both for the year.

“The Benson newspaper, because it has no debt, was able to take it a little better. But we are still noticeably down here. Without the paycheck protection program, we would be in trouble here as well. The margins would have been slim.

They still are. All over.

Correction: This story has been updated to reflect that the Star Tribune is an affiliate of, and not under Taylor Corp. The story has also been updated to state that the ECM operates a total of 27 newspapers in Minnesota.


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