The Los Angeles Times has secured a $10 million loan from the Trump-era Paycheck Protection Program due to dramatic losses in advertising revenue, the paper noted on Tuesday.
Officials with the paper said that the money will go towards covering employee benefits and payroll after the COVID-19 pandemic “dealt a significant financial blow last March” after businesses “abruptly pulled their advertising.”
“The money will be used almost exclusively for employee-related costs, including payroll and employee benefits,” Chris Argentieri, president and COO of the newspaper’s parent company, California Times, told a reporter.
“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,” Argentieri noted further.
Losses stemming from business-related shutdowns blamed on the pandemic forced California Times to sell off a trio of community papers closed in April 2020 as well as lay off business operations staffers.
The pandemic hit at a particularly bad time for the company, which was engaged in a rebuild and a plus-up in staffing that already had a drain on the company’s on-hand cash. The enterprising rebuilding effort was put in place in 2018 after Patrick Soon-Shiong, a biotech entrepreneur, and his wife, Michele, purchased the L.A. Times and the San Diego Union-Tribune from Tribune Publishing for $500 million.
Argentieri admitted that the Soon-Shiong’s are well-to-do but that the loan was secured because the owners want the Times to be profitable on its own standing.
“They have been clear that they want The Times and the San Diego Union-Tribune to be self-sustaining enterprises,” Argentieri said in the interview. “As managers of this organization, we have an obligation to explore every business avenue to raise capital so that we can become sustainable over time.”
Patrick Soon-Shiong tweeted in the middle of February that a Wall Street Journal story claiming he was considering whether to sell both newspapers was not right.
— Dr. Pat Soon-Shiong (@DrPatSoonShiong) February 19, 2021
“WSJ article inaccurate. We are committed to the @LATimes,” he tweeted. “Newspapers are important to the community. Support the @LATimes and @sdut.”
For its part, editors at the Wall Street Journal stood by the story. Steve Severinghaus, a WSJ spokesperson, told The Hill in a statement, “We are aware of Dr. Soon-Shiong’s tweet. We are confident in our reporting and will continue to follow this developing story.”
According to the WSJ report, which quoted people said to be familiar with Soon-Shiong’s plans, the entrepreneur was considering bringing on another investor, selling the company outright, or transferring the ownership to a separate media group.
“The Journal also reported that the billionaire investor considered selling or transferring management of the San Diego Tribune to another company, potentially MediaNews Group, which is owned by hedge fund Alden Global Capital,” The Hill reported.
Earlier in February, Alden announced it would be acquiring Tribune Media for $650 million.
The Poynter Institute for Media Studies said in an October report that the pandemic has “hit U.S. newspapers particularly hard.”
During the second quarter of 2020, median advertising revenue at six changes consisting of more than 300 daily newspapers tanked 42 percent over 2019.