On Friday, President Donald Trump signed amendments to the Paycheck Protection Program law that may offer some Washington state publishers relief from pressure to spend all the loan within eight weeks.

Still, several say even the new flexibility can’t protect the industry from troubles the pandemic-caused recession only accelerated.

Nationwide, newspapers have shed more than half their news staff members since 2008. More than 2,000 newspapers — most of them weeklies — have closed since 2004, according to University of North Carolina research. This is largely because advertisers have embraced low-cost, highly targeted digital advertising purchased from tech titans like Google and Facebook.

When the pandemic hit, newspapers were in the midst of remaking their business model. Federal no-interest loans allowed some of that work to continue, but as that money runs out, publishers have to make big changes.

In Spokane, the daily Spokesman-Review got a PPP loan, but still had to cut its Saturday edition. The company has stepped up its study of an Arkansas publisher’s experiment with subsidizing technology that will replace expensive print delivery.

In Everett, Sound Publishing’s Daily Herald qualified for a loan, but then faced eligibility questions. Sound President Josh O’Connor said his company has been cleared to use the funds and has also turned to readers for help. It has raised more than $118,000 in donations and pledges, setting the stage for more reader-funded journalism.

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A serious round of newspaper cost-cutting had been expected this month as the first round of 60-day PPP loans were set to expire. For publishers like The Seattle Times who qualified as small businesses, the loans were attractive because if all terms are met, the Small Business Administration will not seek repayment. The Times, which also owns newspapers in Walla Walla and Yakima, won a $9.9 million loan.

Seattle Times President Alan Fisco last week notified staff that advertising revenue has not rebounded enough to cover costs. Details aren’t yet hammered out, but some workers will see pay and hours cut by up to 20%, through at least August. That step is similar to cuts Sound Publishing, Gannett and other Washington publishers made when the pandemic froze the economy.

The amendments Congress passed last week extend loan expiration terms to year-end, and borrowers are now being allowed more leeway to spend loan funds on expenses other than payroll. Some found it hard to spend the full amount in two months, which was the original term, and struggled to cover costs not included in the loan rules.

Spokesman-Review Publisher Stacey Cowles landed a PPP loan in the second round and has not yet cut staff, though he did cancel the Saturday edition for the first time in more than a century. He wrote, in an email response to questions, that it’s too early to know if savings on Saturdays, plus revenue from a new printing plant that fired up on June 1, will be enough to avoid staff cuts.

“We’ll take a guess in July about whether it’s enough to ward off print reductions,” he said.

Meanwhile, he is watching The Tampa Bay Times’ cut from seven-day delivery to two, to see if readers accept it well. Cowles said he is meanwhile stepping up his team’s study of the Arkansas Democrat-Gazette’s experiment: giving iPads to about 26,000 subscribers to eliminate print and delivery costs.

Advertising

At The Seattle Times Company, Fisco said reductions in hours and pay will give the company time to see if reopening the economy will generate enough advertising revenue to reverse the pay cuts and furloughs.

“We are not considering any reductions in print frequency in Seattle, given that audience revenue is such a big piece of our overall revenue,” Fisco wrote in response to emailed questions.

Before the pandemic hit, The Times reported more than 60% of its overall revenue came from subscribers, a portion that is rare in the industry nationwide, where advertising still accounts for the majority of newspaper revenues.

For rural and suburban weekly newspaper readers, the change may not be as drastic as it has been for readers of The Stranger, which shut down print publication and laid off staff when stay-at-home orders were imposed.

In Twisp, Methow Valley News Publisher Don Nelson said the PPP loan changes were a relief, as he wasn’t going to be able to spend it all on his seven-person staff before his 60 days ran out. With the extension and with spending rules relaxed, he can now use the loan to pay printing costs and to pay the freelance writers on whom he relies.

But the crisis has the owner of the 2,500-copy weekly paper trying new things. When readers approached him with donations to support the paper, he redirected them to local nonprofits with the money, asking that it be used for ads. “It was sort of a win-win for everybody,” Nelson said.

Perhaps the smallest PPP loan to a Washington newspaper is the $11,000 that went to The LaConner News, a weekly that prints 1,100 copies. Publisher Ken Stern said local retail ads have never kept the paper afloat. His bread-and-butter — legal advertising — has not been much diminished by the downturn, so he expects he’ll be OK, though PPP funds gave him a cushion.

EO Media Group, which publishes the Chinook Observer in Long Beach and a regional business journal, plus 15 papers in Oregon, has cut staff and cut publication days, said Chris Rush, one of the chain’s regional publishers. “We were all moving in that direction anyway, but this kind of puts it on steroids,” Rush said of the move to digital publishing.