A bipartisan team of U.S. senators proposes revisions to federal law to loosen eligibility rules under which several Washington newspapers were denied payroll subsidies in the first rounds of pandemic-related economic stimulus.

Sen. Maria Cantwell, D-Washington, joined with Senate Minority Leader Chuck Schumer, D-New York, and two Republican senators to introduce legislation today that could revise the eligibility rules of the Payroll Protection Program loans that papers as large as The Seattle Times and as small as The Northern Light in Blaine are relying on to keep journalists on the job.

U.S. Sen. Maria Cantwell, D-Washington (J. Scott Applewhite / The Associated Press)
U.S. Sen. Maria Cantwell, D-Washington (J. Scott Applewhite / The Associated Press)

“Local news outlets are reporting life-saving information about COVID-19 to communities throughout the country,” Cantwell said in a news release Tuesday. “We cannot afford to lose reporters from newsrooms, especially as they play such an important role in keeping the public informed and safe.”

The original Payroll Protection Program targeted small businesses and blocked newspaper companies with more than 1,000 employees from applying.

That meant The Kitsap Sun, Bremerton’s daily, could not benefit, as it is owned by Gannett, the largest U.S. newspaper company. Similarly, The Longview Daily News, owned by Lee Enterprises, a nationwide chain, was ineligible.

Under the bill, newspapers that employ 1,000 or fewer at their physical location and TV and radio stations with fewer than $41.5 million in gross receipts at their physical location would be eligible, said Cantwell spokesperson Ben Marvin-Vanderryn. The proposed changespells out that no portion of the loan could be paid or transferred to a parent company or used for other purposes.

Advertising

Even if the proposed amendments are adopted, the dailies in Tacoma, Bellingham, Olympia and the Tri Cities still would be unable to apply. They are owned by The McClatchy Company, which is in bankruptcy, a condition that makes it ineligible, both under the original law and the revisions, Marvin-Vanderryn said.

The status of loan applications by Sound Publishing, the owner of more than 40 weeklies in Washington as well as The Daily Herald, in Everett, remains unclear. Sound President Josh O’Connor said three weeks ago that Sound’s application was under review. He has since declined to answer four requests for comment.

Congress started with $349 billion in loans across industries, then approved another $310 billion on April 24 when the first round was exhausted.

Borrowers can apply for 2.5 times one month’s payroll, up to $10 million. At least 75% must be used for payroll and no jobs can be cut nor pay rates reduced during the term of the loan. The Small Business Administration will not collect the loans if borrowers abide by the terms.

Other sponsors of the legislation include Republican Sens. John Boozman of Arkansas and Joni Ernst of Iowa, and Democratic Sen. Amy Klobuchar of Minnesota.

The change, if enacted, would make thousands more news organizations eligible for payroll subsidy, sponsors said.

Advertising

They estimate the ad revenue freeze triggered by the  COVID-19 pandemic has cost newspapers up to 50 percent of ad revenue and that local broadcasters report as much as a 90 percent loss in ad revenues.

The sponsors said similar legislation is under consideration in the U.S. House.

New COVID-19 funding legislation unveiled by the House of Representatives includes similar provisions to make local media outlets eligible for funding.