WEHCO to receive US loan financing
WEHCO Media, Inc. will receive $ 12.3 million in Paycheck Protection Program loans through the US Small Business Administration, said Walter E. Hussman Jr., president of the company.
WEHCO Media is the parent company of Arkansas Democrat-Gazette, Northwestern Arkansas Democratic Gazette, eight other dailies and eight weeklies. The company also owns a cable television business.
WEHCO has approximately 1,300 employees, Hussman said. About 900 of them work in the company newspapers.
Paycheck Protection Program loans were created to help businesses keep their workforce employed during the covid-19 pandemic.
Hussman said employees at the WEHCO newspaper who recently volunteered to take time off, pay cuts or work hour reductions will no longer need to do so.
Hussman and Nat Lea, president and CEO of WEHCO, emailed full-time newspaper employees at the company on April 13 asking for volunteers.
“We had over 90 people in our volunteer journals, almost 10%,” they wrote in a letter sent to employees of the WEHCO newspaper on Monday evening.
“We asked for these volunteers because of hundreds of thousands of dollars in advertising canceled in March,” they wrote. “In April, all of our newspapers combined saw an even bigger drop, 50% in our ad revenue, something we’ve never experienced.”
Advertising still accounts for more than half of the company’s revenue, they wrote. Other cuts were therefore going to be necessary.
“If it hadn’t been approved, 10% of our employees would not have been enough,” Hussman said Monday evening. “If we hadn’t been able to do this, we would have fewer people to cover the covid-19 crisis.”
Hussman said each of WEHCO’s 21 separate companies received a loan under the program, and the total amount is $ 12.3 million. He said the loans are based on the number of employees.
the Arkansas Democrat-Gazette will receive a loan of $ 4.2 million. the Northwestern Arkansas Democrats Gazette will receive a loan of $ 1.9 million. In addition to being president of WEHCO, Hussman is the editor of the newspapers.
“Originally, we didn’t think we could qualify for a loan from the Federal Payroll Protection Program, or if we maintained our payroll it would result in a discount or subsidy,” Hussman and Lea said in the e -mail to newspaper employees. “However, last week we learned that our company could qualify. As a result, we applied and our SBA loans were approved and funded covering a full eight weeks payroll.”
“This will give us eight weeks for stores to reopen and advertising to return to more normal levels, and if so, that could eliminate the need for further cost cuts,” they said.
According to the US Treasury Department, “The Paycheck Protection Program allows up to $ 349 billion in forgivable loans to small businesses to pay their employees during the Covid-19 crisis. … The loan amounts will be canceled as long as the loan proceeds are canceled. used to cover salary costs and most mortgage interest, rent, and utility costs for the eight week period after loan approval; and employee compensation levels are maintained. Salary costs are capped at $ 100,000 on an annualized basis for each employee.
Hussman said Simmons Bank of Pine Bluff submitted the loan application for WEHCO.
Hussman said WEHCO newspapers were eligible for loans independently and “overall.” News organizations must have fewer than 1,000 employees to be eligible, he said. In addition, “wireline telecommunications” companies are eligible if they have fewer than 1,500 employees, Hussman said, so WEHCO’s cable business is considerably smaller than that.
“There is still a lot of uncertainty, so we’ll have to see what progress can be made by early July,” Hussman and Lea wrote in the email to employees. “Another uncertainty is about borrowing with a federal program, something we have never done. In the event that we have to repay the loan and it is not forgiven, we will incur a significant loss during these two. months. But with our Core Values Statement putting the interests of employees before shareholders, we are prepared to take this risk in order to maintain employee wages, hours and salaries. ”
Metro on 05/05/2020