The Los Angeles Times has received a $10 million Paycheck Protection Program (PPP) loan to fill a gaping hole in ad revenue caused by the COVID-19 pandemic, the paper reported Tuesday.
The money will be used to cover employee payroll and benefits, the paper said, after the pandemic “dealt a significant financial blow last March” when advertisers “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 California Times, the newspaper's parent company, told a Times 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 added.
The timing of the pandemic was especially bad because a rebuilding effort and staffing increase were already affecting the company's finances. Those initiatives began in 2018 after biotech entrepreneur Patrick Soon-Shiong and his wife, Michele, bought the Times and the San Diego Union-Tribune from Chicago-based Tribune Publishing for $500 million.
Argentieri acknowledged that the Soon-Shiong couple is wealthy but said the loan was needed because the owners expect the paper to be profitable on its own.
“They have been clear that they want The Times and the San Diego Union-Tribune to be self-sustaining enterprises,” Argentieri told the Times reporter. “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.”
In mid-February, Patrick Soon-Shiong stated that a Wall Street Journal report that he was thinking of selling both papers was incorrect.
“WSJ article inaccurate. We are committed to the @LATimes,” he tweeted. “Newspapers are important to the community. Support the @LATimes and @sdut.”
In response, a Wall Street Journal spokesperson said the paper was standing behind its story and was “confident in our reporting.”