Last week, New England Newspapers Inc., the company that publishes the Brattleboro Reformer, received a Paycheck Protection Program loan, which is part of the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act that Congress passed in March. The loan is guaranteed by the U.S. Small Business Administration and the law provides that much of the loan will be forgiven if our payroll remains fairly constant. The part of the loan that is not forgiven must be paid back in 2 years with 1 percent interest.
The Paycheck Protection Program has been in the news for many reasons, and another $320 billion was added to it by Congress on Friday. We expect more reporting and commentary will be forthcoming about this program, and we believe that you should know that we have benefitted from it.
Here are some questions we think you might want to have answered:
Why did you request the loan?
Frankly, we needed some help. The economic impact of the stay-at-home orders has been enormous for everyone, and it has hit us quickly and profoundly. Much of our advertising revenue vaporized as soon as Gov. Scott's stay-at-home orders were issued March 13. Our advertising revenue in March was 22 percent less than it was in March 2019. We anticipate that April's advertising will be 42 percent less than last year, and this trend will continue for at least several months.
Will the loan make a difference?
Yes. The program is designed to encourage employers to keep their workers employed, and payroll costs, not including newspaper delivery, comprise more than half of all of our expenses. The loan ensures that we can continue to publish quality news in print and online.
Will receiving the loan limit your independence or your journalism?
Absolutely not. The loan was made by our local bank, the same bank with whom we have been doing business before COVID-19 was known to anyone. The program does not give the SBA or any other governmental entity the power to affect the internal operation of any loan recipient. We would not have accepted the loan if our independence could have been compromised.
Does the loan solve all of the economic problems created by the COVID-19 virus?
No, although we wish it did. The loan proceeds should cover the losses we will sustain through the end of June. Like you, we don't know when to expect a return to normal business activity, but we do not think that will occur before July 1.
What else are you going to do?
We will use the loan to catch our breath and review all aspects of our operation to bridge the remaining gap. Sometimes we act like we know everything, but we can't foretell the future. So we will make decisions based on educated guesses, constantly reviewing our performance and reevaluating our next moves in light on the latest information. We are exploring the possibility of using philanthropy to help, and our participation in the Report for America project, which is supporting a new full-time journalist, proved its value.
Is there any good news to report?
Yes, there is. The pandemic demonstrated the value of accurate, incisive reporting to the community, which has led to a substantial increase in our circulation in print and online. Not only does increased circulation help defray the lost advertising revenue, but it also shows that there is a future for well-researched and objectively reported information. It makes us believe that our future can be bright.
Why are you telling us all of this?
A newspaper has many constituencies, including advertisers, staff and owners, but our readers are the most important of all. Your trust in us is our most important asset. We intend to report on the Paycheck Protection Program in the coming weeks and months — its successes, its failures and myriad issues arising from it. We would not deserve your trust if we were not up front about our participation in, and reliance upon, this program.
What else should we know?
Four years ago, we proudly announced our audacious twin goals — to create the finest group of community newspapers in America and to build a company that would last for decades. The COVID-19 virus has dealt us a stinging blow, but we have recommitted to these goals; indeed, ownership has made additional investments after the virus attacked. We never thought we would turn to the federal government to help finance our operations, and we pledge to use its money wisely and treat it like it was our own. Mostly, we want you to know that we are here for you, our readers, and intend to remain.
Please do all you can to stay healthy, and please keep reading the Reformer and supporting quality local journalism.
We're in this together.
— Fredric D. Rutberg, president and publisher of the Brattleboro Reformer
