Sports Illustrated publisher Maven is the latest media company to reveal it received a federal coronavirus loan.
The Seattle-based publicly traded company, which also owns TheStreet, was approved for a $5.7 million Paycheck Protection Program loan by the Small Business Administration on April 6, according to a filing it made to the Securities and Exchange Commission.
The loan approval came days after Maven laid off 31 people, the equivalent of 9 percent of its staff, and shrank executive pay by almost a third as it grapples with an expected $30 million loss in revenues this year due to COVID-19. Around 6 percent of Sports Illustrated journalists, who were hit by a separate round of layoffs, were impacted.
In the filing, Maven, which employs approximately 300 staff, said it will use the proceeds primarily for payroll costs, but did not mention rehiring those that had been laid off.
“We’re a young company in a dynamic industry hit hard by COVID-19. We’re strictly adhering to the government’s parameters around these funds and appreciate the assistance during these uncharted times,” a Maven spokesman said despite a growing backlash against publicly traded businesses tapping into the funds.
The PPP, which is part of the CARES Act, offers struggling small businesses with less than 500 employees as well as other eligible companies loans of up to $10 million and will forgive them if all workers are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest or utilities.
But since the program was launched, it has emerged that a number of larger public companies, including Ruth’s Hospitality Group Inc. and Shake Shack Inc., were given loans due to an exemption for large restaurant chains and hotel groups at a time when small firms couldn’t access the cash. After coming under fire, Shake Shack, which has more than 7,000 employees, also repaid its $10 million loan. So, too, did, Ruth’s Hospitality. Elsewhere, franchise The Los Angeles Lakers received a $4.6 million loan, which has since been handed back.
As a response to widespread criticism, the Treasury Department urged public companies that have access to other capital to return the money by Monday, but it’s been reported that many kept the loans, insisting that they are eligible. The Treasury plans to review loans in excess of $2 million before forgiveness.
Since there’s no publicly available list of which companies have been approved for a loan, to date most of the disclosures have come through public filings and voluntary announcements.
After trying and failing to get more clarity on which companies have been approved through Freedom of Information Act requests, a group of media organizations — The New York Times, Bloomberg, ProPublica, The Washington Post and Dow Jones, the publisher of The Wall Street Journal — have sued the SBA.
“Enormous amounts of taxpayer money are being committed to what is supposed to be a lifeline for millions of struggling American businesses,” said ProPublica general counsel Jeremy Kutner in a statement posted on its web site. “The public has an urgent right and need to know how it is being spent, and whether it is being directed to those most in need. We are pleased to be acting along with colleagues at other leading news organizations to make sure this information promptly sees the light of day.”
Maven joins Bustle Digital Group, The Tampa Bay Times and The Seattle Times Co., who are among the other media companies that have disclosed they received loans from the $659 billion PPP fund. Newsday and the Chicago-Sun Times also received loans, although the majority of local newspapers and broadcasters, which are struggling amid the pandemic, aren’t eligible because of the way they are structured.
Political news site Axios got approved, too, but handed back its near $5 million federal small business loan last month after receiving criticism for taking a loan as a venture-backed company and the fact that it is a media organization covering the federal government.
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