News outlets, long resistant to government help, take loans

US & World

NEW YORK (AP) — The idea of taking government money was once anathema to news organizations that guarded their independence, but attitudes change when survival is at stake.

Axios disclosed to readers of its daily newsletter on Wednesday that it had received a small business loan as part of the federal coronavirus stimulus package. The Tampa Bay Times has said it received $8.5 million through the same program, and the Seattle Times got $9.9 million.

Advertising revenue was cut in half in Tampa Bay with the onset of the pandemic, forcing the newspaper to cut back to two days a week of printed copies, furlough employees and institute pay cuts.

While the small business loan covers only about half of the lost revenue, it will enable the newspaper to recall some employees and restore lost pay for all but top executives, said Paul Tash, company chairman and CEO.

“I didn’t think it was a difficult decision for us,” Tash said.

News organizations have long believed it would be a conflict of interest to receive money from government when it’s their job to report on what it does. Yet the coronavirus has accelerated a 20-year death spiral for traditional media.

Axios, the Washington-area organization that covers the intersection of government, business and the media, said its near $5 million loan ensures no layoffs or pay cuts for its 200-person staff for the rest of the year.

The company promised it would make clear its participation in the stimulus program any time it writes about it.

“As a small business leader, my job is to protect the health and employment of those who work for us, which the loan helps do,” said Jim VandeHei, co-founder and CEO of Axios. “As a media owner, we have a unique obligation to be fully transparent about our participation in (the loan program) and then let our journalism, all of which is free for all to read, speak for itself.”

Kelly McBride, ethics specialist at the Poynter journalism think tank, said she’s spoken to the heads of more than a dozen news organizations about applying for a loan.

In each case, she advised them to go for it — a stance she could not have conceived advocating for at the beginning of the century.

“On an industry level, we have crossed a threshold without putting a lot of thought into it,” McBride said.

It’s clearly a conflict of interest, and not unreasonable for consumers to wonder if an organization receiving government money will aggressively report on what the government does, she said. It’s up to the news organizations to explain to consumers that they will still be closely watching how the stimulus package works.

In Tampa Bay, Tash ran a full-page note to readers in Sunday’s newspaper, promising that the loan would not compromise the organization’s independence or limit its journalism.

McBride said she believed that some organizations wouldn’t reveal their participation until the loan money is in hand. Many are reluctant to talk about their finances, period.

“For a lot of business reasons, they have traditionally been opaque about their finances,” she said. “But there are a lot of ethical reasons to change that.”

At another level, lobbyists for newspapers and broadcasters are pushing in Washington for relief money to be included in the next stimulus package. More than 240 lawmakers have signed on to their proposal, which is for the government to spend $5 billion for health-related advertising in local newspapers, and with TV and radio stations, said David Chavern, president and CEO of the News Media Alliance.

Because of the desire for independence, there remains considerable resistance among news organizations to more permanent funding sources for local journalism, he said.

McBride said she believes there is more reluctance among journalists to publicly support the idea than there is to actually institute more lasting measures. She thinks the time has come.

Many politicians, as much as they feel tormented by reporters, recognize the need for journalism on a local level across the country, Chavern said.

“We’ve been happily surprised at how many people have come out in support of local news,” he said.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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