Star Tribune Media Co. last month received a $10 million loan, the maximum amount, from the second round of the Paycheck Protection Program (PPP) to help it grapple with a significant decline in advertising revenue during the pandemic.
"Like many media companies, Star Tribune was hit hard by the disruption to our advertising base," Mike Klingensmith, the company's publisher, said in a statement Friday.
"This loan should help us continue to weather the ongoing effects of COVID-19 on our business," he said. "More important, it ensures we'll be able to continue reporting to the fullest extent on the pandemic and other issues important to Minnesotans."
More than 2,000 news organizations around the country, ranging from small community newspapers to regional ones such as the Seattle Times, also applied for and received PPP loans in the past year.
More than 5 million loans were given out last year in the first round of the federal program aimed at helping maintain jobs during the pandemic. The $900-billion relief package passed by Congress in December made funds available for a second round.
Under the rules of the program, at least 60% of the funds have to be used for payroll costs. The remainder can be used for rent and other types of operating expenses. The loan is forgiven if the funds are used for approved purposes.
In an e-mail to employees on Friday, Klingensmith noted that advertising has not yet come back in 2021 at the levels the company had expected and budgeted.
"So this PPP loan is well timed, and should help us weather all reasonable setbacks," he said.
Last fall, Star Tribune Media shut down City Pages, the alternative weekly newspaper and website, saying its business model was no longer sustainable since it largely relied on advertising from events, nightclubs, bars and restaurants, which had been devastated by the pandemic. Thirty employees lost their jobs.
For six months last year, the company asked hundreds of its employees to accept unpaid furloughs amounting to about 6% of their normally scheduled work.
