The reeling US newspaper industry will be eligible to tap a portion of the $2 trillion stimulus package that contains $349 billion earmarked for small businesses.
But the potential rescue package comes too late to help dozens of newsrooms that have been slashing jobs as shuttered local businesses stop advertising. News advertising has plummeted between 20 and 30 percent in the past two weeks compared to a year ago, according to the International News Media Association.
The Washingtonian stopped using freelancers, laid off all its fellows and instituted a 10 percent pay cut for surviving staffers.
The Austin Chronicle is moving from a weekly publication to one that publishes every other week, while the Portland Mercury in Oregon and The Stranger in Seattle suspended their print editions and laid off dozens of staffers.
In Pittsburgh, the 175-year-old Pittsburgh Catholic weekly shut down. Voice Media, which has weeklies in Phoenix, Denver, Houston and Miami, cut staff salaries by 25 percent and executive salaries by 35 percent. The Riverfront Times in St. Louis laid off nearly its entire staff.
The cuts come as demand for coronavirus news skyrockets — a job that requires many reporters to continue to venture outside to do reporting. “Local media is risking it all on the front line of the COVID-19 [coronavirus],” said the Save Journalism Project.
There are some bright spots. Aside from the potential government bailout, Twitter has agreed to donate $1 million to journalism nonprofits. The Texas Tribune and ProPublica said they were hiring four new hires for a joint reporting team.
And Steve Waldman of Report for America is urging the government to dramatically increase spending on local public health advertising: “As the bottom is falling out for local news organizations now — at the worst possible moment — the government can do something to help.”
Unlike Canada, which contained a specific carve-out for local media, there is no such funding in the US stimulus package. But small papers are eligible to apply for general small-business funds.
“The SBA’s definition of a small business in the newspaper industry is under 1,000 employees, and most newspapers are under that figure,” said David Chavern, head of the News Media Alliance, a trade association.
Ken Harding, a senior managing partner of FTI Consulting, thinks it may be a long downward trend: “Print advertising will likely see a more detrimental impact from reduced advertising spend in the next 18 months.”
The ad shrinkage comes as the coronavirus pandemic boosts the news business in terms of overall eyeballs.
According to Comscore, in-home data usage was up 38 percent in the March 15-17 period, compared with the same weekend a year ago, and national TV viewership surged. Cable news networks surged by 73 percent, compared with the same week in 2019, while the big four broadcast networks increased nearly 19 percent versus that same week a year ago.
But while the interest in coronavirus news is boosting some digital subscriptions, “it is nowhere near matching the advertising pullback,” Chavern said.
In its bid to avoid layoffs, BuzzFeed is cutting staffers’ pay by as much as 25 percent while Chief Executive Jonah Peretti will forgo pay as long as the coronavirus racks the economy.
Peretti broke the news in a memo Wednesday, saying salaries will be slashed in April and May on a sliding scale based on salary.
Staffers making less than $65,000 a year will see their salaries trimmed 5 percent, according to the Daily Beast, which was first to report the cuts. Employees making $65,000 to $90,000 annually will reportedly be hit with a 7 percent pay cut, while staffers above that bracket will take a 10 percent haircut. Top executives will see a pay cut between 14 and 25 percent.
“I will not be taking a salary until we are on the other side of this crisis,” Peretti stated. “I understand this will be a real hardship for everyone, but our goal is to make it possible for all of us to get through this.”
He made the move in anticipation of a drop in ad sales as the virus shutters businesses — eliminating the need for advertising.
“We don’t know how long this will last but we want to move quickly to make sure our business remains sustainable,” said Peretti. The News Guild, which has clashed with the company and staged a walkout over stalled negotiations in mid-2019, said it is supportive of the latest move.
“While this obviously isn’t ideal for anyone, we’re glad the company is taking a proactive approach and pursuing options to cut costs that don’t result in job losses,” the Guild said Wednesday. “The work being done by BuzzFeed News staff has never been more vital.”
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