Extra! Extra! PPP funding helps save California’s oldest newspaper
As its advertising revenue cratered from COVID-19, the publisher of the 169-year-old Mountain Democrat turned to Wells Fargo for help securing a PPP loan.
Over the course of Richard Esposito’s 44-year career in the newspaper business — one that has taken him from New York to California, with more than a half dozen stops in newsrooms across the country in between — he thought he had seen it all. But as the current publisher of the Mountain Democrat in Placerville, California, Esposito admits he never imagined just how quickly a global pandemic and subsequent national shutdown could debilitate even the strongest of local economies.
“Ironically, at the start of the year, we actually saw positive indicators in our industry. The economy was booming, and when the economy is going well, local businesses are advertising. So the attitude was very upbeat,” said Esposito. “When the pandemic hit, it really caused us to spiral downward. My advertising revenues were down anywhere from 40 to 50% in a matter of 30 days. So we were under a lot of financial pressure in that regard.”
As mandatory stay-at-home orders went into effect in California in March, the Mountain Democrat experienced an increase in new digital and print subscribers, as local residents turned to the paper for updates on the pandemic. However, as the publisher of California’s oldest newspaper, Esposito knew the drop in advertising was going to force significant cost cutting to his staff if he wasn’t able to supplement that revenue stream.
“This is a special newspaper — the Mountain Democrat was started in 1851 during the gold rush era — and it’s always been a well-respected and important part of El Dorado County,” he said. “With people being quarantined at home, they sort of found the newspaper again. And it really represented why it would be such a horrible situation if our newspaper was to not survive the economic downturn.”
Esposito’s concerns have been felt by other newspaper publishers across the U.S., according to a recent survey from the Local Media Consortium. The report details an industrywide decline in advertising revenue due to the pandemic, which has resulted in furloughs, layoffs, and even the closure of more than 50 U.S. newsrooms.
‘The loan was a lifeline for the newspaper’
To keep the Mountain Democrat’s staff of 30 in place and continue to print the 169-year-old newspaper every Monday, Wednesday, and Friday, Esposito needed to secure a cash injection quickly.
With the clock ticking, he leaned on his decade-long relationship with Kevin Barri, Wells Fargo region bank president for the greater Sacramento area, for guidance on how to move forward. The two decided the best approach for the newspaper was to apply for a loan through the Small Business Administration’s Paycheck Protection Program, or PPP. (As part of the U.S. government’s $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act in March, PPP loans were offered to small businesses to supplement lost revenue and keep their workforce employed during the COVID-19 crisis.)
“The thing about Wells Fargo I really appreciate is the candor and the communication,” said Esposito. “During the timeframe of securing our PPP loan, I was consistently receiving communiqués, with the overall process and where the bank was in the process. It really just gave me a sense of comfort and relief knowing we were getting there — I didn’t feel like I was abandoned, that’s for sure.”
Barri and his Wells Fargo team in Northern California were able to help the Mountain Democrat navigate the PPP loan process and get funded during the second round of PPP, securing a $200,000 loan for the newspaper — which is forgivable if certain requirements are met on schedule. Recognizing the importance of ensuring customers understand and meet these requirements, Barri noted that he has 13 bankers in his region on redeployment assignments solely focused on helping small business customers manage their PPP loans.
“El Dorado County is a residential setting with a long history of small communities up here in the foothills, and this newspaper is really the connection for these residents and businesses that are trying to make a living,” said Barri. “Richard and I spoke numerous times about how they were going to use the PPP funds, and first and foremost, it was critical to keep his people employed at the paper — people who, in my opinion, are doing an essential job in delivering the news to our local communities.”
Esposito added, “This loan was a lifeline for the newspaper — without the money I would have had to make substantial cuts to our staffing and our operations. With the money, it was a lifeline for us to keep our employees here, keep the news flowing here locally in our county.”
‘We’ve been in this community for 169 years, and we just wanted to give back’
While COVID-19 represents what is hopefully a once-in-a-lifetime experience for most of us, the Mountain Democrat had existed for nearly 70 years already when its news pages reported on the last pandemic, the Spanish Flu, in 1918.
With roots that old and deep, Esposito and his staff felt the responsibility to help other small businesses in the area survive the worst of the shutdown. The significant drop of retail advertising in the newspaper meant they had the opportunity to get creative with that help.
“Because we got the PPP money and I was able to keep my staff intact, we were able to provide some programs to our local businesses. One was, each Friday, we offered free advertising to every restaurant in the county to promote what they were offering for takeout, since they were closed otherwise,” Esposito said. “We’ve been in this community for 169 years, and we just wanted to give back.”
The free advertising space was well received and, for several weeks during the spring, the Mountain Democrat was running more than three full pages of restaurant ads each Friday. Now as local businesses continue to reopen to varying degrees and the U.S. continues to acclimate to the new normal presented by the ongoing COVID-19 health crisis, Esposito is cautiously optimistic for the rest of the year.
“Our PPP money just recently ran out, but that’s OK — it got us over the hump, so to speak,” he noted. “Our advertising is seeing an uptick, our business is back on track, and I have a positive outlook for the newspaper for the rest of the year.
“If it weren’t for the PPP loan and assistance from Wells Fargo, this newspaper would have really struggled. Journalism is very important to the American society and our way of life, and fortunately here locally, the Mountain Democrat remains an important part of the community fabric.”
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