Despite Pressure On Public Companies, Emmis Will Keep $4.8M CARES Act Loan.

Story by Inside Radio

Bucking pressure from the Treasury Department, Emmis Communications says it has no plans to return the $4.753 million loan it received under the Paycheck Protection Program. Spokeswoman Kate Snedeker tells the Indianapolis Business Journal the company believes it meets the criteria to participate in the program, part of the federal government’s CARES Act, which aims to provide financial assistance to businesses and individuals affected by the COVID-19 pandemic.

“Like most media companies, Emmis’ revenues have been devastated by the COVID-19 crisis; unlike most media companies, we have been able to keep paying all our employees,” Snedeker said in a statement. “Emmis has always had a people-first culture; now more than ever, that paycheck assurance is critical. The proceeds from the PPP loan will enable us to continue providing stability for our employees while we weather this storm together.”

The PPP, which is administered by the Small Business Administration (SBA), provides money to small businesses so they can pay up to eight weeks of payroll costs, including benefits, according to the U.S. Treasury’s website. The money can also be used for paying rent, utilities and interest on mortgages. If the right conditions are met, much of the loan will be forgiven.

Emmis was one of the lucky applicants. One week ago the $350 billion program was out of money although the federal government resumed lending on Monday after President Donald Trump signed a bill Friday that authorizes an additional $310 billion in funds for the program.

But at least 13 public companies have given back a total of $170 million in the stimulus money, amid mounting scrutiny of publicly traded companies that tapped into the program.

The PPP program offers forgivable, 1% interest loans for companies with a maximum of 500 employees. Emmis employs 449 people.

Among those that have returned the money, according to the Wall Street Journal, are AutoNation, the country’s largest car-dealership chain with a $3 billion market capitalization; Ruth’s Hospitality Group, owner of steakhouse chain Ruth’s Chris; and fast food chain Shake Shack. Those large companies were able to qualify for the loans because they employ fewer than 500 workers in one location.

Last Thursday the Treasury Department changed its guidelines for the paycheck loans “amid criticism that dozens of public companies had received funds even as many small independent businesses missed out,” the Journal reported Sunday. The feds told public companies that could tap capital markets to return the funds by May 7.

Indianapolis-based Emmis owns radio stations in Indianapolis and New York, Indianapolis Monthly magazine and Digonex, a dynamic pricing company. Last month, in its first non-radio acquisition since selling off most of its broadcasting assets, Emmis purchased the sound masking business of Lencore Acoustics Corp. for $75.1 million.

Emmis is among central Indiana’s smallest public companies, per the IBJ, with revenue of $29.3 million in the nine months ending Nov. 30.