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BRA loan to Bay State Banner: Hush money?
By adamg on Fri, 07/17/2009 - 12:11am
The Globe reports Tom Menino's decided to have the city loan up to $200,000 to investors in the Bay State Banner to help keep the paper going.
The money would come from a fund managed by the BRA. In April, the Banner called for Menino to resign because of the way the BRA was handling redevelopment of a parcel across from Boston Police headquarters - and said "no self-respecting African-American" could vote for him. However, Menino denied using city money to help prop up the Banner was an attempt to stifle criticism:
I will step up any time and help any business in this city. I'm trying to help a business survive. Tell me if that's wrong.
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Comments
Mumbles would like to thank
Mumbles would like to thank the taxpayers of Boston for donating $200,000 to his re-election campaign.
Weird
The news media should really keep the government at arm's length...
yeah but
yeah but, they don't really have a choice, do they?
Dear Mr. Mayor
In answer to your question - this is wrong - on many fronts - don't do it. By the way - who funds this BRA "non-profit"?
Anybody read the globe comments - I think they were 90% or more against - I've never seen that kind of unanimity on any issue in a comments section.
funded by
Apparently the A.C. Ratshesky Foundation funds some of it:
http://ratsheskyfoundation.grantsmanagement08.com/...
and the Eastern Bank Charitable Foundation has granted them money in the past:
http://ne.masscoast.com/media/char_found_ar.pdf
blatant conflict of interest
Not good for the city and not good for the newspaper. Doesn't Professor Ogletree at Harvard have a better plan, that doesn't require this subsidy:
subsidy
Ron - I believe this is a private loan - to be repaid - just to allow them to reopen quickly. Getting investors is a longer process and the paper needs to be back on the streets soon. I don't see how this is a subsidy?
Would "Bailout"
be a better term? The funny thing is, I could swear that some people associated with the Globe have been only half-facetiously suggesting the possibility of a government bailout for their own ailing broadsheet, or perhaps for "the newspaper industry" in general. Not sure how I feel about this- but I don't think I ever heard of the fund Menino's using. Is he both the CEO and Board of Directors of this bank, or does the City Coincil have some oversight of it as well? What other hurting businesses has the BRA bank assisted lately?
the boston local development corporation
The fund is called the Boston Local Development Corporation. You can find more info (but not much) about the fund here:
http://www.bostonredevelopmentauthority.org/econde...
It looks to be essentially a CDC, except with more money. They must have loaned to other businesses, although that info doesn't seem readily available.
The federal government has similar programs, the largest being the Small Business Administration, or the SBA, which is throwing tons of money to small businesses across the country, lots of it from the recovery act. My guess is that BLDC gets funded in part by the SBA.
Loan
I guess this loan is supposed to engender good will from the Banner. What the hell is government doing loaning money to the fourth estate for? So much for impartiality. Bad precedent.
It should be renamed Pravda.
It should be renamed Pravda.
the real hush money would be
The real hush money would be money the government could've used, but didn't. Let's be real, the paper wouldn't be running without a bailout (from someone). A government bailout is not ideal, but I haven't heard of other options. Either you're for no paper, or you're for a paper that owes a debt to the mayor. Take your pick.
The Banner is more than the (sometimes ridiculous) editorials they write about city government. Thank you Mayor Menino for recognizing that and for supporting a voice in the city that has never kowtowed to anyone.
The Banner was big on being "self-respecting". I would hope that they continue to be, despite who is bailing them out.
Ok then
No paper. Thanks.
"I will step up any time and
"I will step up any time and help any business in this city."
Really? Any business? Really?
so much for the Banner?
It appeared that the city's black leadership had managed to rally around this cause and maybe even developed an approach that would forge a unique relationship between that community and the paper.
Now it looks like Boston business as usual.
Question: Is this $200k loan from the City the primary source of capitalization? Or is it a relatively small chunk of a much larger amount that Ogletree and others managed to raise? That could make a difference...perhaps, maybe.
no clue, but...
$200K buys a lot of talent in this town, and it's practically free to publish online.
Know what would be really fun? Somebody (a university?) should fund a competing online-only black community newspaper with a $200K budget, they could go head to head for a year, and at the end of the year there could be some kind of conferencey showdown to judge whether city money impacted coverage, who did a better job, who had more impact on policy, who reached more people in the community, etc. Academics write papers about it, senior theses get done, community outreach mandates get fulfilled, everybody wins.
Pipe dream, I know.
it's a timing issue
David,
The community is rallying and investors are working with the team that is coming up with the business plan. The problem is one of timing - the paper cannot remain closed for a couple months while due diligence is performed - this loan is a bridge loan to be repaid in full - just to enable them to remain open for business during this process. Would have been nice if one of the bailed out banks came forward to provide them with a bridge loan - 44 years of business has to account for something - i guess not.
good point
Yup, in a city that for years has claimed to be the "New" Boston on matters of diversity, where are the leading banks on this one? And $200k is chicken feed to these guys, even if it's a lot to a struggling community paper.
But the govt loan is troubling. The Banner had the chops to call out the Mayor, and now the Mayor is part of the bailout plan. What does that do to the paper's credibility and editorial voice, especially in an election year? This loan comes on the eve of the heart of the preliminary election season.
44 years of integrity
Although it's a fine distinction - I believe this is a private loan only administered by the BRA. Anyone who knows Mel (the publisher) knows that he can't be bought. But it is a good point of discussion - because how papers are funded really needs to be address. I think going non profit should be a consideration for the Banner - but there are complications with that (hands are tied on discussing political issues). I believe that Sen. Kerry is addressing this issue on a national level. The Banner really does provide an important service - no easy answers here.
wheat from chaff
No doubt, the Banner provides some really critical services:
-News that's important to the Boston black community
-News that's important to Roxbury/Mattapan/Dorchester
-An independent set of eyes watching city/state politics
-The institutional memory that goes along with having been in the business almost 50 years
-Relationships in the community they cover (for a newspaper, these cut both ways--they yield valuable information but can also sway coverage)
These should be preserved if humanly possible. But none of them is explicitly tied to the BSB's past business model. Does it need to be physically printed? Are there other ways the BSB could make money, other than just print display ads, that could subsidize their news operation? Are these questions being asked?
Obviously this is a far bigger problem than the BSB, and nobody has come up with a solution to the newspaper business model problem. But it's worth thinking about, especially for an organization that has as much community goodwill and support as the BSB. They have something going for them the Globe doesn't: a devoted, organized community rallying around them.
Right now it looks like the BSB's investors (and it is troubling that the city is among them) are throwing cash onto a blazing fire. But perhaps they are already having these conversations.
I have to say, I don't blame any bank who doesn't want to lend ten red cents to a newspaper publisher right now, bailout or no bailout.
important discussion
Both of you (Harris and anon) make good points, and though right now the Banner may be in too acute a condition to debate the long-term, they need to be considered.
The question of an online edition raises issues of the digital divide. I hope I'm not engaging in stereotyping, but given the dominant income brackets of the Banner's readership, is it possible that a big chunk of readers could have severely diminished access to the paper if it went completely online?
totally possible.
It's also possible that a big chunk of their potential younger readers aren't getting it now, because they get most of their info online/on mobile phones. (I know they have a website, but it's kind of an afterthought to their print product, like most newspapers.)
You don't often hear the youth-news-access issue being discussed with quite so much reverence as the issue of the Digital Income Divide. It usually sounds more like You Damn Twittery Blogthings Can't Read, Also Get Off My Lawn.
tweet divide is hopeless
Well, I'm sounding like an old fogey now, but I give up when it comes to the Twitter divide.
The very notion that serious news and ideas can be adequately discussed in 140 characters or less is so foreign to me that I have trouble controlling my rant.
well, you're right.
They can't.
That doesn't mean newspaper editors/publishers/reporters won't have to be very well versed in the workings of whatever social-media thingybob people are currently using most. Lots of people use Twitter to find the news they care about.
You'd be surprised
I used to dismiss it, too, I mean, who cares where I'm eating lunch today? Well, since you asked, on the porch, probably tuna on an English muffin :-).
But a) It can grow on you, b) The secret is in deciding whom to follow and c) People who do have more to say than can fit in 140 characters will link to a blog post. Think of it as more of a headline service than the front page of the Times. Both certainly have their uses.
Obviously, I'm finding it interesting for breaking news (like, "OMG, the Red Line is dead again," sort of stuff), but it's even fun just for kibbitzing during Sox games (what? Not everybody is online while watching baseball?). And from a pure business standpoint (which I hate even thinking about, but given that UH is now my main source of income ...), it's also become a major source of traffic - people following links to UH posts.
Chat service
Re: Sox games. Exactly.
It's like a giant IM session with everyone on Twitter, but you only have to read the comments from the people/searches you want. Twitter users developed a channel-like system of "hashtags" where you can easily find everyone discussing the same live event (like a Sox game or TV show) if the crowd tags their comments in the same way.
Example: OMG, Lugo is finally gone? #redsox
Anyone posting Red Sox discussion knows to add #redsox to the end of their tweet. Anyone looking for Red Sox discussion knows to search for #redsox to get the latest comments.
also...
Apparently only old fogeys use Twitter.
(FWIW, I'm 33, and a skeptical Twitterer who keeps finding new uses for the damn thing. I think the main question is: Are your friends, neighbors and colleagues using it? If so, it'll be useful to you; if not, it won't.)
Grrrrrrrrrrrrr
Twitter has become my digital Rubicon. Dunno if it's irrational.
I don't know many folks who use it, so that makes my reaction a little easier from a practical standpoint...
I'm not crossing either
I like it on this side of the tweeting rubicon - tweeting is for the birds! As for a digital BSB - didn't Mel king say early on in this affair that he would definitely NOT be opening a digital version? Seem to have a recollection of that.
Plus, his VP says online is a sucker's game
Because she doesn't think she can compete with the Globe.
no a suckers game
online only is not an option for us (the Banner) - I know the numbers and it's not feasible. Would love to not have the headache of print cost and distribution! Personally, I'm an online person for my daily news (from universal hub) - but a weekly paper serves a different purpose - not the lastest breaking story. Our online could definitely be more dynamic and provide more viewing options - but again - we have very limited resources. We have big dreams and little budgets - obviously! It's hard to be small in America!
-
Why we're wrong to raise the issue of impropriety
Mike Ball writes that, among other things, the fund that would loan the Banner the money to help arrange long-term financing routinely makes such loans to local small businesses, many minority owned. Also:
He may want to read a little closer
Ball claims that the fund has made many such loans - some in excess of this amount - I don't think so (not sure where this information comes from - from some comments I've read people are looking but as usual the BRA puts out very little information-admittedly haven't looked myself - anybody find this info?):
From the BRA site:
The BLDC provides loans of up to $150,000 for businesses in, or relocating to, the City of Boston. These loans can be used when buying a new business property, purchasing equipment and machinery, constructing an addition to an existing plant, making leasehold improvements or providing working capital to grow your business.
This loan is for $200k - far more than the $150k limitation and the only category this MIGHT fit would be working capital to grow the business - nothing against the Banner - but I don't see any print newspapers "growing" and thus having a need for additional working capital except to prolong the agony of going out of business.
Always so easy to make bad business decisions with OPM.
'The formerly independent Bay State Banner'
Dan Kennedy discusses why accepting the BRA loan was a bad idea: