Sports Illustrated’s publicly traded publisher, Maven, says it plans to keep and use a $5.7 million forgivable loan from the federal government, despite mounting criticism of public companies receiving funds through the U.S. Small Business Administration’s Paycheck Protection Program (PPP).
Maven disclosed the loan Monday in an SEC filing, saying it will use the funds primarily for payroll costs, as required by SBA guidelines. The Seattle-based company owns TheStreet, Say Media, and Hubpages in addition to Sports Illustrated and other media properties.
“We’re a young company in a dynamic industry hit hard by COVID-19,” a Maven spokesperson said in a statement. “We’re strictly adhering to the government’s parameters around these funds and appreciate the assistance during these uncharted times.”
PPP loans are forgivable for qualifying small businesses with 500 employees or less that retain their workforce or use the money to rehire laid-off employees. Businesses can apply for loans equivalent to up to 250% of their monthly payroll.
Maven laid off 31 employees on March 30, about 9% of its workforce, leaving it with about 300 employees at the time. The company entered into the PPP loan agreement with JPMorgan Chase on April 6, according to the SEC filing this week.
We’ve asked the company if it plans to restore any jobs or salaries as a result of receiving the loan.
Maven expects to be profitable later this year, the company said Tuesday in a letter to investors and employees, posted on its website.
“Our core business continues to grow, in terms of traffic, video inventory and new partnerships,” the letter reads. “COVID-19 has accelerated our core thesis that independent media brands cannot achieve profitability or scale on their own without an efficient platform leveraging big-scale distribution; subscription, advertising and sponsorship monetization; and advanced publishing technology.”
The company said SI is profitable and growing, with organic traffic increasing by more than 10 million monthly users in the first 120 days under Maven’s watch. “SI, which lost millions of dollars over the last two years, is now a growth engine,” the letter notes.
More than 200 publicly-traded firms have received a combined $1.5 billion in PPP loans. Those companies came under fire since the loans were designed for small businesses that need the money to weather the COVID-19 crisis. Some decided to return their checks after a directive from Treasury Secretary Steven Mnuchin, but at least 30 companies will keep the money, The Wall Street Journal reported Tuesday.
Some privately held, venture-backed companies that were approved for the loans have also decided to return or decline them.
The PPP process has been clouded by confusion since its inception due to shifting guidance on loan forgiveness and on what types of companies should receive loans.
RELATED: Why these tech startups turned down millions of dollars in PPP loans from the federal government
Seattle-based RealNetworks, the 26-year-old, publicly traded streaming media pioneer, received a $2.87 million PPP loan, as GeekWire reported last month.
The New York Times profiled RealNetworks on Tuesday, reporting on the company’s decision to keep the PPP loan and contrasting the company with a publicly-traded sporting goods manufacturer, Escalade, that decided to return the money, partly due to the potential for negative publicity and fear of violating federal guidelines.
Other publicly traded Seattle-area tech companies have also received PPP loans. Bellevue-based BSQUARE, a publicly traded Internet of Things technology company, said on April 10 that it received a $1.6 million PPP loan. Publicly traded Microvision, the Redmond-based laser projection technology company, received $1.57 million through the program.
Mnuchin said last month that companies that received loans of $2 million or more would be audited.
Maven is led by CEO James Heckman, the Rivals.com founder and former Yahoo executive. Maven launched in 2017 and made headlines nationally after purchasing publishing rights to Sports Illustrated last year.
Layoffs at the venerable sports magazine in early October drew criticism from employees and unions. Maven raised $20 million in October. The company was also in the spotlight last month after it fired longtime soccer journalist Grant Wahl after he criticized its handling of job cuts and salary reductions amid the COVID-19 crisis.
Editor’s note: GeekWire applied for and received a PPP loan. More here.
