Chicago media taking a hard hit from pandemic

With hundreds of journalists idled, ‘there’s never been a more challenging time for newsrooms’

The COVID-19 pandemic has taken a toll on Chicago media.

From furloughs and layoffs to ceasing operations, economic fallout from COVID-19 has idled hundreds of local journalists, just as more people turn to local TV, radio and newspapers for information about the pandemic.

It also has accelerated financial pressures, forcing Chicago media organizations to find alternative funding sources, refocus their missions and rethink their business models.

“There’s never been a more important time for newsrooms and there’s never been a more challenging time for newsrooms,” said Steve Edwards, 49, chief content officer and interim CEO at Chicago public radio station WBEZ.

Keeping reporters on the streets and the public informed through the health crisis has been job one. Media employees were deemed essential workers by Gov. J.B. Pritzker’s stay-at-home executive order in March, and that has proved out during the pandemic.

Local news outlets are a major source of COVID-19 news for 46% of the public, according to a Pew

Research study published in April. That boosted audiences, but with many retail businesses shut down, advertising revenue did not follow.

That has meant employee cutbacks at a long list of media companies. A New York Times report updated in May estimated 36,000 news media employees nationwide had been laid off, furloughed or had their pay reduced since the onset of the health crisis.

In Chicago, the job cuts have claimed some high-profile names across a number of media outlets, many of which were already under financial pressure. The number of newsroom employees across the U.S. — reporters, editors, photographers and videographers — dropped by 23% between 2008 and 2019, according to a Pew Research analysis.

The pandemic has advanced the pursuit of alternative funding and a shift away from the

advertising-supported business model that has sustained legacy media for more than a century.

This year, some foundations have stepped up to stem the losses. In May, the nascent COVID-19 Journalism Fund awarded 48 grants totaling more than $425,000 to support smaller Chicago media organizations providing information about the pandemic. Inaugural recipients included La Raza, Block Club Chicago and the Chicago Reader.

“Without this grant, some of them would have folded,” said Andres Torres, who helped oversee the program’s launch for the McCormick Foundation, one of six Chicago foundations behind the initiative. “This was, in some cases, a lifeline for organizations that were on the brink of saying ‘we don’t know how we’re going to make our next payroll.‘”

Torres said the criteria for investing the foundation’s resources on an ongoing basis will be more stringent than simply surviving the COVID pandemic.

”We want outlets to survive, but to us, that’s not enough,” Torres said. “The outlet needs to be meeting its full civic purpose. Otherwise, it’s media for media’s sake and not media for democracy’s sake.”

The Chicago Sun-Times has received a series of foundation grants to enhance reporting, most recently adding two journalists in May to cover social justice, income inequality, the environment and public health issues through the largesse of the Chicago Community Trust.

The newspaper, which has struggled financially for years, added its first foundation-supported reporter in 2018.

“When you are facing extinction, you have no option but to try something different,” said Nykia Wright, 40, CEO of SunTimes Media. “Every single day was a dogfight to ensure extinction was an additional centimeter away.”

The Sun-Times has avoided layoffs, furloughs or salary reductions during the pandemic. Getting a $2.7 million PPP loan in April has gone a long toward keeping its 164 employees on the job, Wright said.

Launched April 3, the federal Paycheck Protection Program offers businesses with fewer than 500 employees forgivable loans of up to $10 million to cover 24 weeks of payroll. Other Chicago-area media companies that have received PPP loans include public TV station WTTW-Ch. 11, WBEZ-FM 91.5, the Arlington Heights-based Daily Herald and the Chicago Reader.

Few local media have been harder-hit than the Reader, the nearly 50-yearold alternative weekly, which saw a 90% drop in advertising revenue during the pandemic.

Publisher Tracy Baim, 57, a longtime Chicago journalist and co-founder of the Windy City Times, took the helm of the Reader in 2018. Late last year, the Reader announced it would convert to a nonprofit business model, following the path of the Salt Lake Tribune, the first major daily newspaper to make the transition in

November.

The Reader launched the Chicago Independent Media Alliance last year, an organization that brought together small and nonprofit media outlets, in part to “pressure foundations” into supporting community journalism, Baim said.

In May, Baim spearheaded a monthlong fundraiser that generated nearly $160,000 for more than 40 independent Chicago-area media outlets.

The Reader also received a $270,000 PPP loan in May that Baim said was crucial to keeping the publication’s 30 employees on staff through the pandemic. “Without the PPP loan, we would have had to do a huge round of layoffs,” Baim said.

Despite the loan, the Reader announced last month it would scale back to a biweekly publication schedule. Baim said the decision allows the Reader to keep its editorial team intact as it shifts toward a digital future.

“The Reader made a decision to go to biweekly because we wanted to pick people over print,” Baim said “I think ultimately it would have happened anyway. COVID probably accelerated it.”

As a nonprofit organization, Chicago Public Media’s WBEZ-FM 91.5 hasn’t faced the same pressures as its commercial radio counterparts during the pandemic.

The NPR news/talk radio station achieved a ratings high this spring, ranking fourth among all Chicago stations in April with a 5.4 share, according to Nielsen.

Last month, WBEZ announced the layoffs of 12 employees — none in the newsroom. While the station draws most of its revenue from subscribers, a 33% decline in corporate sponsorships in the just-completed fiscal year took a sizable bite out its $30 million annual budget, interim CEO Edwards said.

Edwards said the layoffs would have been more farreaching without obtaining a $2.8 million PPP loan in April, he said.

“It was enormously helpful to us to keep our full team employed, to avoid layoffs and furloughs during the height of the pandemic, and helped with our cash flow significantly,” Edwards said.

Chicago TV stations saw local news ratings peak as the pandemic hit home in March, while advertising revenues fell about 30% to 40%, according to industry sources.

NBC-owned WMAQCh. 5 has avoided COVID-19 related layoffs or furloughs, in part through a voluntary buyout program for employees in June. About a half dozen employees took the buyout, according to a source familiar with the matter.

David Doebler, 58, president and general manager of NBC-owned WMAQCh. 5 since 2013, declined to comment on the buyouts.

Chicago-based Tribune Publishing, which owns the Chicago Tribune and other major daily newspapers, has implemented furloughs, targeted staff cuts and salary reductions to offset advertising declines.

In June, Tribune Publishing projected that total revenues during the second quarter would fall 30% to 32% year-over-year, mostly due to COVID 19-related losses. CEO Terry Jimenez said the pandemic accelerated the secular decline of print ad revenue.

“You’ve almost taken the next three years worth of declines and put it all within a three-month window,” said Jimenez, 48, a longtime Tribune Publishing executive who became CEO in February. “That has a fairly significant impact on the print business model.”

Pages views at the websites of Tribune Publishing newspapers were up 50% in March, as more readers sought local COVID-19 news and information. Jimenez said he hopes that trend will support a sustainable digital transformation.

Tribune Publishing has sought relief from landlords, vendors and cut other expenses. In the spring, the company reached an agreement with the Chicago Tribune Guild for a three-week furlough for employees making more than $40,000 a year. It also instituted furloughs for some non-union employees, while others received permanent pay cuts.

“The other alternative … is we’ve just got to slash the overall number of people doing the job on a permanent basis,” Jimenez said. “Our approach of furloughs for some, pay reductions for others, was an attempt to try to keep as many people in the newsroom for as long as we can.”

Tribune Publishing, which also owns the Baltimore Sun, Hartford Courant and Orlando Sentinel, among other newspapers, had about 4,100 full-time employees at the end of 2019, making it too large to qualify for a PPP loan.

Suburban Chicago newspaper chain 22nd Century Media didn’t last long enough to apply.

On March 31, just weeks after the statewide stay-athome order was issued, the company ceased operations amid a coronavirusspawned advertising drought. That decision ended a 15-year run for the hyperlocal publisher, whose 14 Chicago-area weeklies ranged from the North Shore to the southwest suburbs.

It also cost about 50 employees their jobs.

“It hit very hard because we had to give it our all for a couple of days to try to save the company, and a few days later, let everybody go over Zoom,” said Joe Coughlin, 37, the former publisher.

Coughlin and two former 22nd Century editors are launching a nonprofit hyperlocal news venture called The Record North Shore. The group is looking to raise $50,000 through a Kickstarter campaign, focusing on a New Trier edition as the inaugural coverage area.

Coughlin said the “thin margins” of 22nd Century’s traditional advertising-supported business model convinced him that a nonprofit platform was more sustainable.

As of Friday, the online campaign had raised more than $6,000. Coughlin said he hoped to have the news site up and running by September.

“Whether it was fair or not, we abandoned our readers at a crucial time, and left them without reliable local news,” Coughlin said. “But we have the opportunity to build something special and restore local news, one community at a time.”