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Arizona Broadcasters,

We're starting to get a more clear picture of how Arizona radio and TV stations will benefit from the new COVID relief bill signed into law this past weekend by President Trump.

The opportunity for Arizona broadcasters is VERY NOTABLE in two ways:

1)  More Arizona broadcasters will be eligible for a FIRST round of forgivable PPP loan funding with no revenue loss requirement.

2) Struggling broadcasters who received forgivable PPP loans earlier this year will now be eligible for a SECOND round of funding.


Detailed below are more specifics about eligibility that expand upon my email from last week. As with previous PPP loan funding, the Small Business Administration (SBA) will be charged with implementing the new loan program, which will run until March 31, 2021. The SBA has 10 business days to release their guidance on the application process, effective from today's date. 

Until then, there is action you can take right now:

Any broadcaster who plans to apply for one of these loans should reach out to the banks they already do business with to ask if those banks plan to administer these new PPP loans. The SBA is likely to release a list of new partner lenders in the coming days as well. For reference, here's a list of current SBA-approved lenders.

You should also review the below guidelines to determine your eligibility ahead of the formal SBA guidance. In addition to what's listed below, the NAB has just released an easy-to-navigate web portal with all of this information.

NEW ELIGIBILITY FOR ARIZONA TV AND RADIO STATIONS:
  • Many Arizona broadcasters were ineligible for the first round of PPP loans because they were corporately owned and didn't meet the definition of a small business. The new COVID law fixes this problem for Arizona radio and TV stations, uniquely allowing broadcasters to instead tally employees by individual location to meet the law’s definition of a small business. These stations will be eligible for a first-round FORGIVABLE loan if they have fewer than 500 employees at their location AND certify that they will use these funds to support expenses for the production or distribution of locally focused or emergency information. There is no revenue loss requirement for these loans, and stations may qualify regardless of whether their ownership groups are publicly traded entities. The maximum loan amount across the entirety of a single ownership group will be $10 million, and there is NO revenue cap on station eligibility. These broadcasters may also be eligible for a second-round PPP loan, as detailed below.

SECOND ROUND OF ELIGIBILITY FOR SMALLER TV AND RADIO STATIONS:
  • For those Arizona radio and TV stations that were eligible for a first-round PPP loan earlier this year, the new COVID law provides for the POTENTIAL of a second forgivable loan. Broadcasters with 300 or fewer employees that can demonstrate a loss of 25% of gross receipts in any quarter during 2020 when compared to the same quarter in 2019 are eligible for this second round. These loans are capped at $2 million each. Publicly traded companies are ineligible for a second-round PPP loan.
     
FOR EVERY STATION THAT APPLIES FOR NEW PPP FORGIVABLE LOANS:
  • The maximum loan amount for any single broadcaster, even factoring in the above guidance, is 250% of their average monthly payroll expense (including insurance benefits). The amount eligible for forgiveness is the sum of those expenses as well as covered mortgage, rent and utility payments, operations expenditures, property damage costs, supplier costs and covered worker protection expenditures incurred during the covered period. Forgivable payroll and non-payroll costs must be allocated at a 60/40 rate, respectively. 
     
  • The new COVID law simplifies the forgiveness process for loans of $150,000 or less, including for those stations who received PPP loans before passage of this new COVID law. Loans will be forgiven if the borrower submits to their lender a certification that includes the number of employees retained thanks to the loan, the total estimated amount of the loan spent on payroll and the total amount of the loan. 
     
  • If you'd like to read the "raw" bill, here's the 5,593 page document in its full glory.
IN ADDITION TO THE PPP LOANS, THERE ARE TWO OTHER NOTABLE BENEFITS FOR ARIZONA BROADCASTERS:
  • Advertising Funds: We all know Arizona broadcasters have suffered major losses in advertising revenue in 2020. The new COVID law provides for a five-year, $75 million vaccine public awareness campaign managed by the Health and Human Services Department (HHS) that lists television and radio first amongst eligible mediums. These new dollars build on the existing funds and programming at HHS as well as language attached to Appropriations Committee bills, encouraging major federal agencies to prioritize local media in spending on public awareness advertising campaigns. Some of you have already received buys from HHS but a majority of Arizona radio and TV stations have not. The ABA is working with our partners at the NAB across Washington to change this dynamic as quickly as possible.
     
  • Tax Change Implications: There are several generally-applicable tax items in the COVID relief bill that are of interest to broadcasters. The first is with tax treatment of PPP loan proceeds. Congress has overridden the IRS and clarified that deductions are allowed for otherwise deductible expenses paid with the proceeds of a PPP loan that is forgiven, and that the tax basis and other attributes of the borrower’s assets will not be reduced as a result of the loan forgiveness. The provision is effective as of the date of enactment of the CARES Act. The second tax implication is an expansion of the refundable Employee Retention Tax Credit (ERTC). Beginning on January 1, 2021 and through June 30, 2021, the provision increases the 100-employee delineation for determining the relevant qualified wage base to employers with 500 or fewer employees; increases the limit on per-employee creditable wages from $10,000 for the year to $10,000 for each quarter; and expands eligibility for the credit by reducing the required year-over-year gross receipts decline from 50 percent to 20 percent.
I'll continue to share more information as I learn in. In the meantime, please continue to reach out with questions. There's no understating the significance of these federal support systems, and it's important to remember that everything outlined above has been built by the U.S. Congress specifically for local broadcasters. If you find yourself interacting with any member of Arizona's Congressional delegation in the coming days, please thank them.

Thanks all,
 
Chris
---------
Chris Kline
President and CEO, Arizona Broadcasters Association
602.252.4833 (office) | 602-790-7537 (cell)
555 N Central Avenue, Suite 302 | Phoenix, AZ 85004
chris@azbroadcasters.org


 
 
WHO ELSE SHOULD GET THESE EMAILS?
As our broadcasting world changes, it's more critical than ever that our Arizona broadcasters understand the changes and have access to information about our business. We hope this email group can serve as one small part of that process. Who else on your teams should get these ABA emails? Sign up here.
ABA 2021 RESOURCES AND SERVICES:
The ABA focus in 2021 is to develop services and programs that can help stations build their current businesses stronger alongside investing in more efforts that help futureproof Arizona’s broadcast industry.
 
What is the ABA, how is it funded, and who governs it?
2021 “PEP” request of member stations
2021 ABA Annual Dues Scale
2021 ABA Board of Directors
ABA Member Services To-Date
ABA Membership Stations To-Date
ABA Bylaws

ABA Codes of Conduct:
EthicsAnti-TrustConflict of InterestInternal FraudWhistleblower, Document RetentionFinancial

 
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