Indianapolis-based Emmis Communications Corp. said Friday that it has no plans to return its $4.8 million Paycheck Protection Program loan, despite pressure by the Treasury Department on public companies to do so.
In a statement to IBJ, Emmis spokeswoman Kate Snedeker said the company—which employs 449, including 238 in Indianapolis—believes it meets the criteria to participate in the program.
“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,” the statement said.
“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.”
Public scrutiny of the $350 billion PPP program has intensified in recent days, with some lawmakers and policymakers complaining that funds intended to help small businesses cover payroll ended up in the hands of larger businesses.
The $350 billion program ran out of funds two weeks after it started accepting applications, leaving many small businesses empty-handed. The House on Thursday passed legislation providing an additional $310 billion. President Trump signed the measure Friday.
According to a tally by The Wall Street Journal, 150 public companies received nearly $600 million in PPP loans in the first round of funding. The loans are forgivable if the money goes to payroll, rent or utilities.
“The intent of this money was not for big, public companies that have access to capital,” Treasury Secretary Steven Mnuchin said at press briefing Tuesday.
The Small Business Administration issued an advisory Thursday implying that unless a PPP recipient can prove it was truly eligible for a loan, the money should be returned by May 7.
An IBJ analysis found three of the public companies receiving PPP loans are based in Indiana. The other two were the Terre Haute coal-mining company Hallador Energy, which received $10 million, and the Evansville-based sporting goods maker Escalade Inc., which collected $5.6 million.
Hallador and Escalade officials did not respond to requests for comment from IBJ.
Emmis—which owns Indianapolis Monthly magazine, radio stations, a dynamic-pricing company and a maker of sound-masking systems—is among central Indiana’s smallest public companies. In the nine months ending Nov. 30, it reported revenue of $29.3 million.
Some larger companies have been giving back their loans—including Shake Shack and the parent of the Ruth Chris Steak House chain.
Shake Shake CEO Randy Garutti said in a statement that when it applied for the loan, it wasn’t clear that the money would be gone before all applicants were approved.
“Many who need it most, haven’t gotten any assistance,” he said.
Shake Shake, which employs 8,000 workers at its 189 U.S. restaurants, said it has access to private financing options. The company was able to qualify because the PPP program covers any company with fewer than 500 workers in one location.