City Lends Black Community Paper $100,000, Raising Ethical Questions

A rival outlet questioned how the weekly could maintain that its reporting on the city was unbiased.

Winston-Salem Journal
Winston-Salem Journal

City Lends Black Community Paper $100,000

The City Council of Winston-Salem, N.C., approved a $100,000 low-interest loan this week to the Chronicle, a weekly newspaper serving the city’s black community. A rival outlet questioned how the weekly could maintain that its reporting on the city was unbiased, and the publisher of the city’s daily declared, “The Winston-Salem Journal would never seek a loan from a government agency for any reason.”

The loan to the Chronicle, which says it has an audited circulation of 7,000, comes less than two weeks after the Boston Globe reported that the Bay State Banner, which serves that city’s African American community, had made only one payment on a pair of loans totaling $200,000 from an arm of the Boston Redevelopment Authority. Those loans were extended in 2009.

The Winston-Salem loan is not the first for the paper, which was founded in 1974. It received a city loan of $50,000 in 1984 that was repaid in full, Wesley Young reported Wednesday for the Winston-Salem Journal.

That the two papers receiving loans are African American points out the financial challenges faced by many of these outlets. In September, the National Newspaper Publishers Association, a trade association of black-press publishers, publicized a study from Nielsen that reported that while annual black spending is projected to rise from its current $1 trillion to $1.3 trillion by 2017, advertisers allot only 3 percent of their $2.2 billion yearly budget to media aimed at black audiences.

City Council members raised ethical concerns before they approved the loans on Tuesday, according to the Winston-Salem Journal.

“The newspaper plans to use the new loan to increase its sales staff and improve sales and circulation,” Young wrote. “According to the letter that the newspaper’s publisher, Ernie Pitt, wrote to the city in December, the money would be used to create three to five jobs at the newspaper. The average salary would be about $30,000.”

Pitt had written, “We have been on an austerity program for the last five years. However, with the improving economy and need for new positions it is necessary for us to have this infusion of new funds to keep up with and be an enhancement to a growing population.”

The story continued, “City council members had no problem approving the loan, saying that the newspaper, as a business, appeared to qualify for the loan.