Malibu Entertainment, a company linked to TIDAL reportedly applied for and received a Paycheck Protection Program (PPP) loan—money set aside in the CARES Act to help small businesses affected by the pandemic—for about $2.1 million, according to a source via Variety. The company was apparently among the businesses that applied for the loans, which were between $2 million and $5 million, according to Small Business Administration and Treasury Department documents.
In addition to that, TIDAL and Roc Nation reportedly laid off, furloughed or cut salaries 10-20 percent across as much as half of the company in March, shortly before the loan was approved on April 7. Apparently, TIDAL and Roc Nation’s big moneymakers—music touring and sports—had understandably halted due to the pandemic and the subsequent lockdown, so the company downsized quickly. Further, a source told Variety that 15 furloughed TIDAL employees were laid off just last week.
As far as exactly how Malibu is connected to TIDAL, Variety broke it down:
While Malibu is technically a separate company—a Black-owned motion picture and video production business based in New York with 95 jobs supported, according to the SBA document—it is part of the Tidal infrastructure. It shares the two most recent addresses with both companies; a 2017 lawsuit alleged that Roc Nation, Tidal, Malibu Entertainment and Tidal parent Aspiro are essentially the same company (although the lawsuit was dismissed without a clear ruling on the matter); in 2017 Malibu submitted for H1B visas for graphic designers providing as a contact for Joseph Borrino, CFO of Roc Nation at the time, who used a Tidal.com email address; and several Tidal employees tell Variety that their paychecks come from Malibu Entertainment.
As The Root previously reported, Black and Latino businesses have been disproportionately denied access to PPP loans, while large, publicly traded companies and even members of Congress have benefited from the program.
The recent report about TIDAL is just another tick in the column of other billionaires and wealthy businesses who have received the loans, including Kanye West’s Yeezy company.
On Friday, the NAACP announced it will be partnering with Beyoncé’s BeyGOOD and its Black-Owned Small Business Impact Fund to administer a program assisting small businesses that have been impacted and challenged by the effects of the pandemic. The fund will include $10,000 grants that will be offered to Black-owned small businesses in select cities.
The Root has reached out to TIDAL for comment in regard to the reports on the PPP loan to Malibu Entertainment and the layoffs. We are awaiting their response.
Updated: 07/10/2020, 1:13 p.m. ET: A source with information regarding the situation has confirmed and clarified to The Root that there were recent layoffs at TIDAL, but they were not connected to the received PPP loan.