We write to inform you that we elected to accept $289,881 from the federal Paycheck Protection Plan (PPP) loan program. The amount was based on a federally prescribed calculation that multiplies our average monthly payroll costs (and a few other qualifying expenses) by 2.5.
We sought and accepted the maximum amount we were qualified to receive. The loan roughly provides our team with 2 ½ months of security in a time of stark uncertainty.
Like many news organizations that accepted this funding, we believe we are the exact type of business the program was intended to help. The reasons that forced us to accept this small business loan are important to share in the spirit of transparency to our community.
Snopes is far from the only publisher tapping into this resource, as several news organizations and venture-backed media companies have accepted PPP loans. We aim to explain why we applied for the funds, what challenges we still face, and what assurances the money provides us at this time.
High Demand Doesn’t Bring Certainty
Despite record readership, we are experiencing a considerable decrease in advertising revenue that we could not anticipate. With the economy in crisis, our burgeoning membership model that relies on the generosity of our community faces an uncertain future.
Last year, we launched our Founding Member campaign to “Supercharge Snopes for 2020” in anticipation of our obligations during the 2020 presidential election. From then into the early part of this year, we’ve invested every contribution we’ve received — and more — into building the kind of newsroom that our readers and staff deserve.
The generous support we’ve received so far has helped us begin development on several projects and hire key talent to fulfill specific promises we’ve made. We’ve selected these projects because we’re betting a bigger and better Snopes will serve our readers and fulfill our mission sustainably. We take these existing commitments to our readers and mission very seriously.
We are making considerable progress, but the events of recent weeks have been especially trying for our company as we deal with the dizzying effects of the pandemic, personally and professionally. The deadline for several projects, including our membership account system, has been extended numerous times, but fortunately, no projects have been canceled.
It would cost us everything to abandon our roadmap. Accepting the PPP loan means we do not have to surrender our future to survive today.
Litigation Continues to Harm Us
For the past three years, we have been hobbled by an ongoing legal battle with Proper Media and its owners that has consistently drained our operating budget. And the battle doesn’t look like it will end anytime soon.
The interference even bled into the application for the PPP loan itself. Applying for this loan meant we’d need approval from our board of directors. But a board member who is also one of the parties engaged in litigation against us, Proper Media and Salon.com CEO Chris Richmond, tried to prevent us from getting access to these emergency funds by voting — without explanation — against it. Fortunately, our other directors outvoted him.
Although taking advantage of this loan program demanded rapidity and coordination, Richmond insisted on holding an unnecessary board meeting just to vote “no.” Fortunately, even though we missed out on the initial application process, we received a loan from the second round of funding appropriated by Congress. But Richmond’s actions could have deprived us of this opportunity altogether.
The vote against our PPP application is one of many actions taken by Richmond as a shareholder and director that Snopes’ management views as intended to beleaguer and undermine the company, rather than to help it.
Beyond hamstringing our budget, the lawsuit has had other deleterious effects on the company, as evidenced by our interactions with could-be investors and potential partners. As long as active litigation persists, many business opportunities remain out of our reach due to the uncertainty that litigation generates.
We’re Fighting for a Sustainable Relationship with Platforms
In February 2019, we announced our departure from Facebook’s fact-checking partnership. Since then, we’ve emphatically spoken out about how the fact-checking industry is under-appreciated and underfunded.
Accessing emergency funding, like a PPP loan, wouldn’t have been needed if big platforms such as Facebook and Google appreciated the value of fact-checking enough to enter into transparent and scalable licensing agreements.
Unfortunately, expecting adequate and equitable compensation from the platforms serving as the primary conduits for the misinformation encroaching on our real lives is an ongoing lesson in futility. We hope all publishers will use this as an opportunity to think deeply about the platforms that continue to plunder our hard work and profit handsomely.
We still believe there is hope for an uncompromising relationship between professional fact-checking organizations and platforms. Otherwise, we risk that independent fact-checking will die of attrition, killed off by the very platforms who have created the greatest need for it.
The Future of Snopes
Despite myriad setbacks and unforeseen circumstances, we’ve experienced a flurry of recognition in the past few weeks. From interviews with PBS and the Washington Post to shout-outs on Jeopardy! and Desus & Mero, we’re thrilled that our work feels relevant, timely, and even entertaining.
We believe nothing is incompatible with having a positive outlook for the future of Snopes and celebrating our incredible success as a team while also being deeply concerned about the fate of our organization as a result of this pandemic.
For a team working hard to secure the stability we need to succeed, this loan is a windfall of hope. With it, we believe we can continue to bring you the facts you need both during this crisis and beyond.