In an unsigned open letter published this week, the Bay State Banner said the Globe “impugned the integrity” of the weekly newspaper by revealing details of its default on a pair of loans from an arm of the Boston Redevelopment Authority and raising questions about the black-owned publication’s finances in the broader context of the newspaper industry’s struggles.
“Now it seems the Globe intends to be the first to write the Banner’s obituary with the strategy of defaming the publisher to ensure that the Banner’s demise ensues,” the Banner said in the letter.
Using documents obtained under the state public records law, the Globe detailed the history of the loans and the Banner’s finances in an article published Jan. 12. Melvin B. Miller, the Banner’s founder, publisher, and editor, did not respond to several requests for interviews and hung up on a reporter when he was finally reached prior to the story’s publication.
He did not respond to interview requests Wednesday and Thursday regarding the Banner’s open letter.
The Banner owes the city more than $280,000, including interest, on the two-year loans it received in 2009. To repay the debt, Miller is selling a second home used to secure the loans. The BRA expects the loans will be paid and is working on a new payment plan while the house is on the market, according to a BRA spokeswoman.
Founded in 1965, the Banner has a wide reach in Boston’s African-American community, claiming to have more than 180,000 weekly print and online readers. The newspaper said in the open letter published Jan. 22 that it sought loans totaling $200,000 after it “encountered financial difficulties with the onslaught of the recession and changing technological aspects of our industry.”
The Banner’s annual financial statements, supplied to the Boston Local Development Corp. as a condition of the loan, show the paper lost more than $400,000 between 2009 and 2012 before earning about $40,000 last year. The Banner’s advertising revenues dropped 17 percent to about $900,000 in 2013 from $1.1 million in 2009, according to those statements.
The Banner says the article incorrectly implied that the city’s operating budget was used to “finance the black press.” The Boston Local Development Corp. is a nonprofit administered by the BRA. Its programs are supported partly by public funds, according to the nonprofit’s tax returns.
The loans were approved in 19 days, faster than the 30 to 60 days the Boston Local Development Corp.’s website says it typically needs. The Banner said in its letter that the BRA “was able to recommend a favorable decision faster than normal” in part because the paper hired Boston-based Next Street Financial LLC to “analyze the problem and prepare a plan for recovery.”
Next Street also was supposed to secure private financing to recapitalize the Banner and repay the loans, Next Street’s president, Ronald Walker II, said in the loan application. That financing never materialized. Walker also declined to be interviewed for the Jan. 12 Globe article.
The Banner’s financial statements showed liabilities to Miller declined from 2008 to 2012, to less than $160,000 from about $369,000. The Globe reported that the Banner “cut its obligations to Miller substantially, although it’s unclear how they were reduced.”
The Banner said in its letter those liabilities were “improperly classified as personal because of the publisher’s guarantee of repayment. Therefore, it was entirely appropriate to transfer it to the corporate account.”Edward Mason can be reached at Edward@EdwardMason.net. Find on him on Twitter @EBMason.