NH Union Leader gets $1M loan through state program to pay pension debts

The New Hampshire Union Leader is in line to receive a $1 million loan from a state program, meant to help the newspaper pay down long-accrued pension expenses that are placing a severe burden on its balance sheet.

The New Hampshire Business Finance Authority, which was created by the state legislature to provide loans and other forms of financial help to businesses, approved the newspaper’s request earlier this week. The authority says it expects to close on the loan by the end of the year.

“This kind of legacy debt is unsurvivable for newspapers across the country,” Union Leader Publisher Brendan McQuaid said in an interview Tuesday.

Under the terms of the deal, the Union Leader will need to raise an additional $1 million in private equity and generate $750,000 in cash to be held as collateral. In return, the newspaper will receive a five-year loan with a 2% interest rate, which is far below the market rate.

McQuaid said without clearing the pension debt off its books, the paper could not survive long term, as it faces financial headwinds that have rocked media organizations around the country.

“It’s revenue,” said McQuaid. “Subscriptions have stayed pretty solid, but advertising has changed dramatically in the past 10-plus years.”

The newspaper will use the funds to pay down decades worth of pension obligations for both existing and now retired employees. Under the terms of the deal, none of the rank and file employees will see a reduction in benefits, while pension payouts for a handful of executives will be slashed by up to 65%.

In a written statement, the New Hampshire News Guild — a union representing approximately 40 of the paper’s journalists, ad sales representatives and circulation customer service employees — praised the approval of the loan.

“This deal appears to ensure that New Hampshire will continue to benefit from the award winning journalism, advertising and customer care that our members create on a daily basis,” the guild said.

The guild said it was calling on the paper to be transparent about its new private investors, and what role they may play in the company’s decision making.

The paper’s publisher didn’t respond to that request when reached Tuesday.

The Union Leader, like most legacy print publications, has watched its advertising and classified revenues plummet in the past two decades. McQuaid said its subscriber numbers have remained steady— with a circulation of approximately 20,000 on Sundays — but that the industry has changed too much to continue carrying the pension benefits from decades earlier.

James Key Wallace, the BFA’s executive director, said the loan was a sound investment in a community-minded institution.

“We’re excited to play a role in helping the Union Leader build a stable foundation for the future, which will not only benefit the publication but also ensure its employees can fully benefit from their hard-earned pensions,” Key Wallace said.

For decades, the Union Leader has served as the paper of record for New Hampshire, while also using its editorial pages to call for limited government and lower public spending.

McQuaid said he saw no hypocrisy in the paper now turning to the BFA, a state program, for a financial lifeline.

“This is not free money,” he said. “This is a loan that has to be paid back. And the BFA will be made whole at the end of this, and their goal is to keep employment in the state of New Hampshire. And we have 120 to 130 full time employees that will stay employed because of their process.”