State offers Claremont paper a loan guarantee
In a controversial move that has been met with opposition from politicians and community members, the state of New Hampshire has granted the Eagle Times newspaper of Claremont, N.H., a loan guarantee to help keep the publication in production.
The loan guarantee will not compromise the newspaper's coverage, New Hampshire Business Finance Authority senior credit officer Michael Donahue affirmed in an interview with The Dartmouth. The BFA will be administering the loan.
The New Hampshire Executive Council, which considers recommendations from the BFA's credit committee, agreed Wednesday to guarantee 75 percent of the Eagle Times' $250,000 line of credit, according to BFA executive director Jack Donovan.
The Eagle Times reopened under a new publisher, Harry Hartman, last month after having declared bankruptcy in July. Hartman declined to comment for this article.
The Eagle Times reported in its Thursday edition that the credit line is intended as a back-up measure and has not yet been drawn upon.
"It was approved purely on the basis of the business," Donovan told The Dartmouth. "There was a risk of less than $10,000 per job created, making it a good effort."
The BFA, which was created in the 1990s to provide loan guarantees to state businesses, faces no restrictions on the types of businesses it can serve, Donahue said.
The Eagle Times meets the necessary criteria, as its revenue would stimulate the area's economy, and the revival of the newspaper would save about 26 jobs, Donahue said.
The Valley News cited the potential conflict of interest and the lack of precedent for the arrangement in an article on Sunday.
"The heart of it is that [the Eagle Times] is a new competitor for the Valley News," Donovan said.
Valley News editor Jeffrey Good told The Dartmouth that the newspaper is simply reporting the story and will let readers decide for themselves whether to support the government's actions.
"Well, [former Claremont City Councilor] Jim Sullivan said it raises an obvious red flag," Good said. "This is a news story. We're not asserting one way or another how people should judge this transaction. I trust the readers to make their own judgments on that."
Sullivan, in an interview with The Dartmouth, said that he doubted the wisdom of the Executive Council's decision. He noted, however, that the Eagle Times has been unable to acquire any conventional loans.
Although the Eagle Times wrote Thursday that its coverage would be unaffected by the loan, Sullivan said that the newspaper has misrepresented the town deficit and favored figures like former New Hampshire Republican National Committeewoman Nancy Merrill.
"I think they are spinning the news a little bit and keeping things from their readers," Sullivan said. "How do we know they're not going to need another infusion later? Papers need to be free. They need to be able to investigate and be objective."
Columbia University journalism professor Todd Gitlin, chair of the sociology department, said the potential bias resulting from the arrangement merits scrutiny.
"It's not an automatic invitation to tyranny." Gitlin said in an interview with The Dartmouth. "There always need to be safeguards that insulate a media organization from its financiers. A newspaper is performing a public service by giving people news by which to govern themselves. If the only way to do it is for public funds to come forward, then I take that to be a governmental subsidy for a necessary public function."