Powerhouse PR Firm 42West Took $725k in Small Business Loans
By Gene Maddaus
LOS ANGELES (Variety.com) – 42West, the powerhouse PR firm with clients including Tom Hanks and Meryl Streep, received a $725,200 small business loan under the Paycheck Protection Program, according to a securities filing.
The publicity agency — which also represents Martin Scorsese, Tom Cruise and Woody Allen — was acquired in 2017 by Dolphin Entertainment , in a deal that valued the firm at $28 million. Dolphin Entertainment also owns a stable of other entertainment marketing companies, including music PR firm Shore Fire Media and The Door, a branding and marketing firm.
The company, which is traded on the NASDAQ exchange, received a total of $2.1 million in PPP loans under the coronavirus relief bill, according to a filing on Monday. In addition to the $725,200 that went to 42West, The Door received $672,700. Shore Fire Media received $322,200. The parent company reported 2019 revenues of $25 million, and has 159 employees.
42West declined to comment on the loan. The company is believed to be the first Hollywood firm to disclose that it has received a PPP loan.
Numerous other public companies have received PPP loans, and some have faced pressure to give them back. The parent company of Ruth’s Chris steakhouse returned $20 million in PPP loans. Shake Shack returned a $10 million loan, and the Los Angeles Lakers acknowledged Monday that it had returned $4.6 million.
Last week, the Small Business Administration issued updated guidance suggesting that large public companies likely would not qualify for the loans.
“It is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification,” the agency said .
The loans carry an interest rate of 1% per year, and are due to mature in two years. However, the loans can be forgiven if the recipient shows that it has retained the bulk of its workforce.
On Tuesday, Treasury Secretary Steve Mnuchin said that all loans in excess of $2 million would be audited prior to forgiveness.
42West was ranked #4 on the Observer’s 2019 “PR Power 50” list .
