I reported in this space yesterday that John J. Palumbo, long-time president and publisher of Rhode Island Monthly magazine, took out $525,000 in U.S. Small Business Administration-backed loans to purchase the magazine from the Providence Journal.
A ProJo story on the sale, which did not mention the loan amount or sales price, reported that the loans accounted for 90 percent of the sales price. And I noted that in my post. A discerning reader might do the math and surmise that Palumbo paid just over $580,000 for the magazine.
Palumbo, who could not be reached for comment earlier this week, called this morning to say that the ProJo story was inaccurate: the loans do not account for 90 percent of the purchase price. Rather, the SBA guarantees 90 percent of the loans.
And there were costs that the loan does not cover: Palumbo pointed to a down payment in excess of 10 percent of the purchase price (he declined to say how much in excess) and closing costs. He also inherits some liabilities as part of the deal. Thousands of subscribers who have already poured money into the Projo coffers for annual aubscriptions, for instance, will continue to receive issues on his dime.