LA Lakers got near-$5 million federal small business loan
One of the richest National Basketball Association franchises got a $4.6 million loan from the federal Paycheck Protection Program but returned the funds, the team disclosed Monday.
The Los Angeles Lakers, which Forbes estimates is worth $4.4 billion, said it qualified for the loan, which is geared to small businesses with a maximum of 500 workers. The team didn’t specify what made the team eligible for the funds. Is the latest large organization to return the money allocated under the Small Business Administration program.
“Once we found out the funds from the program had been depleted, we repaid the loan so that financial support would be directed to those most in need,” the Lakers said in statement. “The Lakers remain completely committed to supporting both our employees and our community.”
Many small businesses have complained of being shut out of the coronavirus loan program, with an initial $349 billion round of funding being exhausted in less than two weeks before Congress authorized an additional $310 billion. At least 13 companies, including Autonation, the owner of Ruth’s Chris Steak House and Shake Shack, have announced they will refund a total of more than $170 million.
The club did not say how it had intended to use the Paycheck Protection Program loan. The Lakers committed last month to help pay wages for employees at the Staples Center, where the team plays its home games.
The PPP provides low-interest, government-backed loans to businesses that have been hurt by the recession caused by the virus. The loans, along with any interest, are forgiven as long as the business spends at least 75% of the loan money to retain workers.
The program, which launched April 3, was pitched by Congress and the Trump administration as small business aid, but loopholes made the program open to many companies that most people wouldn’t categorize as small businesses.
The NBA halted all its games in mid-March after two Utah players tested positive for COVID-19. Every franchise depends on ticket sales, and all 28 teams are losing money because they can’t sell food or merchandise inside their arenas. Teams are still on the hook to pay their athletes, most of whom carry multi-million salaries governed by contracts.
After league commissioner Adam Silver announced that the season would be halted, teams began exploring ways they could continue paying low-wage workers at their respective arenas. The Lakers — along with the Los Angeles Clippers and hockey team L.A. Kings — created a fund that will pay more than 2,800 Staples Center workers, including ushers, security officers, ticket sellers and merchandise staff.
The teams said in a joint statement the fund was created in “recognizing that the coronavirus is not just a health crisis but also an economic one.”
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