At a time when businesses are suffering due to the effects of the coronavirus pandemic, the government set up a program for small businesses to acquire a loan to help them stay in business. The Los Angeles Lakers, with a net worth, according to Forbes, of $4.4 billion as of February, applied and received a loan of $4.6 million from the government. The NBA team has returned the funds due to outrage that a company such as theirs would even receive such a loan according to a statement from the NBA.
Many businesses were unable to receive funds due to the depletion of monies. The Lakers had applied for the loan under the Small Business Administration’s Paycheck Protection Program, which they felt they qualified for as a small business. The program was a part of the federal government’s $2.2 trillion stimulus package. The Lakers’ initial request was granted in the first round of distribution, but the fund ran out of money in less than two weeks. The team then decided to return the loan given to them after reports that companies such as Shake Shack and AutoNation had also been granted loans.
“The Lakers qualified for and received a loan under the Payroll Protection Program,” the Lakers said in a written statement. “However, 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 remain completely committed to supporting both our employees and our community.”
The Treasury Department has since issued further guidance for the loan program last week, asking companies not to apply for the funds if they don’t need the cash to survive. With a valuation of over $4 billion, the Los Angeles Lakers aren’t in danger of going out of business.
The Lakers qualified for the program because they have only about 300 employees, even though the team is thought to be the NBA’s second-most valuable franchise. The Lakers haven’t furloughed or fired any employees during the coronavirus pandemic, and have no plans to do so. The team’s top executives agreed to defer 20% of their salaries until later this year or early next year.