Los Angeles Lakers Received and Returned Their Coronavirus Loan w instructions to give it to laker fans only @ nassau otb
The NBA team says it qualified for stimulus relief from the Paycheck Protection Program but repaid the funds amid outcry that small businesses were shut out
The Lakers, valued at more than $4 billion, were the only NBA team that received a government loan.
PHOTO: RINGO CHIU/ZUMA PRESS
The Los Angeles Lakers received and then returned a loan from the federal government’s Paycheck Protection Program for small businesses, the team said, as one of the league’s richest teams joined dozens of prominent American companies in returning stimulus money for coronavirus relief.
With hundreds of employees other than LeBron James and Anthony Davis, the Lakers applied for a loan from the Small Business Administration’s program. But the franchise, valued at more than $4 billion, says it returned the money amid the public uproar over the messy rollout as major brands were given millions of dollars while local mom-and-pop shops were shut out.
The government’s pool of $350 billion to help small businesses went dry in the first two weeks as companies across the country raced for help covering payroll instead of firing employees during the pandemic.
“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 team said in a statement Monday.
The Lakers receiving and returning a $4.6 million loan was first reported by ESPN.
Most of the companies that have pledged to reject their PPP loans after the fund’s exhaustion received more money than the Lakers. AutoNation Inc., the nation’s largest car-dealership chain, received $77 million. The companies behind restaurant chains Shake Shack, Ruth’s Chris Steak House and Potbelly Sandwich Shop returned $40 million in loans. The pharmaceutical manufacturerOptiNose Inc. also said that it would give back $4.4 million.
The Small Business Administration has reported an average loan size of $206,000, which means the 13 public companies that have returned $170 million could pay for more than 800 loans, according to a Wall Street Journal analysis.
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The Lakers were the only NBA team that received a government loan, a person familiar with the matter said.
The disclosure of the Lakers seeking payroll relief comes more than six weeks after the suspension of the NBA season and the shutdown of American sports. As one of the league’s best and most profitable teams, they would suffer financially if the rest of the season is canceled or the playoffs are moved to a neutral site, potentially costing the Lakers tens of millions of dollars in ticket revenue.
While they have access to credit markets other than the federal government, the economic health of teams was a significant topic of conversation at the NBA’s board meeting earlier this month, said league commissioner Adam Silver.
“Our revenue in essence has dropped to zero,” Silver said. “That’s having a huge financial impact on the team business and the arena business.”
Write to Ben Cohen at ben.cohen@wsj.com
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