Lakers Return $4.6 Million Loan They Got for Coronavirus Relief
Written by SOURCE on April 28, 2020
The Los Angeles Lakers are giving back the roughly $4.6 million they got from the federal government, which was money that was granted to the organization as part of a program aimed at keeping small businesses going throughout the COVID-19 pandemic. If that sentence made you say “wait, what?” then you’ve correctly identified the reason they’re giving that money back.
The team announced this new plan in a statement it provided to ESPN on Monday.
“The Lakers qualified for and received a loan under the Payroll Protection Program,” they said to ESPN. “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.”
To clarify, the team was given the dough after applying through the Small Business Administration’s Paycheck Protection Program. The Lakers were approved for the first round of that program’s distributions, but there was an apparent change of heart after reports showed a bunch of large and deep-pocketed companies were getting cuts from the $349 billion pool. This happened while thousands of smaller businesses got nothing.
The program was launched on April 3, and allowed businesses to ask for/get loans so they could cover employees salaries. The loan is forgivable if the company that gets them spends 75 percent and doesn’t fire anybody. Because the Lakers only have 303 full and part-time people on the payroll, they were qualified to apply.
Unfortunately, after less than two weeks, the Payroll Protection Program allocated all their funds, leaving small businesses completely S.O.L. ESPN points out that loans were given to big-time companies who had good relationships with banks, and that those banks were able to make the application easier for those clients.
Understandably, that pissed a lot of people off. Outcry was considerable (looking your way Ruth’s Chris, Shake Shack, AutoNation, and whoever else) and companies who don’t want the bad P.R. are opting to return the funds.
Prior to the virus outbreak, the Lakers had an estimated value of somewhere around $4.4 billion. The virus hasn’t done anybody any favors, and that worth is a (possibly educated) guess, but one would think a month-and-a-half of no basketball hasn’t dented that reported valuation to a point where the team needs government monies to stay afloat.
As for more favorable news, the Lakers have publicly pledged to not lay anyone off, or fire employees. The team has also joined up with the Clippers and the NHL’s Los Angeles Kings to contribute to a fund giving financial support to people who work at the Stapes Center. In addition to that, their senior staff volunteered to slash 20 percent of their salaries back in early April.
A second round of PPP payments are set to begin on Monday, with new guidelines put in place to try and prevent wealthier businesses from getting their hands on those payments.
