Los Angeles Lakers get, return $4.6M small business loan

The Los Angeles Lakers are worth $3.7 billion. Even so, they applied for and received a $4.6 million loan from the U.S. government’s newly implemented Paycheck Protection Program.

The government implemented the program to help small businesses during the COVID-19 pandemic.

But that’s not the end of this bizarre story. The Lakers have returned the money to the federal government.

National Public Radio reported earlier this week that the Los Angeles Lakers are among the companies that have given the loan money back to the government.

“The decision to give back the money comes amid complaints that many large companies are wrongly accessing a federal loan program intended to help small businesses hurt by the coronavirus pandemic,” NPR’s Jim Zarroli wrote.

What is the PPP?

The Paycheck Protection Program earmarked $349 million for small businesses cope with the economic slowdown, but “money allotted to the program was gone within two weeks, and hundreds of thousands of small businesses were left out,” Zarroli reported.

To help remedy the situation, Congress OK’d another $320 million for small business loans. The funding is to commence on Monday.

Treasure Secretary rips Lakers

U.S. Treasure Secretary Steve Mnuchin confessed on CNBC’s Squawk Box” that he was not pleased that the Los Angeles Lakers requested a loan

“I’m not a big fan of the fact that they took a $4.6 million (loan),” Mnuchin said on Tuesday. “I think that’s outrageous.”

How did Lakers qualify for loan?

In examining what was required for a business to receive PPP funding, ESPN reported that the organization fit the bill with around 300 employees. “…The Lakers were eligible for a PPP loan, which is forgivable so long as the recipient spends 75 percent of the amount on payroll and doesn’t fire anyone.”

Lakers pay money back

Like the league’s other 29 teams, the Los Angeles Lakers aren’t receiving the normal steady flow of millions of dollars during the NBA shutdown. Ticket sales, merchandise, and local TV broadcast dates are among the factors affecting revenue.

That said, the Lakers decided returning the money was the right thing to do.

“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 team said in a statement.

CBS News reported that more than a dozen companies said they will pay back more than $170 million in loans.

Lakers’ financial clout

In 2019, Forbes listed the Los Angeles Lakers as the eighth-most valuable pro sports team. Nine NBA teams made the magazine’s top 50 list.

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