Lakers pay back $4.6 million received from coronavirus rescue loan program
The Lakers applied for and received a loan of about $4.6 million under the stimulus package that Congress passed in March, but the team says it returned the money to the federal government.
In a statement Monday, the Lakers said once they “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 the community.”
The Paycheck Protection Program, part of the $2.2-trillion stimulus package, was designed to help small businesses weather the COVID-19 pandemic. It included $349 billion in loans for businesses with fewer than 500 employees that would be forgivable if the businesses used at least 75% of the funds on payroll and also retained or quickly rehired their staff.
A Lakers representative declined to specify why the organization applied for the loan, which is intended to help small businesses with modest resources, instead referring to the team’s statement about returning the loan.
Most pro sports teams outside of Major League Baseball are thought to have fewer than 500 employees — including the Lakers, Clippers, Sparks, Kings, Ducks, Rams, Chargers, Galaxy and LAFC — which could potentially make them eligible for a PPP loan of up to $10 million that is distributed through commercial banks.
Asked Monday whether they had applied, the Chargers, Rams, Angels and Ducks said they had not. The Dodgers said they would “not discuss financial matters.” The Clippers, Sparks, Kings and Galaxy had no comment. LAFC did not respond.
There is no federal tracking system to verify who applied for or received loans.
The House voted last week to approve another half-trillion dollars to replenish the depleted program, as well as provide money for hospitals and testing. To qualify, a business must apply for the loan. A source said the Lakers have no plans to reapply for the second wave of funds.
The Lakers have long been one of the most valuable franchises in U.S. sports, with Forbes estimating the team’s value at close to $4 billion, but they have not been immune to financial downturns in the past. In the summer of 2011, the Lakers laid off several employees to prepare for the coming lockout.
During this pandemic, though, the Lakers have not furloughed or laid off any of their employees and don’t plan to do so despite lost revenue during suspension of play. They also committed funds, along with the Clippers, Kings and AEG, to pay Staples Center workers through the end of the regular season. Earlier this month, to help ease their financial burden, the Lakers asked their top executives to defer 20% of their pay until mid-December or the start of the 2020-21 season, whichever comes earlier.
The NBA suspended operations March 11 after Utah Jazz center Rudy Gobert tested positive for COVID-19. The regular season was set to end April 15, with the playoffs beginning three days later.
A handful of other NBA players are known to have tested positive, including Jazz guard Donovan Mitchell, Nets forward Kevin Durant and two Lakers players whose identities are unknown. Amid criticism for making tests available to players during a nationwide shortage of testing, the NBA lauded its players for revealing their positive tests in order to raise awareness.
NBA teams in states with relaxed or no stay-at-home orders will be allowed to open their facilities beginning May 1, but only for individual workouts.
In the weeks since play was suspended, Commissioner Adam Silver said more players have tested positive, but the announcements stopped for privacy reasons.
Silver also said on April 17 that the league did not know what protocols would be necessary in order to restart practices and games.
The league informed teams Monday of a target date of May 8 for reopening some team facilities where local governments allowed such a move. Los Angeles County’s stay-at-home order is set to expire May 15.
The league’s memo only applied to individual workouts at team facilities with certain restrictions, not group workouts and practices. It likely would take several weeks after practices resume before games, on which teams and players depend financially, can resume.
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