The Los Angeles Lakers has repaid a $4.6 million coronavirus relief loan the professional basketball organization received as part of the federal government’s Paycheck Protection Program.
“The Lakers qualified for and received a loan under the Payroll Protection Program,” a Lakers spokesperson wrote in a statement emailed to CNN Business. “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 Lakers — the second-most valuable NBA team with a $4.4 billion valuation, according to Forbes — is the latest big-name entity to obtain and subsequently return money touted as a Covid-19 relief measure for small businesses. The news was first reported by ESPN.
The highly trumpeted PPP effort has come under scrutiny following reports that large businesses, including publicly traded companies, received high-value loans. The $349 billion in funding, which was quickly depleted, was intended to help small businesses. Following public scrutiny, businesses such as Shake Shack (SHAK), Ruth’s Hospitality (RUTH) and Kura (KRUS) Sushi said they would return their multimillion-dollar loans.
Late last week, Treasury issued guidance intended to prevent large entities — especially those with other means of securing funding — from receiving the loans. Companies that cannot, “in good faith,” prove that the loan is necessary for their business after fully taking into account their liquidity and operations were asked to repay the loans by May 7, 2020.
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The Lakers organization qualified for the $4.6 million PPP loan because it has 303 full- and part-time employees, a source with knowledge of the situation told CNN. The source also said the company has not and is not planning to furlough or lay off any employees and that the Lakers’ top executives agreed to defer 20% of their salaries to ensure other employees could be paid.
The Lakers have contributed to a fund along with the Los Angeles Clippers and Los Angeles Kings to provide financial support to employees of Staples Center.
Any loans returned or repaid will go back into the program for future disbursement, an SBA spokesperson told CNN Business last week.
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