LOS ANGELES - The Los Angeles Lakers said Monday they have returned a $4.6 million loan received under the federal government’s Paycheck Protection Program, an initiative meant to help cash-strapped small businesses weather the financial effects of the coronavirus pandemic.
The Lakers are the latest of several larger businesses opting to return the funds after the Small Business Administration hit its initial $349 billion lending limit in less than two weeks. Many small businesses in need of financial relief did not receive their loans before the money ran out.
"The Lakers qualified for and received a loan under the Payroll Protection Program," the Lakers said in a statement 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."
Larger businesses and institutions drew criticism for receiving financial relief meant for smaller companies. Aside from the Lakers, major chains such as Shake Shack, PotBelly and Ruth’s Chris Steak House returned money received under PPP following a public backlash.
The application process for the second round of PPP funds began Monday. The Trump administration is discouraging larger companies from pursuing loans. Publicly traded firms who received PPP funds were asked to return them by May 7 without penalty.
The Lakers are the NBA’s second most valuable franchise, with an estimated worth of $4.4 billion, according to Forbes. The franchise earned an estimated $434 million in revenue for the 12 months ending in February 2020.
Top Lakers executives agreed to take 20 percent salary deferrals in April. The franchise has vowed not to conduct layoffs and joined with other local professional teams to create a $5 million fund to support hourly stadium employees.
NBA franchises have lost tens of millions of dollars in expected revenue after the league was forced to suspend its 2019-20 season due to the pandemic. It’s unclear if or when the NBA will be able to resume its games.
The league will withhold 15 percent of player salaries beginning on May 15 as a check against the financial uncertainty. The money will be returned if the NBA is able to complete its full 82-game season without cancellations.