The Los Angeles Lakers qualified for and received about $4.6 million from the government's Paycheck Protection Program, which was established to provide relief to small businesses suffering during the coronavirus pandemic. The Lakers eventually returned the money.
The team, one of the most profitable franchises in the NBA, was able to secure a Small Business Administration loans during the first round of distributions. The $349 billion dedicated to the program was quickly depleted as companies of all sizes rushed to get loans.
"The Lakers qualified for a loan under the Payroll Protection Program but the team promptly decided to repay the funds," NBA spokesman Mike Bass said in a text message.
While many large and public companies received funding, hundreds of thousands of smaller businesses did not, despite being the intended recipients. After public scrutiny grew, many of the larger companies such as Ruth's Chris House, Shake Shack and Sweetgreen said they would return the money.
The PPP loans are primarily designed to help small businesses with fewer than 500 employees pay salaries and are forgivable if 75 percent of the money is used on payroll and no employees are let go. A portion of the loans can also be used to pay for expenses like mortgage or rent.
The Lakers have fewer than 500 employees and were thus able to qualify under the program's loose guidelines, despite being valued at more than $4 billion.
"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 team said in a statement. "The Lakers remain completely committed to supporting both our employees and our community."
A second round of PPP money was added Monday. But the SBA gave new guidance discouraging companies like the Lakers, which have access to capital from other sources, from applying.
The NBA expanded its own line of credit, which franchises can now draw from if they're in need of cash.
No other NBA teams received PPP funds, according to a source with knowledge of the situation who asked not to be named to discuss league business.
NFL spokesperson Brian McCarthy confirmed that no NFL teams applied for PPP funding.
With the NBA season suspended, teams risk losing millions in revenue from ticket sales and unfulfilled television commitments. The Lakers said they won't furlough employees and issued salary deferrals for the most senior employees.
