On April 27, the NBA reported on its website that the Los Angeles Lakers return the $4.6 million they received from the stimulus loan program. The program was meant for small businesses but was depleted by large businesses like Shake Shack.
The Lakers are worth $4.6 billion according to Forbes in a February report by azcentral.com.
Small Businesses, often consider to be the heart of the economy, were not able to receive the loan they desperately need because of corporations like the Lakers and Shake Shack being able to draw upon the package.
To note, as of the writing, it appears the Lakers were the only NBA team to apply for the loan. The Lakers organization is one of the biggest markets in the NBA. In 2019 their operating income was $178 million dollars. They average around $54 in revenue per fan. They spend $120 million on player expenses. Their revenue is 434 million. They are also sponsored by the likes of American Express, Delta Airlines, Nike, Staples, Toyota, and Verizon Wireless, amongst others.
Although the Covid-19 pandemic is affecting every company, especially those of the entertainment variety like the NBA. The Lakers is an organization that doesn’t need to take part in a small business loan program.
However, the Lakers issued a statement on Monday, saying that they qualified for and received the loan under the Payroll Protection Program. When they heard the funds were depleted, they felt the financial support would be directed to those most in need.
According to NBA.com, the Treasury Department issued further guidance for the loan program, asking larger companies not to apply if they don’t need the money for survival.
One of the reasons the Lakers qualified is because they only have 300 employees, but are the NBA’s second most valuable franchise. No one has been fired at the time of this writing.
For more on the story, visit the NBA website.