Letters to the Editor • Opinion
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The Lakers say they have repaid the money. (Chris Pizzello/AP)

One of the world’s most valuable sports franchises applied for and received $4.6 million from a federal loan program designed to help small businesses get through the novel coronavirus pandemic, which Treasury Secretary Steven Mnuchin called “outrageous.”

The Los Angeles Lakers, valued at approximately $4 billion, qualified because they have around 300 employees, falling below the program’s limit of 500.

“I never expected in a million years that the Los Angeles Lakers — which I’m a big fan of the team — but I’m not a big fan of the fact that they took a $4.6 million loan,” Mnuchin told CNBC’s “Squawk Box.” “I think that’s outrageous, and I’m glad they’ve returned it or they would have had liability.”

ESPN reported that the Lakers said they had returned the loan after news broke that the Small Business Administration’s Payroll Protection Program had run out of money, leaving many small businesses in dire straits. “The Lakers qualified for and received a loan under the Payroll Protection Program,” the team said in a statement. “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.”

In 2019, only seven pro sports franchises around the world were worth more than the Lakers, according to figures by Forbes. Their local television deal alone brings in $150 million annually. During the 2016-17 season in which the Lakers went 26-56, they still generated an NBA-best $115 million profit as measured by net income, even after paying almost $49 million in revenue sharing.

But the NBA and its teams are experiencing huge revenue losses after the season was suspended March 11. The outbreak could cost the league $1 billion and precipitate a record salary cap drop, The Washington Post’s Ben Golliver reported. USA Today reported this month that the Lakers planned to ask some of their top-level executives to voluntarily defer 20 percent of their salaries in hopes of retaining all of the team’s employees during the outbreak. The team has promised not to lay off or furlough any employees.

PPP loans are forgivable if the company that receives the money uses at least 75 percent of it to pay employee salaries and does not lay anyone off. Other highly valued companies applied for and received PPP loans, including Shake Shack ($10 million) and AutoNation (more than $77 million). Both also have said they will return the money. In all, more than $2 billion has been returned, the Small Business Administration said. At least $500 million of that figure went to large, publicly held companies, The Post has determined.

In response to criticism of the initial Payroll Protection Program issues, the government is rolling out an additional $310 billion in federally backed loans in a process that began Monday. That money also is expected to run out in a few days.

Mnuchin promised that loans of more than $2 million would be subject to added scrutiny.

“I want to be very clear it’s the borrowers who have criminal liability if they made this certification and it’s not true,” Mnuchin said. “We will make sure that what was the intent for taxpayers is fulfilled here.”

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