The Lakers somehow received $4.6M intended for small businesses, but returned it

The Los Angeles Lakers became the latest in a string of major corporations to return money given to them by the Small Business Administration through the Paycheck Protection Program (PPP), which was included in the $2.2 trillion CARES act, passed in late March.

The PPP was designed to provide funds to small businesses who otherwise would have struggled to make payroll or retain employees due to financial pressures caused by closures due to coronavirus, particularly those lacking liquidity or easy access to alternate loan sources. However, it became evident that the vast majority of money earmarked for the PPP was not going to struggling small businesses. Instead much of the money was being directed to publicly traded corporations who were using the money as a slush fund to retain their market capitalization and stock prices during the economic downturn. The PPP gave these companies a taxpayer-secured line of credit to make payroll, insulating them from true hardship. Approximately $870 million went to publicly traded companies before the initial round of PPP funding ran out of money, according to CNBC.

Public outcry caused businesses like Shake Shack and Ruth’s Chris Steakhouse to return PPP money after it was revealed the corporations received $10 million and $20 million, respectively, while hundreds of small family-run restaurants and mom-and-pop businesses were being forced to close doors.

The Lakers told ESPN in a statement they had received $4.6M in PPP funds, but “repaid the loan so that financial support would be directed to those most in need,” when they became aware that money for the PPP had run out, leaving many small businesses in the lurch. By the letter of the law the Lakers, as an organization with less than 300 employees, technically fit the bill to receive stimulus money, though many are rightfully questioning whether the intention of the bill was to prop up companies like the Lakers, which were valued by Forbes at $4.4 billion earlier this year.

Public pressure is forcing multi-million and billion-dollar corporations to return funds appropriated for small businesses. It appears the Lakers wanted to get out in front of the issue before their application for funds became public, but there are still millions more in PPP cash that has gone to corporations which have no intention of returning the money while true small businesses face bankruptcy.