When LeBron James and Anthony Davis finished polishing off the Miami Heat in the NBA finals in October, it gave the Los Angeles Lakers the perfect ending to the strangest basketball season ever. It also made it that much easier to forget the embarrassment of a franchise worth $4 billion trying to nickel-and-time taxpayers and then returning the money during the pandemic.
It turns out, however, that NASCAR teams and other sports organizations had no reservations about taking the cash.
What is the Payroll Protection Program?
This thing that people were calling the coronavirus virus was barely a blip on the radar screen to most Americans in early February of 2020. A month later, the U.S. economy was brought to a screeching halt by mandatory shutdowns of businesses meant to keep citizens at home and not spreading the COVID-19 virus.
With money not coming in, businesses of all sizes began layoffs that led to a surge in unemployment. To keep the numbers from growing worse, the federal government announced the Paycheck Protection Program, which issued loans intended to allow small businesses to keep their workers on the payroll.
The stimulus program through the Small Business Administration was structured in a way that the low-interest loans would be forgiven if recipients put the money to use for eligible expenses – primarily the weekly payroll. In all, the federal government approved 5.2 million loans worth $659 billion.
The Los Angeles Lakers applied and received $4.6 million
Shortly after the money from the Payroll Protection Program started reaching U.S. small businesses in April, it was discovered that the Los Angeles Lakers applied for and received $4.6 million from the federal government. Given that Forbes says the Lakers are worth more than $4 billion and that ESPN reported that billionaires Philip Anschutz, Patrick Soon-Shiong, and Ed Roski Jr. are minority partners in the franchise controlled by the Buss family, criticism was swift.
Responding to the outrage, the Lakers announced that they were returning the money so that the government could distribute it to the intended recipients of the program – small businesses.
A survey at the time by HBO’s Real Sports With Bryant Gumbel showed that no other NBA or NFL team applied for assistance through the PPP plan. However, the show’s producers said 27 MLB or NHL teams declined to respond to the question.
By early summer, the Small Business Administration was releasing lists of businesses that had been granted PPP assistance. But the financial information was vague, with the money lumped into broad ranges, such as between $2 million and $5 million.
Pressed in court by news organizations demanding detailed information, the SBA finally released more detailed information this month on forgivable loans of $150,000 or more awarded to nearly 4,000 sports-related businesses.
The team getting the most money turned out to be a well-known one.
The sports industry landed at least $1.72 billion through the PPP
Sportico.com waded through hundreds of thousands of entries from the report on the Payroll Protection Program and found that 3,968 sports businesses received $1.72 billion to support 235,475 jobs during the COVID-19 pandemic. According to the website, only two recipients took the maximum loan amount of $10 million: The Youfit chain of fitness centers and the New York Racing Association, which runs thoroughbred racing at Aqueduct, Belmont, and Saratoga. Planet Fitness gyms received at least $26 million spread across six different franchise owners.
Businesses owned by well-known sports figures like Floyd Mayweather and Tom Brady also qualified for loans. Brady’s production company, TB12, Inc., received $960,855.
The most interesting data, however, relates to the pro sports teams that received money under the PPP. Although no NFL, NBA, NHL, or MLB teams received direct funding, Sportico determined that Lemieux Group, which holds Mario Lemieux’s stake in the NHL’s Pittsburgh Penguins, accepted $4.82 million.
In soccer, the Seattle Sounders, D.C. United, and Orlando City of MLS all took at least $1.7 million. Orlando’s sum was $2,194,200. The team reportedly is being sold for nearly 200 times that amount.
Which team got the most COVID-19 aid from the government?
The biggest recipient in team sports of Payroll Protection Program money is an outfit that casual observers might not think of as a team. Richard Childress’ NASCAR team, RCR Enterprises, accepted a loan of $6.33 million. RCR’s drivers include Austin Dillon and Tyler Reddick in the NASCAR Cup Series.
Like other racing organizations, however, the operation runs deeper than that. RCR also fields teams on NASCAR’s lesser circuits and runs a shop in North Carolina handling the complicated task of building its cars. RCR’s application to the Small Business Administration cited 334 jobs supported by the forgivable loan.
In fact, North Carolina-based NASCAR teams dotted the list of loan recipients. Chip Ganassi Racing got $3.96 million, Andretti Autosport $2.3 million, and Roush Fenway Racing $3.53 million. The parent company of the Boston Red Sox and the Liverpool soccer team owns half of Roush. Its valued is $6.6 billion as of late last year.
Interestingly, NASCAR’s biggest teams did not take loans. They included Hendrick Motorsports (driver Chase Elliott just won the NASCAR Cup Series title), Stewart-Haas Racing (Kevin Harvick and Clint Bowyer), Joe Gibbs Racing (Denny Hamlin, Kyle Busch), and Team Penske (Joey Logano, Brad Keselowski).