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Law360 (April 28, 2020, 3:31 PM EDT ) U.S. Treasury Secretary Steven Mnuchin blasted the NBA's Los Angeles Lakers on Tuesday for taking $4.6 million from the federal forgivable loan program meant to help small businesses pay workers during the coronavirus pandemic, though the team has returned the money amid criticism that deep-pocketed companies were gobbling up the funds.
The Staples Center, home of the Los Angeles Lakers, is shown on March 12 after the NBA suspended its season due to the coronavirus outbreak. (Getty)
"I never expected in a million years that the Los Angeles Lakers" would take a loan from the pool, Mnuchin said.
He said large companies that have taken loans from the Paycheck Protection Program could face "liability" and that the Small Business Administration would conduct a "full review" of all loans over $2 million before they will be eligible for forgiveness.
"The Lakers qualified for and received a loan under the Payroll Protection Program," the team said in a statement to Law360. "However, 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."
The Treasury Department last week told companies to think carefully about keeping loan money, as they were supposed to certify an economic need for the money. The department is giving companies two weeks to return the loan money without consequence.
The loan program was created to provide stop-gap financing to help small businesses avoid layoffs during the COVID-19 pandemic and is generally meant for firms with 500 or fewer employees. Eligibility rules include exceptions allowing some companies with larger overall workforces to participate.
A string of restaurant chains and other large companies have said they would return millions of dollars in PPP loans amid widespread criticism that high-powered brands and well-connected firms exhausted the program's initial $349 billion in funding.
The Lakers, owned by the Buss family and billionaire Philip Anschultz, are one of the NBA's premier franchises and one of the most valuable sports franchises in the world, valued at $4.4 billion by Forbes.
--Additional reporting by Jon Hill. Editing by Peter Rozovsky.
Update: This story has been updated with a comment from the Lakers.
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