Sports franchises across the country could be getting some help from the federal government to keep hourly and low-salaried workers employed.
As part of the $2 trillion coronavirus relief bill, President Donald Trump signed on Friday, $350 billion is set aside for small business loans. The money can be used to help business owners cover salary, wages, and benefits, worth 250% of an employer’s monthly payroll, with a maximum loan of $10 million.
Sports franchises that have less than 500 employees are eligible, according to Dallas Mavericks owner Mark Cuban, who added the bill’s feature is “the right thing to do.”
Cuban discussed the stipulation at media company SportTechie’s State of the Industry 2020 event on Friday.
“You can go the bank and apply for this payroll protection loan, and they will loan you initially the amount of money for the average of your payroll over the last three months for all your employees making under $100,000,” Cuban said at the virtual conference. “That’s absolutely crazy, in a good way.”
According to the U.S. Small Business Administration website (sba.gov), which establishes guidelines for the loans, small businesses can apply for loans up to $5.5 million that can be used for “long-term fixed assets and operating capital.”
The plan also includes a tax credit for retaining employees, worth up to 50% of wages paid during the crisis, for businesses forced to suspend operations or that have seen gross receipts fall by 50% from the previous year.
Cuban said the bill’s option also helps cover utilities, rents, “plus some level of debt as long as that total is under $10 million” to smaller businesses, including major corporation franchises that have under 500 employees.
“It’s going to be interesting because there’s going to be a lot of sports teams that that applies to,” Cuban said. “The Mavs don’t have 500 employees. We have a lot of people making over $100,000, players….But for all those under $100,000, that’s going to be very helpful in keeping the hourly workers and lower-wage employees, keeping that going.”
According to an NBA source, some teams have already begun the process of determining eligibility for applying for the loan to help offset the cost of retaining employees.
Sports franchises across the country are attempting to keep workers while also avoiding the kind of backlash received by the Philadelphia 76ers when they recently requested “salaried employees to take a temporary 20% pay cut.” The move triggered a public relations storm so intense, billionaire owner Josh Harris reneged on the request and in a statement apologized for “getting this wrong.”
Cuban urged small business owners to apply for the loan, calling it “patriotic.”
Said Cuban: “We’re going to be a lot stronger as a nation if we keep people in their jobs rather than having to go through the unemployment process and then them, hopefully on the other side, trying to get a job.
“If you’re a small business, it’s patriotic to keep your people employed,” he added. “It’s patriotic to go and apply for this loan. And it’s patriotic if you keep them employed and applied for the loan, that you don’t have to pay it back.”
The NBA suspended its season on March 11 after Utah Jazz player Rudy Gobert tested positive for COVID-19, promoting the shutdown. Other leagues, including the National Hockey League and Major League Baseball, followed suit.
Source: Business - cnbc.com
