Minor league teams could be the largest beneficiary of the SBA’s loan program.getty images
Teams and sports properties are digging into the details of the $2 trillion coronavirus relief package recently passed by Congress as the pandemic takes its toll on the industry.
According to Irwin Kishner, executive chairman of Herrick Feinstein, teams and leagues with 500 or fewer employees can apply for relief in the form of a loan to help meet employee payroll, but the money is not to be used to make up for lost profits. The loans are part of the Small Business Administration’s Paycheck Protection Program created under the stimulus package.
“The idea is to avoid a situation where teams and employers have to lay off employees,” Kishner said. “In effect, the loans are for operating expenses, including payroll, and the trick here is that the loans can be forgivable. They become a grant if you don’t lay off employees.”
The program could be particularly beneficial for minor league teams and leagues that qualify as small businesses.
“The only lifeline out there right now has been the relief package — that’s going to really help our teams,” said Rick White, president of the Atlantic League, an unaffiliated short-season minor league baseball organization, which is reviewing the relief application. “I’d be surprised if any professional club in any league or any entity that calls itself a league didn’t apply for this. You have to meet their definition as a small business, but most any team or league should fit there. We think it could be of significant relief to the league, because it covers payroll. Also includes things like benefits, insurance, and other employee-related matters.”
White said his organization is still reviewing the details of the relief package. “The questions we still have are how far it extends into an organization. Does it include seasonal and part-time personnel? Does it include interns? Are club dues included? Not one of our clubs has applied, but all intend to.”
The loans represent at least some aid to minor league baseball teams shuttered by the coronavirus pandemic and many teams are looking at it, said Jeff Lantz, senior director of communications for Minor League Baseball. “It is something that can help with payroll. Our legal team is advising teams to take a look at it. We are a lot like theme parks and movie theaters; if people cannot attend, you are in trouble.”
Even some major league teams will look to see if they qualify for the fund as long as they have 500 employees or fewer on their payroll. But well-funded teams could also come into public criticism for taking relief money if it’s not used properly, said Marc Ganis, president of Sportscorp, a Chicago-based sports consultant.
An NBA team executive said some teams are at least investigating the aid package. “I would argue that sports and entertainment is affected in a very strong way, and the government offering means of relief is something that every team and arena operator will look at,” the executive said, adding that the funds are to be used to pay full- and part-time employees, not players.
