$665M in PPP loans saves 36K jobs
Intersport received a Paycheck Protection Program loan in early April, which allowed the Chicago-based agency to limit furloughs, once the company went through the funds, to just six event specialists.
“Our intent is to bring them back as soon as the event business restarts,” said Intersport President Brian Graybill. “The money allowed us to keep our entire work force of 150 intact for the first 12 weeks after things got really ugly, which was a really important and crucial time for everybody. So, in our case, [the PPP loan] did exactly what it was intended to do.”
Intersport was one of the more than 600 sports organizations that received PPP loans, according to Sports Business Journal analysis of a recent release by the Small Business Administration detailing the nearly 5 million total loans made through the program. The estimated $665.9 million that went to the sports industry helped preserve roughly 36,000 jobs.
Ninety Minor League Baseball organizations received PPP loans, the most of any sports industry category, followed by youth sports (82), motorsports (65) and horse racing (45). Populous received the most PPP money in the sports industry, at least $5.7 million and at most $12 million based on ranges provided by the SBA. The loans helped the Kansas City-based architecture firm preserve 399 jobs total at three Populous-related companies.
The PPP program was part of The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which sought to undergird American businesses hit by the COVID-19 pandemic shutdown. The SBA administered the PPP program, though the loans were made by individual banks to eligible companies with 500 or fewer employees.
The data released by the SBA listed companies that were approved for loans and the date of approval but didn’t specify whether the company received the money, how much money it specifically received or how it spent the money. The massive spreadsheet also didn’t say whether the property kept the loan. The Ole Miss Athletics Foundation and Roger Federer’s Team8 Agency gave theirs back, for example.
The loans reached every corner of sports.
The Houston Livestock Show and Rodeo employs an average of 301 monthly employees February through June, as well as a large contingent of year-round, full-time staff for its massive annual event at NRG Stadium, according to a rodeo spokesperson. The organization was one of six sports entities that were approved for up to $10 million and one of 19 that protected 300-plus jobs.
USA Hockey (120 jobs preserved) and U.S. Ski & Snowboard (166) were both approved for up to $5 million, tops among the $34.2 million the NGB sector received. U.S. Ski & Snowboard specifically received $2.5 million, the most of any Olympic national governing body.
Ski & Snowboard CFO Brooke McAffee said most of that loan went to covering staff salaries and benefits, with the remainder being used for rent and utilities. Ski & Snowboard applied for the loan in mid-April, about a month after the organization had wiped the remainder of its event calendar clean. But the organization hasn’t had to implement furloughs because of the loan.
“It was just a really helpful point in time because we had to cancel so many domestic events and lost revenue from those events,” McAffee said.
Another large loan recipient was USA Swimming, which received $1.6 million. The delay of the Olympics to 2021 forced swimming to postpone its quadrennial Olympic Trials event, a major revenue generator. USA Swimming reported total event revenue of $4.6 million in 2016, the year of its most recent trials; in other years, event revenue is typically less than $1 million.
According to a USA Swimming spokesperson, in the final year of the Olympic cycle, “a surplus of revenue comes in the door that actually makes us even across our budgets for the quad.” The organization has enacted wide-ranging spending cuts, including a round of voluntary buyouts that took effect two weeks ago, but to date there have been no furloughs or layoffs.
“The PPP, for us, was very important to be able to keep our staff on board,” said the spokesperson. “It was definitely an important part of our fiscal restructuring and strategic budgeting for the next 18 months.”
The $60 million approved to protect 4,114 jobs in the horse-racing industry was second in sports jobs saved only to the 5,515 employees retained at least temporarily throughout MiLB.
The New York Racing Association was among the largest sports PPP program recipients, receiving between $5 million and $10 million. NYRA tracks account for 19,000 jobs and more than $3 billion in statewide economic impact, according to Patrick McKenna, NYRA communications director. McKenna said “this PPP loan allowed NYRA to continue training and stabling operations at Belmont Park, which was critically important to hundreds of small businesses and thousands of hourly workers during a period when live racing was suspended in New York state.’’
Del Mar Thoroughbred Club applied for and received a $2.8 million loan and helped many of the 250 people the San Diego-area track employs, said Josh Rubinstein, Del Mar president and COO. When the pandemic hit, Del Mar furloughed about 50% of its staff, while senior staff took salary reductions. Without fans on-site, Rubinstein projected Del Mar lost between $16 million and $17 million in track-wagering revenue, ticketing and parking. When the PPP loan came through, Del Mar was able to rehire its furloughed employees. He said all of the money is going to employee payroll and benefits.
“The PPP loan has been a lifesaver for us,” Rubinstein said.
Forty-five percent of the $26.95 million approved for college athletic departments and conferences went to three programs: Army, Navy ($5 million each) and Air Force ($2 million). College conferences, for the most part, used the money to cover essentials. Conference USA and the Northeast Conference identified salaries, standard benefits and rent as some of the basics that the PPP loan helped cover.
Conference USA said its loan was less than $400,000, while the Northeast Conference borrowed less than $200,000, according to Commissioner Noreen Morris in an email to SBJ.
“The loan allowed us to maintain our staff and continue to provide membership services without interruption,” Morris wrote. “We used the loan primarily to cover salary and benefits for the staff, and the remainder helped cover operational costs, including rent and utilities” for the Somerset, N.J.- based office.
The National Women’s Soccer League, whose modified 2020 season is underway outside Salt Lake City, received between $1 million and $2 million. A league spokesperson said that 100% of the amount received was used to pay 200-plus player salaries. None of the money went to front office staff.
“The loan was absolutely critical to the league weathering a challenging period,” the spokesperson said.
Staff writers Mark J. Burns, Ben Fischer, Terry Lefton, Liz Mullen, Chris Smith and Michael Smith contributed to this report.