In early 2020 the global economy was impacted by COVID-19 which caused many states to institute lockdowns to restrict the spread of the virus (Maxouris, 2020). The sport industry was not immune to this impact, including the suspension of professional sports and the closing of fitness centers and gyms in many communities (Brooks, 2020). In order to help small businesses weather the economic impact that resulted from the shutdowns, the Payroll Protection Program (PPP) was launched to help provide small business with capital necessary to pay their employees and prevent small businesses from closing their doors. Those businesses that achieved funding were able to obtain loans at a small interest rate with deferred payments, as well as apply for loan forgiveness if the funds were used for eligible expenses and if certain employee criteria were met (SBA, 2020). There were several categories of funding available for small businesses with over 600,000 businesses receiving funding of over $150,000 according to the SBA PPP dataset.
Since the sport industry, and fitness centers were impacted, a smaller subset of the data was created to identify the sport related businesses that receive funding. The data was organized based on the North American Industry Classification System (NAICS), which was developed for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy (U.S. Census Bureau, 2020). The data also included other information including the number of employees the business reported, the location, organizational structure, and demographic of the owner, when completed. The sport industry is spread over several NAICS codes with category 71 broadly including Arts, Entertainment and Recreation (NAICS Association, 2018), however, other specific sport related industries are included in other classification systems, or included broadly (sport apparel and footwear is included in the broader category and excluded). A summary is presented of the NAICS, description of the category and number of businesses that received funding (Table 1).
Unsurprisingly, the fitness industry received the bulk of the funding that went to the sport industry with 1775 businesses receiving funding in excess of $150,000. One thousand amusement and recreational businesses received funding over $150,000 and 1540 golf clubs and country clubs received funding of more than $150,000. These three categories comprised 56% of the total sport related business that received PPP funding.
Additionally, we can look at the composition of the sport businesses that received PPP funds (Table 2). The majority category of funding was $150-350,000 ranging from a low of 52% in racetracks to a high of 74% in sport and recreation instruction. Most of the businesses were for profit, however 30% of the businesses that received PPP funds in the Promoters of performing arts, sports with facilities category were non-profit. The categories that have the largest employees was the fitness industry (138,268) and golf and country clubs (91,598). The businesses with the greatest average employment were racetracks (106) and amusement parks (95), with skiing facilities (91) and fitness (83) close behind. Many businesses did not report on gender or minority status of the owners, but those that report gender demonstrate little female owned businesses. None of the sport categories exceed 10% as being female owned and only Agents and managers and Sport and recreation instruction are in the high single digits (9%).
From this overview we can see that 7774 total businesses in the sport industry received PPP funding with the fitness sector, golf and country clubs and amusement and recreation comprising 56% of the businesses that received PPP dollars. The fitness industry is the dominant employer followed by golf and country clubs. This data was restricted to lending in excess of $150,000 and does not include funding below that level. It is not known how many more sport businesses received funding below $150,000. This data does let us see that the fitness center, although impacted, had the greatest number of businesses receiving PPP funding. While we can see funding level and number of businesses and jobs, we do not know how many other businesses applied for funding, received lower amounts of funding, or were not able to acquire funding and shuttered their doors.
Most of the businesses are for-profit operators with limited female ownership, which may be a result of not completing that section on the application. If representative, it continues to demonstrate a disparity in women owned businesses acquiring capital. Minority funding was difficult to determine since there was a lack of completed information on the ethnicity question. Compiling complete data would allow for greater transparency and understanding of the businesses in sport that receive PPP funding for operations and employment support.
A copy of the complete dataset complied the U.S. Treasury is available here
Brooks, K. J. (2020, March 17). As coronavirus spreads, gyms halt the workouts. CBSNews. Retrieved from https://www.cbsnews.com/news/fitness-clubs-and-gyms-are-closing-because-of-coronavirus/
Maxouris, C. (2020, March 18). These states have some of the most drastic restrictions to combat the spread of coronavirus. CNN. Retrieved from https://www.cnn.com/2020/03/17/us/states-measures-coronavirus-spread/index.html
NAICS Association. (2018). Six digit NAICS codes & titles. Retrieved from https://www.naics.com/six-digit-naics/?code=71
Payroll Protection Program. (2020). Small Business Association. Retrieved from https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
U.S. Census Bureau. (2020, February 26 updated). North American Industry Classification System. Retrieved from https://www.census.gov/eos/www/naics/
10/12/2022 03:11:15 am
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