Mercedes Dealerships Co-Owned By Nick Saban, One Of The Country’s Highest-Paid College…

A car dealership group part-owned by Alabama Crimson Tide head coach Nick Saban received between $5 million and $11 million in Paycheck Protection Program (PPP) loans in the past few months.

Records released by the U.S. Small Business Administration on Monday show that Dream Motor Group, which has dealerships in four states in the southern U.S., got loans of at least $5 million in April. Saban is a partner in Dream Motor Group, which is run by CEO Joe Agresti.

Agresti says that the loan money was used only for payroll purposes, and that it kept his and Saban’s 480 workers employed. They’ve also continued to pay the roughly 9% of high-risk employees who they instructed to stay home since the pandemic began, he says. Agresti adds he hasn’t taken a salary since March. Saban doesn’t take a salary but instead receives a percentage of profits, Agresti explains. Saban did not reply to a request for comment.

“I’m proud of the way we handled it,” Agresti says. “I don’t know that we would be bankrupt today [if we didn’t take the money]. But it would have been bad.”

Saban, who’s 68, is far from hurting for money. Under Saban’s current contract with the University of Alabama, which expires in 2025, he is being paid $75 million over eight years. His average contract value is $9.4 million annually. Saban was originally hired in 2007 under an eight-year, $32 million deal. 

In a 2008 cover story, Forbes called Saban the “Most Powerful Coach in Sports.” His six national championships are tied with Paul “Bear” Bryant for the most among college football coaches. In December 2019, he ranked eighth on Forbes’ list of the Highest-Paid Coaches in American Sports.

“It’s not really about Coach [Saban]. There are multiple partners in this thing,” Agresti says of his company’s decision to take the loan. “While Coach makes a pretty penny doing what he does, the rest of us don’t.”  

Saban grew up pumping gas and fixing flat tires at his father’s gas station in the mining town of Monongah, West Virginia. He told Forbes in 2008 that growing up, “I figured I would run a car dealership, that it was better to sell cars than to fix them up.” 

Sure enough, outside of sports, he’s built up a successful business operating car dealerships. In 2013, Saban approached Agresti, who already owned a Louisiana dealership, about owning a dealership together, according to Automotive News. That year, the existing Birmingham, Alabama Mercedes dealership, Crown Mercedes-Benz, sued Mercedes-Benz USA to stop Saban’s new dealership from opening, claiming that it violated its franchise agreement. Both Saban and Agresti were subpoenaed, but the suit was ultimately settled out of court a year later. The pair then purchased Crown Mercedes-Benz and Crown Infiniti in a 50-50 partnership, Automotive News reported. Agresti would not confirm Saban’s exact stake in the dealerships but says Saban is a part owner.

Dream Motor Group currently owns five Mercedes-Benz dealerships in Texas, Tennessee, Alabama and Louisiana and one Infiniti dealership in Hoover, Alabama, all of which are run by Agresti. Saban owns stakes in four out of the six dealerships — the Mercedes dealers in Nashville, Tennessee; Irondale, Alabama and Hoover, Alabama, as well as in the Hoover Infiniti dealership, Agresti says. The websites for each of Saban’s three Mercedes dealerships feature a dedication to his late father, Nick Saban, Sr. An advertisement on the YouTube page of Mercedes-Benz of Music City features Saban telling the story of his dad’s dream to one day own a car dealership.

Three of Dream Motor Group’s dealerships—in Louisiana, Tennessee and Texas—received $1 million to $2 million in loans. The Irondale, Alabama, dealership received between $2 million to $5 million, according to SBA data. At least 515 jobs were retained as a result of the loans, according to SBA data.

Dream Motor Group likely earns profits of between $20 million and $30 million annually, with annual revenues upward of $700 million, according to an industry expert, who does not want to be named. The expert estimated that the group sells about 10,000 cars a year at an average price of $70,000. 

Agresti declined to comment on these figures, saying, “Whatever we used to do doesn’t happen anymore, and we have no idea if it will ever come back.”

Before receiving the PPP loans, Agresti says he decided to transition his dealerships into selling masks to counter the dip in car sales. For the past few months, he has sold masks to sports teams, state governments, retailers and hospitals. He says the company has also donated 200,000 masks to local firefighters and police officers in the towns in which they operate.

Agresti says Dream Motor Group hasn’t applied for loan forgiveness yet, and isn’t sure if the dealerships will. “We will let the good Lord tell us what to do in the end,” he says.

The PPP loan program is intended to provide economic relief to small businesses adversely affected by the coronavirus. These are typically businesses that urgently need the money for payroll, rent and utilities, among other things. On its website, the Small Business Administration asks potential borrowers to certify in good faith that their PPP loan request is necessary. Specifically, it asks businesses to take into account their current business activity and their ability to access other sources of liquidity before applying.

After months of secrecy, the SBA and the U.S. Treasury Department announced on June 19 that they would disclose the names of businesses that received PPP loans between $150,000 and $10 million—accounting for nearly 75% of the loan dollars approved.

In the past few months, companies owned by high-net-worth individuals and publicly traded companies faced a backlash for taking PPP loans, as many smaller mom-and-pop shops were shut out of accessing the loans. Several public companies, such as Shake Shack and Ruth’s Hospitality group, operator of Ruth’s Chris Steak House, returned their PPP loans in April. 

GoDaddy billionaire Bob Parsons followed suit, receiving an $8 million loan in April, but returning it to the government one month later. In May, Parsons told Forbes, “There’s many other businesses that needed it more than we do, so we felt like it was only right to give it back.”

Disclosure: Forbes Media LLC was a recipient of a Paycheck Protection Program loan of $5 million to $10 million.