The Legal and Bussines Aspet of Career Ending Disability Insurance Policies in Professional and College Sports

Elite athletic competition carries with it an unavoidably high risk of injury and disability. As a result it has become commonplace and good business practice that the participating athletes and/or their contracts be covered by disability insurance policies. Although the professional sports industry still pales in comparison to that of other non-sports businesses, combined revenues for the NFL, MLB, NBA and the NHL were almost $20 billion in 2009. Roughly 50% of all those revenues end up as player salaries. Consequently many of the interested parties, including teams, athletes, leagues, unions, agents and more have a vested interest in obtaining different types of disability insurance policies on or for the athlete. In college athletics, disability insurance policies provide a valuable peace of mind to student-athletes with professional potential. In part to help keep student-athletes in college, the NCAA and its member-institutions administer an Exceptional Student-Athlete Disability Insurance (ESDI) program. Insurance policies have three main components: the coverage amount, the term of the contract and the premium amount. The components of an insurance policy depend in large part on statistical analysis to help determine the insurer’s level of risk and the necessary premiums to offset that risk. The relatively high risk of injury and the often millions of dollars at stake have made disability insurance policies in sports more complex and riskier. In particular, payout of athlete disability insurance policies often depends on whether the athlete suffered a career-ending injury, a term open for debate. As a result, the sports insurance industry has some particularly unique policies, including those based on loss of value and loss of draft position. Almost all disability insurance policies direct any disputes to confidential arbitration. As a result, there has been minimal litigation and minimal public information available about athlete disability insurance policies. Some of the issues that due arise in athlete disability insurance disputes include misrepresentation by the athlete, pre-existing conditions, statutes of limitations, the definition of a career-ending injury and returning after a career-ending injury. It is important for anyone working in the sports industry to have a good, overall understanding on how insurance works, the process and the options. Insurance in the sports industry is relatively new, and has changed and evolved considerably throughout its short history. It is important for people in the industry to keep up with developments as changes will be made to address market conditions, to address the needs of athletes, teams and leagues, to address changes in medical issues and rehabilitation and return from injuries and litigation decisions

Understanding the Evolution of Signing Bonuses and Guaranteed Money in the National Football League for the 2011 Collective Bargaining Negotiaions

After significant labor strife and multiple work stoppages through the 1980s and early 1990s, the National Football League and the National Football League Players Association (NFLPA) negotiating a landmark collective bargaining agreement (CBA) 1993. That CBA, extended and slightly modified four times since, established many of the rules and systems that govern the league today. The NFL has a very unique compensation structure, due in large part to its “hard” salary cap. Due to the fact that most NFL compensation is not guaranteed, players and their agents and union have continuously fought to obtain more guaranteed money, often in the form of signing and other bonuses that may be paid when or shortly after the contract is signed. Nearly all of these bonuses are subject to “forfeiture” clauses in their contracts requiring return of certain portions of the bonus should the player “default.” Most defaults have occurred when a player has refused to attend training camp, has committed conduct detrimental to the team or league or has retired. Consequently, many teams have sought, through internal grievance procedures as well as the United States court system, to have portions of the previously paid bonus money returned. The meaning of the term “signing bonus” itself is an issue of debate. Teams’ attempts to recover portions of bonuses have been met with fierce resistance in both arbitration and the courts and the players have prevailed, sometimes unexpectedly, more often than not. As the league is threatened with its first work stoppage in over 20 years, the amount of bonuses and the teams’ rights with respect to previously paid bonus amounts is a significant issue of contention. This article will examine the history of compensation, signing bonuses and bonus forfeitures in the NFL, while offering a potential solution to the problem via collective bargaining

The Qualifications, Demographics, and Characteristics of a Major League Baseball General Manager

The 2008 World Series between the Philadelphia Phillies and Tampa Bay Rays was a study in contrast for the two teams’ front offices. The eventual champion Phillies were led by General Manager (GM) Pat Gillick, who had 45 years of experience in Major League Baseball (MLB) front offices. Gillick, 71, had previously been General Manager of the Toronto Blue Jays, Baltimore Orioles and Seattle Mariners after having broken into the industry in the scouting departments of the Houston Colt .45s and Astros and New York Yankees. The Phillies victory was Gillick’s third World Series title as a GM, having guided the Blue Jays to championships in 1992 and 1993. In his 27 years a GM, Gillick’s teams made the playoffs 11 times. On the other hand, the Rays GM was 31-year old Andrew Friedman, who was only in his fifth year in MLB. Like Gillick, Friedman played college baseball. However, Friedman never made it to the minor leagues like Gillick. Instead, Friedman, who earned a B.S. in management with a concentration in Finance from Tulane University, worked on Wall Street, first for Bear Stearns then for MidMark Capital. Friedman got into baseball after he had a chance to meet Rays principal owner Stuart Sternberg, a fellow New Yorker who made his fortune on Wall Street. The two unique paths of Gillick and Friedman exemplify the increasingly divergent paths MLB GMs have taken to their positions. In any case, the obligations of a MLB GM are difficult and wide-ranging. The first part of this article will examine some of the duties of a GM, including representing the organization at league meetings, preparing for amateur player drafts, negotiating with agents, representing the club during salary arbitration, dealing with the media, managing the club’s payroll, ensuring compliance with MLB rules and the collective bargaining agreement and of course creating and developing the clubs roster. The second part of the article will examine the characteristics and experiences of MLB GMs including playing experience, coaching experience, education, age, gender, race, family ties and career path. In addition, the article will provide a longitudinal study, showing how these traits have changed over 20 years, comparing GMs from 1989, 1999 and 2009

Understanding the Evolution of Signing Bonuses and Guaranteed Money in the National Football League: Preparing for the 2011 Collective Bargaining Negotiations

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