OT?: OTL/ESPN Article on Insurance Issues for Impact Sports
Interesting article on ESPN this morning about insurance companies unwillingness to provide coverage for head trauma or neurological damage sustained in contact sports. I'm sure some how some way leagues will find away around this but, if not do we start to see contact sports, especially football fade around the country? Sorry if link doesn't work, first timer here.
January 17th, 2019 at 12:53 PM ^
This is an issue, I think. Are parents going to let kids play these sports without this insurance?
My sister works for a big insurance company and this is what she does. She sells insurance to travel sports teams and such. She said they stopped even insuring youth soccer, apparently there is a lot of concussions and not worth the risk.
January 17th, 2019 at 12:53 PM ^
Robots will play professional football and hockey within 30 years. It's a lot cheaper to repair a robot than a human, and robots don't need to be paid.
January 17th, 2019 at 12:53 PM ^
Very interesting article. Thank you for posting. It will be interesting to see what the next 30 years has in store for contact football.
Its a shame because football is the best sport played today.
January 17th, 2019 at 1:08 PM ^
I love, love, love sports....playing, coaching, officiating-have done all three a lot and thoroughly enjoyed every aspect...it's all good. Football is indeed an exciting spectator sport. I have played 5 different sports very competitively. For me, basketball is WAAAAAAAAAAAAY without rival the best sport to play...in every way...not even close!!!!!!!!!!!!
January 17th, 2019 at 1:41 PM ^
Disagree on the basketball point. Fouls seem too random and it becomes annoying. That’s why there are so many “fights” in pickup games or rec games. There is a foul for getting in someone’s way. In every other sport that’s just called defense.
January 17th, 2019 at 1:10 PM ^
They will switch to single and multi cell captives and the NFL/College organizations will have to contribute to the captive pool with a reinsurer taking what’s catastrophic. If the NFL is smart they will self insure in the next couple of years because the rate of TBI should go down meaningfully or they will put it as exemption.
January 17th, 2019 at 1:21 PM ^
If insurers can exclude brain injuries, this is no longer an issue. That's a problem because that doesn't prevent a lawsuit that Pop Warner or your local rec league cause your brain injury. And then you sue Pop Warner and their insurance has that as an exclusion. So Pop Warner has no coverage for that lawsuit and is out of business.
And nobody's going to reinsure this anyway. If they can't find a primary insurer, nobody's going to stick their neck out for the excess layer.
January 17th, 2019 at 2:27 PM ^
The pay ($ millions) and the rewards (fame/celebrity) are too great for contact sports to fade too much.
In addition, we're talking about percentages and odds, not guarantees. I get that that's how insurance companies function, and that's why they may cut of insuring head trauma from contact sports. But that decision by insurance companies won't dissuade most people. It wouldn't have dissuaded me regardless of what my parents thought or did. Also, as a parent, it wouldn't dissuade me from letting either of my kids play. Sports brings a lot of joy and life lessons.
Also, I should use 'dissuade' one more time.
January 17th, 2019 at 2:38 PM ^
Really interesting piece. I agree with many of the posters here and it is clear the MGo Community has a bevy of intelligent, thoughtful finance and legal pros.
I love football and to me, it is bar-none the most entertaining, drama-filled sport to watch on TV. Sports are a major "durable good". I remember where I was when Michigan beat WSU for the Rose Bowl and National Championship. I don't remember a thing about the gas station I went to yesterday.
Notice that there are two more football leagues starting up (AAF and then XFL) and I would definitely be watching the AAF (and Denard!) over MLB regular-season "meh" game any day. It is clear these two leagues have gotten the coverage necessary to be businesses. The article points to that sole coverage provider.
The risk market is responding to a very real threat and a lot of uncertainty... that's the big issue I see. When risk is more certain and the costs / liability more captured, the risk market is amazing at pricing risk. Fix the uncertainty through science / technology / etc and football will survive. This will also be the only way to reign in trial lawyers hungry for a buck.
One quick thing: ESPN will not survive in its current form without the NFL or NFL games. Point-blank. The NBA is a joke and when Lebron is gone, the ratings will be even worse. Without the NFL and CFB playoff and the massive TV audience... ESPN is toast. Part of me wants to celebrate to that. Maybe we'll be watching future games on DAZN for $9.99 per month?
Adios ESPN!
January 17th, 2019 at 4:11 PM ^
The people who don’t care about football will be the ones who ruin football because the people who run football will listen to the people who don’t care about football.