The cutting edge of business decisions

If you’re unhappy about seeing fewer star players take the field for their college team’s final bowl game, you may have a new villain to blame, the insurance industry.

Former Notre Dame linebacker Jaylon Smith has become at least the fourth highly-rated player in the last 18 months to collect on his loss of draft value insurance policy, two sources told CBS Sports.

But that is less of a story than the implications of Smith’s payout — believed to be $700,000. Will the increasing availability of such insurance and seeming frequency of payouts make it more likely that more players will be skipping bowl games?

“What you saw is the tip of the iceberg,” said Bryan Fisher, a Baton Rouge, Louisiana-based attorney who works with college players vetting insurance. “You’re going to see a lot of kids skipping.”

Much was made of Stanford’s Christian McCaffrey and LSU’s Leonard Fournette skipping their teams’ bowl games because of injury concerns.

Their loyalty was questioned by some even though McCaffrey touched the ball more than 800 times at Stanford. Fournette had been nicked up at LSU but was considered a workhorse himself.

Meanwhile, a cottage insurance industry has grown up around top-rated college football players in recent years. CBS Sports reported last year Fournette had separate $10 million policies for total disability and loss of value.

Even if Fournette collected on those policies, he’d get a fraction of what he would earn as long-time healthy NFL player. So does this mean the less football played, the better?

“I would probably say more young men will be cognizant that that is a reality,” said Ronnie Kaymore, CEO of Kaymore Sports Risk Management, who advises players on such matters.

It’s not like anybody can do much of anything to stop it, either, unless, I guess, the NCAA revokes its current policy of allowing players to borrow against their future earnings to buy such coverage.  That would send one helluva negative message, though.

In the meantime, though, notice this bit at the end of Solomon’s story:

In the last four years, schools have begun exploiting in a loophole in NCAA rules that allows them to pay those premiums. The Student Assistance Fund at each school is stocked by NCAA money. Typically, there is $300,000-$350,000 in that fund.

The practice of paying for premiums has become so common, that it has become a recruiting tool.

“You would have a difficult time managing recruiting without paying the premium for insurance for players,” Oklahoma State coach Mike Gundy said. “If I had a son that I thought could be that good, if you’re a school that can’t pay the premiums, he’s not going there.”

Before you ask, even Georgia’s gone there.  As long as those funds can’t be clawed back into the reserve fund, their existence will be useful for Smart in that regard.

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22 Comments

Filed under It's Just Bidness, The NCAA

22 responses to “The cutting edge of business decisions

  1. Uga81

    Lmao I swear I can’t believe I actually read it all. Gotta give the Senator some credit. He does find some shit to keep things going.

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  2. Hogbody Spradlin

    So, the insurance will make it more likely players will skip bowl games because the benefits aren’t high enough? Sounds like the insurance is just a recruiting racket, er tool, with little real value.

    (Says the lawyer who writes title insurance on 100 year old platted subdivisions).

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  3. Macallanlover

    There is plenty of money to buy this risk insurance to allow players to participate, skipping bowl games is an issue that needs to be nipped in the bud, but I fear that horse has already escaped, It makes less sense for a McCaffrey to quit on his team for a Weedeater Bowl than for another top star like Watson to play in the playoff games. The chance of injury is the same for one game, or double for getting the extra game.

    Pay the insurance money and play the games. As a teammate I would feel let down by a healthy player abandoning me before the final game. Injuries are a part of the game all of these players committed to play; with financial coverage provided there is no reason to bail out. It seems the injury issue is gaining so much momentum that the game is threatened, we have players quitting, and fans saying we should not practice or play the Spring schedules. I am encouraged by the new protocols for head injuries and the advancement in equipment and medical technologies but there will always be risk and sad stories. You either buy into that result or accept the decline in the sport. Other than low blocking prohibitions, I am not sure where the rules can go from here without damaging the product to the point it loses interest.

    Liked by 1 person

    • … skipping bowl games is an issue that needs to be nipped in the bud…

      How do you propose to nip?

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      • Macallanlover

        Sigh, the reality lies in the remainder of that sentence “but I fear that horse has already escaped”. Honestly, it is a financially driven decision and only a financial counterbalance would likely work. I don’t think the schools have the leverage at that point, and the owners probably doesn’t care (based on the reactions I have seen in other instances of dealing with “bad behavior” from athletes.) I don’t have an answer given the two parties involved and agree that what was minimal attrition this past season will grow rapidly in the coming years. Until players see their draft status impacted negatively by sitting out, I believe the family and agents will win this battle.

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        • Not trying to be snarky here, Mac, but I don’t see how a player sitting out a bowl game would impact his draft status in a negative way.

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          • Macallanlover

            Then we will not have a solution. No penalty, no change in the trend I foresee. It’s not snarky, we just evaluate what that says about the individual differently. Admittedly, I am Old School and feel that is a character flaw…you don’t quit on your buds. Finish the job.

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  4. Bright Idea

    If big name players skipping meaningless bowls becomes an epidemic will ESPN quit having so many meaningless bowls?

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  5. Go Dawgs!

    College football’s powers-that-be already devalued the bowl system with the CFP. I can’t be mad at the players for following their lead.

    Liked by 1 person

  6. JCDAWG83

    The next logical step will be the stars skipping the third season entirely and signing with an agent who will pay for a year at a pro style training camp. I recall some pretty serious talk about that very thing with Clowney and I really wouldn’t have blamed him a bit. As long as the absurd rule about players having to be 21 to be drafted remains in place and college football is the only true path to the NFL, there will be justifiable concerns by the stars about injury.

    Raise the admission standards so only actual students would be playing college football and force the NFL to create a farm system for the true stars. That will solve the issues of paying the players and college stars worrying about injury before they can sign with an NFL team.

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    • paul

      But that costs the NFL money they don’t currently have to spend. And they won’t do so until they have no other choice. Conversely, at the college level, raising admission standards so only actual students play takes money out of their pockets. LOTS of money. They won’t give that up willingly. So, at this point, there’s no incentive at either end of the pipeline to change anything.

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      • Mayor

        Not advocating this mind you, but a friend of mine has a theory that if you did away with college football scholarships entirely the college game wouldn’t be effected negatively at all. The players would still go to college, at least the ones smart enough to get in, and if it was just like HS (i.e. you just showed up and tried out) the best players would still play. Someone would recognize the business opportunity of establishing a minor league football league and the guys who couldn’t qualify academically would play there. The tickets for all the college games would be sold out for the top teams just like it is now. Plus, the players who couldn’t get in school or who simply wanted to go straight to pro football would have a way to play pro immediately–sort of like a farm system. In fact, that is the likely scenario. The NFL owners would set up the minor league teams sort of like how Arthur Blank did with the Georgia Force. The colleges would save a bundle on scholarship payments.

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      • JCDAWG83

        What?! the NFL doesn’t have the money?! What planet’s NFL are you watching? Also, how does raising admission standards cost a college any money? Colleges could still give scholarships to players who also met entrance requirements if they wanted to. For the colleges, nothing at all would change on the cost side of the ledger. If anything, a school like Georgia would save money because all players would be eligible for HOPE for at least a year and would not need any tuition money.

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        • Debby Balcer

          You need to reread what he wrote he said it costs money they don’t have to spend not that they don’t have it to spend.

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        • paul

          The NFL is awash in money. They just don’t want to spend it on things they don’t have to. Like developing professional football players. The colleges are doing that for them quite nicely. And cost effectively. I hate to burst your bubble, but if all D1 college football players had to compete with every other student on campus for admission, anywhere from 50% to 75% would never be admitted to school. As such, the quality of the product on the field diminishes quite significantly if those players have to find another avenue to the NFL. ESPN and the fans aren’t falling all over themselves to see D3 football. D3 ball is fun, no doubt. I enjoy it. You may too. But it doesn’t bring in the big bucks.

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        • Macallanlover

          Agree, they have the money and should fund a develop league. If not, don’t reward those who don’t fulfill their obligations. I don’t see it being that big a cost, plenty of sports programming inventory to pay for much of the tab. Let them play on ESPN, etc. on Tuesday or Wednesday, if there are sponsors for the Bahama and Hawaii bowls, there will be folks watching 4 and 5 star athletes who don’t want to be “pretend students”.

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  7. Cousin Eddie

    I wish the NCAA would allow for Red-shirted players to participate in bowl games without impacting their eligibility. As a reward for all the extra scout team work they do let them participate. Plus I think it would help with fan excitement to see the “future.” now.

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  8. I have no issue with the players missing these rather meaningless games. Keep your health up so that you put your best foot forward with the NFL.

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  9. These high-draft guys have the chance for life-changing money for their families. If they decide to sit out a meaningless bowl game and the coach agrees with the decision, I can’t blame them for wanting to take care of their bodies and families.

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