“The brokers are seeing this an opportunity to write a tremendous amount of business.”

You may not like where the NIL train is taking college football, but here’s a potential unforeseen consequence from Alston worth noting.

While the practical consequences of the Supreme Court’s decision in NCAA v. Alston will likely remain unsettled for months, those involved in the business of insuring college athletes with pro potential are already licking their chops.

… Up until now, the NCAA has allowed schools to pay the premiums of players’ disability policies and loss-of-value riders—coverage that is triggered if an athlete suffers an injury that directly and substantially impacts their future earnings as a rookie—but only out of the limited pots of money provided to each institution’s Special Assistance Fund or Student Athlete Opportunity Fund. Those monies, provided by the NCAA through a portion of its basketball tournament proceeds, are also meant to cover a host of other expenses related to athlete welfare and academic support.

For certain schools with large athletic budgets, and which annually produce multiple NFL or NBA draft prospects, the requirement to only use SAF and SAOF money likely means they are spending less, and perhaps significantly less, on athlete injury insurance coverage than they otherwise would if allowed to tap into their general sports budgets.

The Alston ruling’s impact on disability premiums is complex, but Richard Giller, a Los Angeles-based attorney who represents athletes in injury insurance-related matters, views it as an eminently logical extension of the litigation.

“As I see [the Alston] ruling,” Giller asserts, “schools no longer have a cap on what they can spend on insurance policy premiums for their top student athletes.”

Why so?

In Giller’s mind, the key to Alston was how the Supreme Court affirmed Wilken’s earlier commentary about the NCAA already permitting, albeit with restrictions, schools to pay for LOV insurance premiums. Those costs, like others incidental to an athlete’s collegiate experience, belie a “consistent definition” for amateurism, as Gorsuch wrote in the opinion.

Giller also draws attention to remarks raised by Chief Justice John Roberts during the oral argument in March.

“You’re paying the insurance premium so that they will play at college and not in the pros?” Roberts bluntly asked NCAA counsel Seth Waxman. “Doesn’t that undermine the amateur status theory you have?”

Roberts described this seeming contradiction as “the most troublesome.”

In response, Waxman explained that loss-of-value coverage is “a cost of participating in athletics that permits athletes who want to receive an education, instead of pay, for their play can continue to do so.” In other words: It appears to be an “educational-related benefit” by virtue of it encouraging athletes to stay in school.

By that logic, conceivably, anything that might encourage an athlete to stay in school, such as a new car, could be defined as an “educational-related benefit.”

You don’t have to be Mark Emmert to see the size of the hole the NCAA’s argument opened.  But skipping past that own goal for the time being, if it does in fact change how much schools can pay for college athletes’ insurance, there would seem to be two logical conclusions to infer from that.  One, it probably would encourage some players to stay in school — and perhaps lower the pressure to opt out of bowl games.  Two, does anyone really need to spell out how, once again, such a policy favors programs with the resources to pay the premiums for increased coverage?

I’m sure nobody would mention such an advantage on the recruiting trail.

2 Comments

Filed under It's Just Bidness, The NCAA

2 responses to ““The brokers are seeing this an opportunity to write a tremendous amount of business.”

  1. GruvenDawg

    Assuming UGA will work with one of the companies that offer this coverage for all it’s athletes. Would they cover all policy costs for the 600+ athletes like some companies already do (life insurance) for its employees? Most players then get a loss of value riders based on current and future income potential. Sounds like this will probably be the new norm in P5, similar to stipends.

    I can see why the insurance companies are licking their chops

    Like

  2. trbodawg

    When I read that article yesterday, I looked all over for a company that sells LoV insurance that I could buy stock in.

    Liked by 1 person