СИБИТ_Кейс Деловой английский Кейс: Claimgame

Кейс: «Claimgame»

From the print edition: Finance and economics
The calculations behind the insurance of athletes

WHEN Alex Rodríguez, baseball’s highest-paid player, announced last month that he needed hip surgery, it wasn’t just the New York Yankees that groaned. The biggest share of the resulting financial pain may well be felt by Team Scotti, the lead insurer on his ten-year, $275m contract. If Mr. Rodríguez can recover by midsummer, the firm will escape unharmed since most policies do not pay out until a player has been sidelined for at least a few months. But if his injury drags on, it could make it harder for teams to get coverage – and thus harder for athletes to extract similarly lucrative contracts in the future.
As salaries in professional sports have soared over the past few decades, so has the price tag associated with the risks inherent in such strenuous physical activity. Athletes in sports like golf and tennis often buy their own insurance, though those with recurring conditions have trouble getting coverage. But sports teams that offer guaranteed contracts face huge losses if stars are injured, even only temporarily. As a result, the economics of the business are now shaped by insurance markets just as they are by TV contracts or ticket sales.