In March 2020, everything stopped. Sports leagues were facing for the first time a loss of huge portions of their seasons. Everything from the Olympics to college and professional sports was postponed or canceled, and stadiums and arenas stood empty.
Slowly, as authorities learned more about the novel coronavirus, teams began practicing again. Leagues scheduled games, though this time, without fans present. Soon, some teams were allowing a limited number of fans in the stands. The hope was that even in a limited capacity, leagues would be able to deliver games and recoup a small portion of the revenue lost during shutdown, all while keeping everyone healthy.
Leagues are looking closely at their situations to determine how they'll meet their contractual obligations. For example, player salaries and other expenses.
Player contracts and benefits must be renegotiated based on the new schedule. How will teams be traveling? Will there be fans and if so, how many? What are the protocols by which players must ensure a COVID-free status? How does the current situation impact insurance programs?
The liabilities
As insurance brokers, we at NFP have been working closely with leagues and with insurance carriers to get those answers.
Coverages like disability insurance, health benefits, life insurance all must be reviewed so that leagues understand the coverage terms and limitations of each policy.
It's also important to review claim activity. On top of virus-related disabilities, there are also injuries and other disabilities. How will those claims will be handled going forward? NFP is working with carriers to come up with revised terms and conditions.
Those might include language that can help leagues meet contractual obligations, but perhaps with more time in which to do so. [Or possibly a salary reduction schedule to mirror the revised season.]
That revised season means fewer games, fewer fans, and plenty of contractual issues. As the league moves forward cautiously, contracts must be reviewed, amended, and approved to match the reduced revenue and profits. Likewise, insurance carriers are adjusting coverage language and terms amid the truncated schedules and additional health and safety concerns.
Building better protections
As experts in the sports and entertainment insurance industry, NFP is working with both leagues and insurance carriers to bring more clarity at a time of ambiguity. As liaisons between the leagues and the carriers, we have been able to clarify insurance needs and address insurance coverage gaps so that leagues can be better protected.
Also, we are looking at current market conditions and determining what activities can occur. From there, we can negotiate based on the criteria that leagues must work within, and help them find ways to get back to business safely, even if on a limited playing schedule.
That schedule, and the conditions currently are of the moment and can change rapidly. We're helping both leagues and insurance carriers respond more flexibly, which is critical in a time of shifting conditions. Improving coverage, and the approach to operations, means everyone wins.
For more information, please contact Marc Blumencranz at marc.blumencranz@nfp.com or Leigh Ann Rossi at leighann.rossi@nfp.com.