duncan228
04-15-2008, 09:00 AM
http://www.ocregister.com/articles/season-million-insurance-2018196-brand-clippers
Smith column: It's all part of the plan
NBA and NHL teams are required to have insurance plans on top players, so when Elton Brand suffered his injury the Clippers were protected against part of his salary.
MARCIA C. SMITH
LOS ANGELES -- Without All-Star forward Elton Brand for the first 74 games of this season, the Clippers careened and crashed, their twisted wreckage now heaped on the NBA roadside and the bottom of the Western Conference Pacific Division standings.
Fortunately, they have insurance.
The Clippers won't get relief from the disappointment of going another year without making the playoffs or from the losing record of 23-57, which they take into Tuesday night's next-to-last, regular-season game at New Orleans.
But they can file a claim that should protect them from paying the entire $15.344 million salary guaranteed to Brand, their leading scorer and rebounder who missed most of the miserable season because of a ruptured Achilles tendon.
For the team that so often seems to be without a plan, the Clippers have taken out one that could save them more than $6 million.
Every team in the NBA and NHL, under terms of their respective Collective Bargaining Agreements, must take out temporary and total disability insurance on its top five salaried players each season.
BWD Group LLC, a Jericho, N.Y.-based brokerage firm, has administered the NBA's plans since 1964 and the NHL's policies since 1988. Its sports division monitors both leagues closely, following players as they get traded, sign new deals, drop in and out of a franchise's top five, get hurt, miss games or seasons and end careers.
Insurance steps in to pay after a covered marquee player misses at least 41 NBA regular-season or 30 NHL regular-season games due to a single injury.
As with any insurance, there is a premium that must be paid in order to have the coverage in place. Those amounts are customized to each player and are typically less than 5 percent of a player's salary.
With top NBA players often earning well above $10 million a season, clubs are spending hundreds of thousands of dollars in premiums alone.
Teams also have to pay out a sizable chunk of the player's salary before insurance starts picking up his paycheck. The standard deductible is a 41-game salary (half the season) in the NBA and a 30-game salary (about a third of the season) in the NHL.
The real safeguard of the insurance lies in protecting teams from having to pay out large, multi-year contracts if top-paid players were to suffer career-ending injuries.
"Teams view these policies as a necessary part of the cost of doing business," said Leigh Ann Rossi, BWD Group's senior vice president of sports and entertainment. "It's expensive insurance but it protects both the players and the teams when a serious injury occurs."
A BWD Group representative came to Los Angeles earlier this month to check on the Clippers' potential claims.
Nobody will comment on whether the Clippers had taken out coverage on point guard Shaun Livingston, who earns $4.4 million this season despite missing the year to rehab his dislocated left kneecap.
But Brand, whose team-high $15.344 million salary accounts for nearly a nearly a quarter of the team's $64 million payroll, is covered.
The BWD Group "kept up to date," Rossi said, with the status of Brand, who was injured on Aug. 3 during a workout at the Clippers training facility at Spectrum Club South Bay and had foot surgery on Aug. 4.
He missed the first 74 games of the season before returning on April 2 at Seattle to play the final eight games of the season.
When all the insurance paperwork is finalized, the Clippers are expected to pay $9.2 million of Brand's $15.344 million salary.
That includes the $7.7 million of the 41-game deductible and $1.5 million for the eight games he will play. Insurance will cover Brand's salary in 33 of the 74 missed games, sparing the Clippers a $6.1 million expense.
If Brand were to have sat out the entire season, the Clippers could have relied on insurance to cover as much as $7.7 million – or half of Brand's salary.But having Brand back on the court, even for the final inconsequential games of this lost season, is a luxury.
Smith column: It's all part of the plan
NBA and NHL teams are required to have insurance plans on top players, so when Elton Brand suffered his injury the Clippers were protected against part of his salary.
MARCIA C. SMITH
LOS ANGELES -- Without All-Star forward Elton Brand for the first 74 games of this season, the Clippers careened and crashed, their twisted wreckage now heaped on the NBA roadside and the bottom of the Western Conference Pacific Division standings.
Fortunately, they have insurance.
The Clippers won't get relief from the disappointment of going another year without making the playoffs or from the losing record of 23-57, which they take into Tuesday night's next-to-last, regular-season game at New Orleans.
But they can file a claim that should protect them from paying the entire $15.344 million salary guaranteed to Brand, their leading scorer and rebounder who missed most of the miserable season because of a ruptured Achilles tendon.
For the team that so often seems to be without a plan, the Clippers have taken out one that could save them more than $6 million.
Every team in the NBA and NHL, under terms of their respective Collective Bargaining Agreements, must take out temporary and total disability insurance on its top five salaried players each season.
BWD Group LLC, a Jericho, N.Y.-based brokerage firm, has administered the NBA's plans since 1964 and the NHL's policies since 1988. Its sports division monitors both leagues closely, following players as they get traded, sign new deals, drop in and out of a franchise's top five, get hurt, miss games or seasons and end careers.
Insurance steps in to pay after a covered marquee player misses at least 41 NBA regular-season or 30 NHL regular-season games due to a single injury.
As with any insurance, there is a premium that must be paid in order to have the coverage in place. Those amounts are customized to each player and are typically less than 5 percent of a player's salary.
With top NBA players often earning well above $10 million a season, clubs are spending hundreds of thousands of dollars in premiums alone.
Teams also have to pay out a sizable chunk of the player's salary before insurance starts picking up his paycheck. The standard deductible is a 41-game salary (half the season) in the NBA and a 30-game salary (about a third of the season) in the NHL.
The real safeguard of the insurance lies in protecting teams from having to pay out large, multi-year contracts if top-paid players were to suffer career-ending injuries.
"Teams view these policies as a necessary part of the cost of doing business," said Leigh Ann Rossi, BWD Group's senior vice president of sports and entertainment. "It's expensive insurance but it protects both the players and the teams when a serious injury occurs."
A BWD Group representative came to Los Angeles earlier this month to check on the Clippers' potential claims.
Nobody will comment on whether the Clippers had taken out coverage on point guard Shaun Livingston, who earns $4.4 million this season despite missing the year to rehab his dislocated left kneecap.
But Brand, whose team-high $15.344 million salary accounts for nearly a nearly a quarter of the team's $64 million payroll, is covered.
The BWD Group "kept up to date," Rossi said, with the status of Brand, who was injured on Aug. 3 during a workout at the Clippers training facility at Spectrum Club South Bay and had foot surgery on Aug. 4.
He missed the first 74 games of the season before returning on April 2 at Seattle to play the final eight games of the season.
When all the insurance paperwork is finalized, the Clippers are expected to pay $9.2 million of Brand's $15.344 million salary.
That includes the $7.7 million of the 41-game deductible and $1.5 million for the eight games he will play. Insurance will cover Brand's salary in 33 of the 74 missed games, sparing the Clippers a $6.1 million expense.
If Brand were to have sat out the entire season, the Clippers could have relied on insurance to cover as much as $7.7 million – or half of Brand's salary.But having Brand back on the court, even for the final inconsequential games of this lost season, is a luxury.