Several weeks ago, as the labor talks moved toward a conclusion, a report emerged that the NFLPA had secured lockout insurance in the amount of $200,000 per player, in the event that the entire season were canceled.
I was skeptical, in large part due to the fact that the initial report was very light on details, including how it was obtained and how much it cost.
As it turns out, the lockout insurance was real, and it was spectacularly expensive.
Multiple sources have advised PFT that the insurance was purchased from a company known as Swiss Re, at a premium of nearly $50 million.
Now that players not involved in the leadership of the NFLPA are learning about the lockout insurance and the price tag paid for it, there is some griping about the expenditure of money for which nothing was obtained in return. But that’s the nature of insurance -- every year, billions if not trillions are paid for insurance premiums and the purchaser gets nothing in return other than the knowledge that the insurance existed.
In this case, we’re told that the NFLPA Executive Committee approved the transaction, and that NFLPA leadership believed it would help beat back the owners if unveiled at the right time. Though it’s impossible to know with any certainty whether the lockout insurance helped get the deal done (especially since none of the money would have been paid unless and until the entire season was canceled), it was one of the leverage points that made the NFLPA feel more confident about taking a stand in crunch time of the negotiations.
Actually, the premium was a lot less than it could have been. With more than 1,900 players in the NFL, the total payout would have exceeded $380 million.
Besides, the successful efforts of the NFLPA to keep the owners from pushing the players’ share of the revenues all the way down to 40 percent will result in the recovery of that $50 million more than 100 times over, over the next 10 years.