With the conclusion of the Superbowl, the NFL’s yearlong juggernaut turns its attention to the NFL Scouting Combine taking place this week in Indianapolis , where the best college players are invited to perform a series of physical and mental tests and undergo medical examinations. These results are scrutinized by rafts of scouts and coaches in preparation for the NFL Draft in April. In a game where the average play lasts 4 seconds the difference between a 4.5 and a 4.4 second 40-yard dash could be millions of dollars for these NFL hopefuls.
With the advances in sports science and exercise physiology these players are bigger, faster and stronger than their equivalents even 5 years ago. While these advances lead to a more exciting on field spectacle the risks of injury also increases. Unlike the NBA, where draftees have to be only 1 year out of high school to be eligible, the NFL requires college football players to be 3 years removed from high school before they enter the draft. While this gives players the time to physically mature for an extremely physically demanding sport at the professional level, it prolongs the period of their career where they are unpaid at risk of injury.
In light of this some of the most promising college football players, who are tipped by experts to be taken high in the draft, take out insurance policies to protect themselves from injury affecting their draft stock or ending their careers. As I mentioned before, collegiate players don’t get paid for their efforts so these policies are a way for them to guarantee a certain level of future income if their careers were to be cut short because of injury.
The NCAA (the organisation in charge of college sports in the US) has offered insurance called the Exceptional Student-Athlete Disability Insurance Program since 1990. Players projected to be chosen in the first 3 rounds of the NFL Draft are eligible to purchase this insurance to protect against a career ending injury with a loan against their future income. The maximum pay-out is $10 million and can cost anywhere between $1000-8000 per $1 million insured depending on position and injury history. The loan is repayable either when the player signs a professional contract, a claim is made or the policy expires. This type of policy is also available privately and the only successful claim has been by Ed Chester in 1998.
A projected first round draft pick, he blew out his knee and never played again, collecting $1 million on a policy that cost $8000 with Lloyds of London. Despite the remote chances of players ever claiming on these policies, about 100 are taken out each year.
The improvement in modern medical practices has meant that the worst injuries suffered in this day and age will sideline a player for up to a year whereas 20 or 30 years ago their career would be over. This has resulted in a rise in popularity of another type of insurance that deals with the risks of significant but not career-threatening injuries: Loss of Value Insurance.
Players who take out this type of insurance protect themselves against an injury resulting in them being taken in a later round than they were projected. This is not offered by the NCAA but schools can pay for their players to be insured privately through the NCAA Student Assistance Fund which is a fund to help students with special financial needs. This was the case with recent high profile players such as Jameis Winston, Johnny Manziel and Marcus Mariota. These policies cost about $6000 per $1 million insured.
While this type of insurance sounds much more conducive to NFL prospects hoping to protect their future earnings, it is not without its caveats. Firstly a player would have to fall significantly in the draft due to their injury for the policy to pay out as insurance benefits are tax free whereas the NFL contracts they sign are subject to federal and state income tax.
Secondly players must disclose all their injury history or risk the policy being voided. This was recently the case with Marqise Lee who took out a $9.6 miliion loss of value insurance policy with Lloyds of London before the 2013 season when he was a projected 1st rounder in the 2014 draft. When he fell into the 2nd round due to an MCL injury Lloyds refunded the $95000 premium he paid, citing Lee withheld injury information when taking out the policy.
Lastly there is the issue of cause and effect; it is very difficult to say that a player fell in the draft solely due to injury and not because of a myriad of other reasons such as poor performance, failed drug tests or character issues.
So far only one player has collected on loss of value insurance: Cleveland Browns cornerback Ifo Ekpre-Olomu, who was projected as the top corner in the 2015 draft before his senior season at the University of Oregon. His school paid $40000 for a $3 million policy with Lloyds of Londo. Ekpre-Olumu subsequently suffered a gruesome knee injury in training, tearing his ACL and dislocating his knee resulting in him tumbling to the 7th round.
While the costs of these policies are substantial,players don’t want to be exposed to the risks of suffering a serious injury and ruining their hopes of making it to the NFL where they can potentially make enough money to set themselves and their family up for life. They push their bodies to the limit so that they eventually get paid for their efforts and in doing so increase their risks of never getting paid. These types of policies allow them to train and play in the knowledge that they will have something to show in their bank account for their football career if it is cut short due to injury.