NCAA Program Allows “Exceptional” Athletes to Hedge Against Loss of Future Earning Potential

“Prediction is Very Difficult, Especially about the Future” – Nobel Prize winner Niels Bohr may not have had sports in mind when he said this but, yes, predicting the future is hard and that is exactly what makes sports so exciting. Whether it’s the big, unexpected play with only seconds left on the clock or a Cinderella story at a National Championship – unpredictability is why we watch the game. Despite the difficulty, we like to predict the future of star athletes. One big question surrounding any star collegiate athlete, especially at draft time, is “what is that athlete going to make in the big leagues?”

Following an athlete’s transition from college to the pros is exciting. Alas, disabling injuries in college sometimes keep that athlete from moving up to the big leagues. To that end, the NCAA has a program to protect, at least partially, against the loss of future earnings in the event that the athlete doesn’t make that transition. The program is called the “Exceptional Student-Athlete Disability Insurance Program.”

Speaking of trying to predict the future of star athletes, consider Johnny Manziel, the 20-year old 2012 Heisman Trophy winner from Texas A&M. Since his big 2012 season, fans and pundits alike want to know if and when he’ll go pro. Given his star status, one of this program’s next participants is – yes, you guessed it – Manziel himself.

This insurance program is designed to protect against the loss of future earnings of exceptional players in certain sports (football, men’s and women’s basketball, men’s hockey, and baseball). The policy covers potential earnings up to policy limits if a player suffers an illness or disabling injury during that player’s college career and is unable to play at the professional level. The major qualification? A student-athlete must demonstrate the potential to be selected in the first round of the MLB, NBA, or WNBA drafts or the first three rounds of the NFL or NHL drafts.

Meanwhile, fans and pundits alike will continue to speculate about Manziel and other top collegiate athletes and their future careers.  As far as what the future will hold for them or us . . . well, it’s just a prediction.

Johnny Manziel to have insurance

This posting has been prepared for general information and is not intended to be relied upon as legal advice. Please consult an attorney about specific questions.

Joseph M. Hanna is a partner and chair of Goldberg Segalla LLP’s Sports and Entertainment practice group.

Aaron J. Aisen is an associate with Goldberg Segalla LLP’s Global Insurance Services practice group.

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