ESPN: Why The Mets Opted Not To Insure Santana’s Contract
Adam Rubin of ESPN New York, does a fine job of explaining why the Mets chose not to insure Johan Santana’s contract.
The Mets will be on the hook for the remaining $31 million owed to Johan Santana because they did not insure the contract. Why?
As premiums have skyrocketed because of escalating salaries and past payouts — such as the bailout when Mo Vaughn was owed $17 million and could not play for the Mets in 2004 — the organization began more often “self-insuring” its larger contracts than seeking outside coverage. In essence, the Mets chose to create a rainy-day fund available so that the organization would not be crippled financially by the loss of a key player due to injury.
It saves potentially a $2 million insurance premium per year to protect a contract, although the amount annually paid to an insurance company naturally decreases as the years on the contract elapse — like you’d pay less to an insurance company on a car as the years go by and the vehicle is worth less.
Across baseball, outside insurance has “declined tremendously,” according to one baseball official.
Santana was self-insured by the Mets, whereas the Mets contracts for Carlos Beltran, Jose Reyes, Tom Glavine and Mike Piazza’s were insured externally during their Mets days as well. David Wright’s last contract also was insured externally.
About the Author: Joe DeCaro
I'm a lifelong Mets fan who loves writing and talking about the Amazins' 24/7. From the Miracle in 1969 to the magic of 1986, and even the near misses in '73 and '00, I've experienced it all - the highs and the lows. I started Mets Merized Online in 2005 to feed my addiction. Follow me on Twitter @metsmerized.
59 Comments + Add Comment
- Captain America: on Trading Daniel Murphy Doesn’t Make the Mets Better: Plus the distinct POV and grammar
- Hatt Marvey: on Day Two: Complete Mets Winter Meeting Wrap: "That may be a sign that the...
- Hatt Marvey: on Day Two: Complete Mets Winter Meeting Wrap: "One Milwaukee exec told us that talks...
- Hatt Marvey: on Day Two: Complete Mets Winter Meeting Wrap: The opening bid on Drew is $14M...
- XtreemIcon: on Day Two: Complete Mets Winter Meeting Wrap: No chance. The Cards traded Freese away...
2014 Opening Day
Write For Metsmerized Online
Mets Merized Online is reloading and looking for new writers to help cover the Hot Stove Season. We're also looking for passionate writers who would like to contribute new and original features.
Contact us now at GetMetsmerized@aol.com for more info and join the #1 Mets Fansite on the web!
Check Out These Great MLB Links!
Mets Autograph Signings
Mets Fan Apparel
Mets Autographed Baseballs
Baseball Card Supplies
For the best seats and lowest MLB ticket prices, go to PurchaseSeats.com. Get your Mets Tickets now and follow them on the road with Yankees Tickets, Phillies Tickets, Nationals Tickets and Braves Tickets!