Rodriguez, 37, could miss the Major League Baseball season after undergoing hip surgery and his future with the Yankees is in question after a Florida newspaper report that the three-time American League Most Valuable Player was doping as recently as last season. Rodriguez, who acknowledged in 2009 using performance-enhancing drugs from 2001 to 2003, said the Jan. 29 report in the Miami New Times isn't true.
The New York Daily News and the New York Post said this week that the Yankees are looking for a way out of the record $275 million, 10-year contract Rodriguez signed after the 2007 season. That might be impossible through an insurance claim, according to an industry official who's worked on sports policies for Lance Armstrong, Michael Jordan and Pete Sampras.
"We've all heard the rumors about potential use of drugs and typically that is an exclusion that you see most every time in a policy," Mike Price, the founder of Atlanta-based Entertainment & Sports Insurance eXperts, said in a telephone interview. "If it's proven the individual took illegal drugs during that time, it voids the insurance."
Rodriguez acknowledged doping while with the Texas Rangers 14 months after signing his current contract with the Yankees. He said he stopped using a banned substance in 2003 and hasn't taken it since. MLB is now probing the New Times report that links Rodriguez to Biogenesis, an anti-aging clinic in Miami that closed last month. The weekly newspaper acquired company records that it said showed Rodriguez paid for banned products, including human growth hormone, and mentions his name on a patient list through last season.
The Yankees probably will await MLB's findings before deciding their next action with Rodriguez, though their options may be limited. Possible options include a settlement with Rodriguez or the filing of an insurance claim if the hip injury forces his retirement and prevents him from playing professional baseball again.
Yankees President Randy Levine said in an email that the team doesn't disclose which company insures the team's contracts. The Yankees said in a statement this week that they supported baseball's antidrug policies and would refrain from comment related to the New Times report until the MLB investigation is complete.
When Rodriguez had his $252 million contract with the Texas Rangers, Warren Buffett said in Berkshire Hathaway's 2000 annual report that his company's policy protecting the ballclub from the possibility of a career-ending injury probably would set a record for disability insurance.
Price, the insurance executive, said there may be multiple carriers for a contract the size of Rodriguez's, with many layers of coverage in place. Such an insurance policy would typically reimburse up to 66.6 percent of the amount of a star athlete's contract. In 2001, the Baltimore Orioles got money back after a degenerative hip injury forced outfielder Albert Belle to retire two years into a five-year, $65 million contract.
Terry Michelitch, executive vice president at Willis Group Holdings, the third-largest insurance broker, said teams usually take out a temporary total disability policy or a permanent total disability policy on an athlete's contract.
"My hunch is that they have a PTD policy," Michelitch said of the Yankees. "Just because a lot of folks end up going that direction, and with somebody at his age as well. That's the other compounding factor. With a lot of pre-existing conditions, that's going to push them more toward a PTD."
To get back any of the salary Rodriguez is owned, there would have to be proof of a career-ending injury with a permanent total disability policy.
In Rodriguez's situation, the claim could be put into motion if team doctors determine that he's not going to be able to play again following the Jan. 16 hip surgery, Price said.
Those findings would then be given to the insurance carrier, who would appoint a doctor to review the information and possibly call for new tests. If the carrier's doctor agrees with the original findings, the claim would go forward. If there's a disagreement, it would go to arbitration with an independent third doctor.
"The definition says the player must be injured past the hope or the expectation of ever again engaging in their occupation," Price said. "He has to be permanently disabled and, in the eyes of the insurance carrier, be injured beyond returning to playing professional baseball again."
Rodriguez's recent decline in production wouldn't be a factor in any insurance outcome.
After 13 consecutive years with at least 30 home runs and 100 runs batted in, Rodriguez's numbers have tailed off in New York amid injuries the past two seasons. He batted .272 with 18 home runs and 57 RBI over 122 games in 2012, when he became the overpaid symbol of the Yankees' postseason shortcomings.
Rodriguez, who ranks fifth in MLB history with 647 homers, went 3-for-25 in the playoffs with 12 strikeouts. He was 0-for- 19 against right-handed pitchers and was benched for the final two games of the Yankees' playoff series against Detroit.
"The insurance contract doesn't cover loss of skill," Price said.
It may all be rendered moot if MLB's investigation turns up evidence that Rodriguez continued to use performance-enhancing drugs during his current contract.
"I don't know the terms of the contract, I can just tell you that working with many athletes for 20 years, typically the contract will include an exclusion for illegal use of drugs," Price said. "In that case, they're not getting anything back."
With assistance from Scott Soshnick, Noah Buhayar and Dan Kraut in New York.
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