Major League Baseball says millions of dollars have been paid out in insurance every year to avoid financial disasters – and now that COVID-19 has caused one, insurers are refusing to pay it out.
Major League Baseball is suing its insurers, claiming they have refused to reimburse billions in losses caused by the novel coronavirus.
According to CNN, the lawsuit was filed in mid-October by the baseball commissioner’s office, MLB entertainment media services, MLB Network and Tickets.com.
In addition, all 30 Major League Baseball teams signed the lawsuit as co-plaintiffs. Together they claim to have suffered massive property and brand damage in addition to “time element-related” losses.
In its complaint, Major League Baseball claims it bought “the highest quality all-risks policy” to protect its business – and baseball – from the “risk of catastrophic economic losses.”
The coronavirus – along with government restrictions on exercise, sporting events and event capacity – has reportedly cost MLB billions in damage. Baseball officials say they have been paying massive annual bonuses for decades to avoid the financial consequences of a similar event.
“Baseball paid millions in bonuses year after year for deliberately buying broader, more protective coverage,” the lawsuit said. However, the insurers have “very publicly refused to honor their contractual obligation to pay the promise.”
The lawsuit states that the coronavirus is unique in the way it has affected baseball. After all, fans of the sport drive their income from selling tickets to buying branded clothing.
Baseball field; Image courtesy of Pxhere, CC0.
According to Major League Baseball, fans have historically supported their signature sport “through two world wars and a host of other local, regional, and global crises” because “whenever America faced a crisis, baseball – and playing baseball games.” – was a common bond that united the country. “
However, the nature of the pandemic has effectively prevented fans in many locations from actually participating in games or otherwise engaging with the MLB’s business model. New coronaviruses and government-mandated closings have forced professional baseball teams to cancel more than 1,500 games.
The result is the shortest professional baseball season ever, according to CNN.
“COVID-19 has forced clubs to play the entire shortened season without the core: fans in the stands,” the suit reads.
Overall, MLB estimates that it has suffered massive lost revenue from ticket sales, concessions, parking lots and merchandise. They also claim to have suffered at least $ 1 billion in media broadcast rights losses as a result of game cancellations.
“Due to COVID-19, Major League Baseball companies, including the 30 Major League clubs, have suffered significant financial losses due to our inability to play games, receive fans, and otherwise for much of 2020 to operate the normal business season “, it says in the lawsuit. “We firmly believe that these losses are fully covered by our insurance policies and we are confident that the court and jury will approve.”
MLB and all 30 teams are suing insurers, citing billions in losses due to Covid-19
MLB sued trio …