Rays

Rays want insurer to pay for ex-pitcher

In a lawsuit, the team is seeking potentially millions over Wilson Alvarez, who didn't play two seasons because of an injury.

By WILLIAM R. LEVESQUE, Times Staff Writer
© St. Petersburg Times
published January 1, 2003

ST. PETERSBURG -- For two seasons, injured Devil Rays pitching ace Wilson Alvarez collected his multimillion dollar salary without throwing a single pitch in the major leagues.

Now the team has gone to court to get some of that money back.

In a suit filed Monday in Pinellas-Pasco Circuit Court, the Devil Rays are seeking potentially millions in damages against the Hartford Life Insurance Co.

According to court records, the Devil Rays were the beneficiaries of an insurance policy on Alvarez and his five-year, $35-million salary, the richest in team history.

If Alvarez were injured, according to the records, the Devil Rays stood to collect a claim equal to 70 percent of the left-hander's salary for each day of the regular season he missed. That's as much as $34,615 a day.

But collecting has proven to be as elusive as a winning season.

Alvarez signed the contract in 1997 and threw the first pitch in Devil Rays history in 1998. But he underwent shoulder surgery in 2000 for a partial rotator-cuff tear and missed the 2000 and 2001 seasons. He returned for most of the 2002 season and was released by the team in September.

Over those five years, he was limited to 76 games and ended with a disappointing 17 wins and 26 losses and a 4.62 ERA.

The suit does not list a specific amount sought by the Devil Rays, who paid $821,079 in premiums for the policy, according to the suit.

Spokesmen for Hartford and the Rays declined comment Tuesday. Alvarez could not be reached.

The reasons for the claim going unpaid are not stated in the lawsuit.

But the insurance company appears to have been concerned with Alvarez's left arm. For at least the last three years of his Devil Rays contract, insurance coverage excluded payments for injuries to his left shoulder and elbow, court documents show.

Disability insurance for players in professional sports has long been an integral part of the bottom line. Owners are on the hook for guaranteed contracts even when a player's career ends because of injury.

"The outward liability for some of these players can be up to $100-million," said Jim Edgeworth, a sports insurance broker from Houston. "No owner wants to assume that. So they lay some of it off on the insurance carrier."

Baseball got a reminder of the importance of insurance when slugger Albert Belle's career ended in 2001 with a hip injury with three years left on a $65-million contract. His team, the Baltimore Orioles, collected a $28-million claim on its policy.

But the huge payment in Belle's case, and the squeeze put on insurance in general since Sept. 11, have more than doubled premiums.

Edgeworth said some baseball teams now refuse to get coverage, preferring to weather the risk alone. Players can obtain their own coverage, separate from the team's.

"Underwriters are under the gun," he said.

As a result, insurers are charging more and covering fewer injuries, Edgeworth said.

By some reports, Major League Baseball paid $55-million in premiums in the last year. The New York Times reported last month that the Texas Rangers must pay $9-million in premiums to insure the first five years of Alex Rodriguez's 10-year, $252-million contract.

Ed Wade, the Phillies' general manager, told the New York Times, "The insurance available comes with a lot of conditions and a high cost.

"Clubs have to reconcile themselves to not being able to get the kind of coverage they'd like, or they may go into a contract without any insurance coverage at all and hope for the best."

Rays senior vice president/general counsel John Higgins declined to discuss the Alvarez suit. But he agreed that teams are insuring fewer players than in the past because of costs.

"You just hope a player never gets hurt," said Higgins, who said the team looks at insurance on a player-by-player basis.