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Tuesday, November 13, 2018

NYPost: Why Mets may be in hurry to reach David Wright settlement

With the help of Major League Baseball, the Mets are working with their insurance company to try to come to a settlement on the $27 million they still owe the medically unable-to-play David Wright, an industry source said.
***
Because Wright played in the Mets’ next-to-last game of the season as a farewell (after a final comeback from his spinal stenosis fell short), the Mets would have to pay him fully for the first 59 games of next season, as per the terms of their policy. Starting in the 60th game, the policy would cover 75 percent of the remainder of Wright’s $15 million salary and then 75 percent of his entire $12 million salary for 2020, which would add up to about $16.2 million of relief.

So if I am reading correctly, the Mets’ decision to give David Wright 2 ABs during garbage time last season cost them ... NINE MILLION DOLLARS of insurance?

Mets!?!?!?!

 

Adam Starblind Posted: November 13, 2018 at 07:00 AM | 35 comment(s) Login to Bookmark
  Tags: mets

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   1. snapper (history's 42nd greatest monster) Posted: November 13, 2018 at 11:31 AM (#5786526)
So if I am reading correctly, the Mets’ decision to give David Wright 2 ABs during garbage time last season cost them ... NINE MILLION DOLLARS of insurance?

Mets!?!?!?!


That's how I read it. Unfathomably dumb.

They needed to settle with their insurer before he stepped on the field. If I'm the insurer, I tell they to go pound sand on the $9M.
   2. Barry`s_Lazy_Boy Posted: November 13, 2018 at 11:34 AM (#5786531)
Mets being Mets
   3. PreservedFish Posted: November 13, 2018 at 11:36 AM (#5786534)
I'm shocked that the 2 ABs weren't themselves part of a settlement.
   4. The Good Face Posted: November 13, 2018 at 11:39 AM (#5786537)
That's the kind of mistake you make when you lack the will to win.
   5. McCoy Posted: November 13, 2018 at 11:40 AM (#5786539)
Whoops.
   6. Don August(us) Cesar Geronimo Berroa Posted: November 13, 2018 at 11:46 AM (#5786544)
LOLMets
   7. Zonk is One Individual Posted: November 13, 2018 at 11:48 AM (#5786547)
This is just funny.

I've always wondered why I'm not rich and now I know... because I've never had the good fortune of meeting the Wilpons.
   8. The_Ex Posted: November 13, 2018 at 11:57 AM (#5786556)
I too assumed the Mets had an agreement with the insurer before Wright took the field.
   9. Howie Menckel Posted: November 13, 2018 at 12:23 PM (#5786583)
I don't know why I can't believe even the Mets might be this dumb, but I can't believe this story.
   10. Mudpout Posted: November 13, 2018 at 12:52 PM (#5786610)
I think the article's making two separate points, though, isn't it?

In terms of how much this cost the Mets, to me it reads like they lost out on the guarantee of 75% of Wright's salary for the first 59 games of 2019. I think that works out to about $4.1 million as opposed to $9 million.

The OTHER issue is that the Mets need to keep Wright on the roster to receive any insurance payment. All 60-day DLers are reinstated at the end of the season, so even if he hadn't played the September games he'd still be taking up a roster spot. The Mets options are to keep him on the 40-man all offseason, potentially losing a player via Rule V or some other roster crunch, or reach a settlement in which they don't have to go through the roster charade for two more offseasons. Not stated, but I have to assumed they lose the insurance money if they DFA him.

So initially the Mets were in line to have about $20.25 million of Wright's remaining salary covered by insurance before September. By playing him, they only have about $16.1 million guaranteed covered. What they're trying to do is find a compromise with the insurance company that lets them free up the roster spot at the sacrifice of some of that insurance money, estimated here at $10-$12 million. I think his September games cost the Mets leverage in terms of the total guaranteed payout, but they'd still be looking to make this compromise even without them. It'd just likely be for ballpark $15 million rather than $10-$12.
   11. asinwreck Posted: November 13, 2018 at 02:28 PM (#5786701)
Would the team have been better off had Madoff been majority owner? MLB would probably* have forced him to sell after the conviction.

*Steinbrenner caveat
   12. akrasian Posted: November 13, 2018 at 02:47 PM (#5786716)
Without those two games played, he wouldn't have played since game 47 of 2016. I'm not sure why they wouldn't have tried for insurance before now - or did they?
   13. snapper (history's 42nd greatest monster) Posted: November 13, 2018 at 03:00 PM (#5786727)
Without those two games played, he wouldn't have played since game 47 of 2016. I'm not sure why they wouldn't have tried for insurance before now - or did they?

they have been collecting. But the 2 PAs reset the 60 game "deductible". i.e. the insurance doesn't cover the first 60 days pay, after an injury. Since Wright was well enough to take the field, this is a "new" injury incident.
   14. Walt Davis Posted: November 13, 2018 at 03:22 PM (#5786756)
This was likely to be an issue once he started his "comeback." Insurance doesn't cover lousy play, it covers "too injured to play." Even if it's AAA, Wright taking the field raises the question whether he's "too injured to play." The fact he didn't hit during that time is evidence he couldn't play well, not necessarily that he couldn't play. Presumably most of this is covered in a few clauses here or there regarding rehab time in the minors. I don't have much respect for the Mets or lawyers but if a lunkhead like me raised this point in real time, even they must have a nit-picky lawyer around who would too.

I'd argue they should have come to an agreement with Wright. "David, we'd love to give you the farewell but it's gonna cost us $4 M (or whatever) if you take the field. Can we work something out?"
   15. Scott Ross Posted: November 13, 2018 at 03:46 PM (#5786782)
Maybe now the Bobby Bonilla jokes will finally stop.
   16. Greg Pope Posted: November 13, 2018 at 04:57 PM (#5786844)
This was likely to be an issue once he started his "comeback." Insurance doesn't cover lousy play, it covers "too injured to play." Even if it's AAA, Wright taking the field raises the question whether he's "too injured to play." The fact he didn't hit during that time is evidence he couldn't play well, not necessarily that he couldn't play. Presumably most of this is covered in a few clauses here or there regarding rehab time in the minors.

I wonder how specific the insurance contract is. Is Wright capable of standing near 3B with a glove on his hand and also standing in the batter's box? Sure. But so is Ron Cey and he's 70. If Wright played 3B in the minors but couldn't hit, then I'd think that insurance would cover it. Is it possible that Wright is completely healthy, but just fell off a cliff, a la Dale Murphy? Of course. But that can't be the default assumption.

However, insurance companies certainly know what they're doing (in their own best interests), so I would assume that all of this is covered in the contract.
   17. Mudpout Posted: November 13, 2018 at 06:37 PM (#5786923)
The issue is not that the Mets are trying to recoup the roughly $4 million in insurance money they lost for the first third of '19, or that they fear the remaining $16 million is in doubt due to the comeback. If no agreement is reached with the insurance company, Wright will go back on the 60-day late in spring training as soon as the Mets are able, and come the 60th game of the season they'll start getting the insurance money again.

What the Mets are trying to settle is that the insurance payments are dependent on Wright being under contract. During the regular season that means he lives on the 60-day, but come the offseason he has to be reinstated and count against the 40-man. If Wright retires he loses out on $27 million guaranteed, which is unpalatable to him. If the Mets outright release him they are on the hook for the whole $27 million, as they lose the roughly $16 million in insurance money they'll still be entitled to. The settlement they are looking for is to allow them to collect a chunk of the insurance money without having to use a roster spot on Wright. If the $10-12 million settlement estimate is to be believed, that means the Mets are valuing an extra offseason 40-man spot as being worth $4-6 million over the next two years, and is why the Mets are keen to settle it before the Rule V draft, when roster spots are particularly valuable.
   18. Never Give an Inge (Dave) Posted: November 13, 2018 at 08:55 PM (#5787015)
Yeah, the Mets probably should have negotiated something with Wright and/or the insurance company before his 4-inning farewell in game 161. But the additional revenue from that game was probably $500k+, assuming it turned a game which otherwise would have had 20-25k attendance into sellout.
   19. snapper (history's 42nd greatest monster) Posted: November 13, 2018 at 09:58 PM (#5787044)
The issue is not that the Mets are trying to recoup the roughly $4 million in insurance money they lost for the first third of '19, or that they fear the remaining $16 million is in doubt due to the comeback. If no agreement is reached with the insurance company, Wright will go back on the 60-day late in spring training as soon as the Mets are able, and come the 60th game of the season they'll start getting the insurance money again.

The issue is that losing $4M for a purely symbolic 2 PAs is dumb beyond comprehension. I'm pretty sure if they asked David Wright, "do you want a) 2 PAs, or b) to get paid $1M to manage for a day, he would have chosen b). And the Mets would have $3M extra.

The fact that they waited this long to address the 40-man issue also lends one to take the "LOL Mets" viewpoint.
   20. McCoy Posted: November 13, 2018 at 10:29 PM (#5787056)
I'm so sick of all these players like David wright and Albert Belle getting hurt, taking up roster space, and not retiring.
   21. Howie Menckel Posted: November 13, 2018 at 11:01 PM (#5787063)
I'm pretty sure if they asked David Wright, "do you want a) 2 PAs, or b) to get paid $1M to manage for a day, he would have chosen b). And the Mets would have $3M extra.

I was at that "symbolic" game, and from the look on his face, there is zero chance he would take "b."

I have never seen a happier athlete in all my life than Wright was that night - and I've attended a sporting event or a thousand in my time. 18+ months of rehab, and he seemed to have gotten to a point where he just made a bargain in his mind that if he could just step in the batter's box in CitiField for one more regular-season game in a Mets uniform, all of the adversity will have been worth it.

granted, that is separate from what was worked out across the board. the Mets made an extra six figures from that game, not sure if it was seven figures - but it wasn't $4M.

still, there is an indirect goodwill factor, too. do I think there are high-end corporate season ticketholders who got enough benefit from bringing a wealthy client to that game that it induced them to retain those tickets in 2019? absolutely.
   22. Adam Starblind Posted: November 14, 2018 at 06:48 AM (#5787086)
If Wright retires he loses out on $27 million guaranteed, which is unpalatable to him.


This is the other part I don't understand -- isn't he retired? If not, doesn't he have to try to rehab?
   23. Adam Starblind Posted: November 14, 2018 at 06:51 AM (#5787087)
The fact that they waited this long to address the 40-man issue also lends one to take the "LOL Mets" viewpoint.


Per my comment in my post, I have determined that the Mets fan equivalent of "LOLMets" is "Mets!?!?!?!!?"
   24. formerly dp Posted: November 14, 2018 at 08:35 AM (#5787109)
I feel like a ####### idiot right now for assuming they had this sorted out back in September...
   25. snapper (history's 42nd greatest monster) Posted: November 14, 2018 at 09:08 AM (#5787121)
I was at that "symbolic" game, and from the look on his face, there is zero chance he would take "b."

I have never seen a happier athlete in all my life than Wright was that night - and I've attended a sporting event or a thousand in my time. 18+ months of rehab, and he seemed to have gotten to a point where he just made a bargain in his mind that if he could just step in the batter's box in CitiField for one more regular-season game in a Mets uniform, all of the adversity will have been worth it.


Then he could have offered to renegotiate his contract to indemnify the Mets for whatever they lost from the $4M, net of extra ticket sales.
   26. Mudpout Posted: November 14, 2018 at 09:34 AM (#5787139)
Oh man, no inch given to the Mets these days, eh? In a season where ownership will probably be best remembered for throwing cancer-stricken Sandy Alderson under the bus and then hiring their best player's agent to replace him, sacrificing some insurance money to give Face of the Franchise David Wright the sendoff he (and seemingly the fans) wanted probably shouldn't be near the top of the "LOLMets" list. Going even further than what Howie said, giving fans a reason to feel good about cheering for the Mets might make the lost insurance money feel like an investment worth making.

As to the nuts and bolts of a settlement, I don't know the details of how negotiations between insurance companies and teams work, but it would probably be difficult to have a settlement officially in place in September. Any deal or settlement would likely be dependent on Wright making some kind of binding declaration that he'll never play again. Insurance companies have a reputation as being sticklers for details, and I feel like it'd go against their core business principles if the guy laces up and plays AFTER the insurance company agrees to a payout dependent on him never playing again. The insurance company had no incentive to waive that deductible before Wright's September appearances. From their point of view, worst case scenario their overall payout is lower than it would have been, best case scenario the eventual settlement is lower because the Mets have less leverage.

I think what'd be much more LOLMets is if they'd said Wright and Mets fans couldn't have the comeback because the insurance company was playing hardball, or that after 2 1/2 years of hard, earnest rehab the Mets would hardball Wright and make him essentially pay for his own testimonial game to offset insurance issues, or if they don't reach a settlement and keep him on the 40-man for the next two years. It's not like the Mets are likely to go on a spending spree with the insurance money, and at least in this case they're looking to use the roster spot. The Orioles kept Albert Belle on their 40-man for 3 years so as to get the full insurance payout, which I think looks much worse on a team.
   27. villageidiom Posted: November 14, 2018 at 10:05 AM (#5787166)
They needed to settle with their insurer before he stepped on the field. If I'm the insurer, I tell they to go pound sand on the $9M.
If I was their insurer and wanted to tell them to go pound sand, I would have recognized the finite time the Mets had to negotiate before he stepped on the field and used that as leverage to get the best return I could in negotiations. And it's likely the Mets wouldn't have seen any difference between that amount and the $9 million.

EDIT: In full disclosure, I work for an insurer. But I don't handle these kinds of contracts, nor do I even know if my employer handles this contract or others like it. I had nothing to do with this actual case.
   28. Zonk is One Individual Posted: November 14, 2018 at 10:15 AM (#5787173)
The Orioles kept Albert Belle on their 40-man for 3 years so as to get the full insurance payout, which I think looks much worse on a team.


The fans were waiting and hoping for one final hit-and-run attempt at trick-or-treaters...
   29. formerly dp Posted: November 14, 2018 at 10:34 AM (#5787184)
Hmmm...I'll go glass half full on this one with after Mudpout's post and say that ultimately $9M is nothing to have this situation finally resolved. Wright's contract has been hanging over them as a sort of wildcard every offseason, and it's good to have the certainty around it formalized. But of course, I have no confidence in Brodie to do anything smart with it, and will continue to assume until presented with other evidence that the Wilpons got smooth-talked into hiring someone completely unqualified for the gig.
   30. Mudpout Posted: November 14, 2018 at 10:45 AM (#5787193)
As he proved in an Arizona parking lot last spring, Belle doesn't need to be on the active roster to put on a show for the fans.

This is the other part I don't understand -- isn't he retired? If not, doesn't he have to try to rehab?


Well like in the Belle case, there's retired and then there's "retired". It was announced Belle had retired in 2001, but he kept drawing pay through 2003, with the Orioles collecting insurance money. When a player officially retires, they file retirement papers with MLB that voids their current contract while preventing them from signing with another team. If Wright files papers, he loses his remaining salary. If the Mets keep him on the roster, he likely wouldn't need to actively rehab, maybe just see a doctor regularly to satisfy the insurance company and confirm that he still has chronic spinal stenosis and doesn't feel physically capable of playing, maybe show up to spring training for a physical. But I doubt he'd have to put in any games at St. Lucie.

Also, the comeback didn't cost the Mets $9 million, more like $4 million as it stands right now, and while it might have cost the Mets leverage there's no saying how much it'll affect the final settlement figure, if at all. If Wright hadn't been able to make his comeback this year the Mets would still likely be looking to settle with the insurance company to get the roster spot freed up, which would mean giving up some of the insurance money anyways.

Edit: typo
   31. snapper (history's 42nd greatest monster) Posted: November 14, 2018 at 10:57 AM (#5787211)

Well like in the Belle case, there's retired and then there's "retired". It was announced Belle had retired in 2001, but he kept drawing pay through 2003, with the Orioles collecting insurance money.


Belle also sued to get his meal money paid when the team was one the road. He won.
   32. PASTE, Now with Extra Pitch and Extra Stamina Posted: November 14, 2018 at 11:11 AM (#5787222)
Won in court, or the Orioles just gave him the money?
   33. snapper (history's 42nd greatest monster) Posted: November 14, 2018 at 11:26 AM (#5787250)
Won in court, or the Orioles just gave him the money?

I think it was a MLBPA grievance in front of an arbitrator. The arbitrator awarded him the money.

Unfortunately, his DUI and indecent exposure cases dominate any web search about him, so I can't find a reference.
   34. billyshears Posted: November 14, 2018 at 11:42 AM (#5787286)
To get the formalities out of the way: The Mets are stupid and everybody on this message board is brilliant.

That being said, all of the points being raised here are obvious and none of the reporting in the article is new. The terms of Wrights insurance coverage have been out there for awhile. Anybody who gets all frantic one way or the other thinking that the Mets didn't fully consider the ramifications of Wright's ABs in September on the insurance coverage is terribly naive. Remember all of the hullabaloo last summer when the Mets were hemming and hawing about letting Wright play again? The Mets weren't doing that to screw Wright - they were figuring out the insurance aspect. There is nothing here to indicate that the Mets didn't either (a) cut a deal with the insurance company in September or (b) decide that the increased revenue and goodwill would sufficiently offset the lost insurance coverage.
   35. Hysterical & Useless Posted: November 15, 2018 at 01:40 PM (#5787949)
billyshears, haven't seen you around in an age! Keep your calendar open for softball next summer.

Howie, I wish I'd been able to make it to DW's last game. [Since I don't follow the news at all, I didn't hear about it until a couple of days after the announcement, and it was already sold out, with SRO tickets going for $150 or $200 dollars on resale. I'm not Sam M, I don't love David that much.] One of the few things the Mets have done right in their 60+ years is keeping him for his entire career. Glad that he got a nice going-away party.

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