By JOSHUA CLIFTON, a Chicago-based writer who covers workers' comp and disability issues
While the battle over California's cumulative trauma statute has thus far remained firmly planted in the National Football League's turf, other professional sports organizations are keeping a close eye on the issue.
"This is not really limited to the NFL," said insurance broker Robert Murphy, global sports and events practice leader at Marsh in Philadelphia. "To be as blunt as possible, unless the workers' compensation provisions in California are changed, this has ramifications for every professional sports franchise and league that exists today."
Awareness of the problem among the other "big four" professional sports leagues--Major League Baseball, the National Hockey League and the National Basketball Association--is beginning to pick up steam.
Yet these organizations, said Alex Fairly, senior vice president for insurance brokerage at Willis in Amarillo, Texas, have yet to experience the explosion in cumulative trauma claims and quantity of legal activity as seen in the NFL.
That doesn't mean that these leagues are in the clear. Far from it. Circumstances could potentially elevate the problem within these organizations to the level seen with the NFL or beyond.
For example, while a professional football franchise may only have to be concerned about the 55 players on its roster, each professional baseball team--with its myriad of minor league associations--employs 250 players at any given time.
According to Murphy, who represents more than 50 sports franchises in all four major leagues, the physical nature of the hockey world should also raise concerns for the NHL.
"The NHL has a similar concussion issue, but not quite to the extent of the NFL," he said. "If these dementia claims are ruled work-related, this will certainly have an impact on the NHL."
While the big four may have the personnel, legal expertise and financial reserves to formulate a strategy to combat claims in California, smaller professional leagues don't have the luxury.
CASE IN POINT: ARENA FOOTBALL
Founded in 1987, the Arena Football League suspended operations in 2008, citing budgetary problems and mounting debt. After canceling the 2009 season, the AFL went into Chapter 7 bankruptcy liquidation before re-emerging as Arena Football 1.
The new organization purchased the AFL's assets, including the team names, and reconfigured the league with an eye toward long-term economic viability. Murphy said that this entailed rolling the previously individually owned franchises into a single entity responsible for managing all expenses, including workers' comp, on a leaguewide basis.
John Master, former executive vice president and general counsel for the AFL, said that concerns over the California cumulative trauma claims issue played a major role in the way the league was restructured.
"If you look at the reconstituted AFL, there are no teams located in California," said Master, currently senior vice president for legal and business affairs of Madison Square Gardens' sports operations in New York City. "While I am no longer involved with the league, I can say with some certainty that it was a calculated decision that had much to do with California's workers' compensation laws."
Is it possible that the NFL could take a similar path if the cumulative trauma trend continues to escalate?
If the state's workers' comp statutes are upheld and dementia claims by retired players are ruled work-related in the Wenzel case, Murphy said, then the real issue is going to be: What are we going to do about California?
"I'm not suggesting that anyone in the NFL is saying we're not going to be in California, but they've decided that they need to aggressively challenge these claims now so they don't get put in the position of making some really challenging decisions that affect the ongoing viability of the league," he said.
November 1, 2010
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