Every year at the NFL draft you can count on the storyline of that one prospect who is losing millions of dollars each time Roger Goodell comes to the podium and announces someone’s name other than his. We saw it with Matt Leinart. We saw it with Aaron Rodgers. And odds are we’re going to see it again with one of the star prospects in this year’s class.
But not necessarily quarterback Teddy Bridgewater.
Bridgewater, who at one time was pegged as the favorite to go number one overall, decided to forgo his final year of eligibility and enter the NFL. However, the once surefire pick has been free falling down mock draft boards in the weeks leading up to the draft.
While the Louisville product hopes to be among the first taken in a month, he is financially protected if he drops out of the first round, having taken out a $5 million loss-of-value insurance policy. The safeguard cost him a $20,000 premium, and is believed to be triggered if he falls beyond the top 11.
Estimates show the money lost for a player picked 3rd (where Bridgewater has been projected), and 33rd (3rd pick in the second round), is $15 million. So while Bridgewater wouldn’t be unable to recoup the entire sum lost, he would regain approximately a third of the amount, provided he can cite an injury as the reason for the poor pro day performance that has led to his decline in value.
Many young stars, such as Jadaveon Clowney, have taken out insurance policies for potential loss of earnings due to serious injury or total disability, but this is the most high profile case of a player attempting to hedge his bets with regards to the draft board.
It’s interesting to consider how policies like these could alter the decision-making of future college juniors and third year sophomores in similar positions as Bridgewater. This might offer the financial protection a prospect needs in order to comfortably forgo the remainder of his college development and enter the draft when his value is the highest. Frankly, a loss-of-value policy seems best suited for an athlete like USC’s Matt Barkley, who declined entering the draft after a stellar junior year, only to see his NFL stock plummet the following season due in large part to a shoulder injury.
We’ll find out next Thursday at the NFL draft whether or not Bridgewater will need to pursue collecting on this policy, but loss-of-value policies seem to be a viable option for future top prospects.