Couch: Miles Bridges is a millionaire-in-waiting, thanks to insurance
EAST LANSING – The thousand or so Michigan State students and fans gathered around Miles Bridges, his family, Tom Izzo and Sparty last Thursday were in no mood for a killjoy.
So when Casey Harrison, a reporter from MSU’s student newspaper, asked a sobering question in the middle of their celebration — and just after Bridges’ family had arrived on stage for a makeshift press conference — fans grumbled. A few booed.
“Has it ever come across your mind to get an insurance policy?” Harrison asked.
Izzo rescued the moment. “Good question,” he said.
It was. An important one, too. Because amid the buzz surrounding the announcement of Bridges’ return to MSU for his sophomore season and the praise heaped on MSU’s star freshman for having the courage to make his own decision, there was an elephant in the room, so to speak — a “white elephant,” as Izzo would’ve called it.
Bridges was delaying about $2 million — given NBA draft projections and the rookie salary scale — and perhaps risking much more.
The risk, it turns out, isn’t what it seems or what it used to be.
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Bridges will be a millionaire. There is no risk he’ll be anything less. In large part, because he came along at just the right time. The insurance protection for top-flight NCAA athletes is better than ever, allowing a kid like Bridges, a kid who simply likes college, to follow his heart. Even three years ago, he might have had a more difficult decision.
Because not only have permanent total disability insurance limits been raised for premier college athletes, but the recent addition of loss-of-value insurance also protects Bridges from losing significant money in next year’s draft. Better still, MSU is now able pay the insurance premiums.
“He will get the maximum … the highest policy,” Izzo said last Thursday.
That’s $10 million through Lloyds of London for permanent total disability insurance, which he’ll collect on if he suffers a catastrophic injury and can never play again. That comes with a premium of $5,000 per million, according to MSU’s compliance office, paid out of the school’s Student-Athlete Opportunity Fund. Only since 2014 have colleges been able to use such funds to pay athlete insurance premiums.
The more pertinent insurance for Bridges, however, is the loss-of-value policy. Because with today’s medicine, there aren’t many basketball injuries that can’t be fixed to a playable level. And in 27 years of permanent total disability insurance being available, no MSU athlete with a policy — basketball, football or hockey — has ever suffered an injury that ends their career. That goes back to before doctors could truly fix a knee.
Loss-of-value insurance for top-tier NCAA athletes has only been around since 2015. It wasn’t available to MSU’s last basketball player in this situation, Gary Harris.
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Bridges’ loss-of-value policy is based on his estimated four-year rookie NBA contract. In Bridges’ case, if the NCAA’s NBA draft projections are similar to others — which had him around the No. 12 pick this year — he’d make about $9 million over four years, based on the 2016-17 rookie salary scale.
If he were to suffer an injury that caused him to slip to the No. 20 pick in next year’s draft, which would come with a contract in the neighborhood of $6.3 million over four years, the loss-of-value policy would cover a percentage of the difference, usually 50% to 60%. For Bridges, if he fell those eight spots in the draft, that would likely be about $1.5 million.
Again, the premium is paid by MSU’s Student-Athlete Opportunity Fund, this one at $3,000 per million.
According to MSU’s compliance office, this is 24-hour, worldwide protection. If Bridges is injured falling down the stairs or playing the Lansing Moneyball Summer Pro-Am, he’s covered. It doesn’t have to happen during an MSU game or practice.
Loss-of-value insurance is an important step. Because, three years ago, if a player in Bridges’ situation tore up his knee and recovered to the point that he played part of a season in the NBA at the rookie minimum — about $600,000 for an undrafted player — he’d never collect another dime.
When Bridges was toiling with this decision and then making his announcement, I couldn’t help but to wonder if there have been other kids over time who wanted to stay in college for another year, but couldn’t bear the risk. This mitigates that. It allows a player in Bridges’ realm to play college ball, knowing they’ve already taken care of their future and family to some extent. They are guaranteed to become a millionaire.
There is always some degree of risk. The money that makes your grandchildren wealthy comes with the second contract — like the $85 million deal Draymond Green signed two years ago and the expected $80 million contract Harris will sign this summer. But if a player suffered a career-changing injury as a rookie in the NBA, they’d never see that kind of money anyway.
Bridges isn’t likely to be the start of a trend — most true one-and-done college basketball stars actually want to be one year and done. But he’s an example of an athlete who was able to make a choice free from the stress that comes with thinking that staying in school is risking having your mother work another 20 years. That’s heavy stuff for a 19-year-old. For Bridges, the millions are already there. As soon as he’s done with college.
Contact Graham Couch at gcouch@lsj.com. Follow him on Twitter @Graham_Couch.