Cover Me

A showdown over player disability insurance nearly upends international soccer

It was an innocuous play, the type Arjen Robben had executed countless times in his professional soccer career.

As he dribbled toward midfield, the Dutch right winger took one long stride and attempted to pass the ball down the line with his left heel. It was a maneuver well within the skill set of one of the world's premier players. Yet, as he completed the pass, Robben pulled up and began to limp. There had been no shoulder charge, no slide tackle, no contact whatsoever when he back-heeled that ball. Still, the Bayern Munich star had ripped a five-centimeter hole in his left hamstring.

Player injuries are par for the course for professional soccer teams like Bayern Munich. But Robben wasn't playing for the club when he got hurt. He was playing for his country's national team in a friendly match between the Netherlands and Hungary prior to the 2010 World Cup in South Africa. Therein lay the problem.

The injury ultimately sidelined Robben for six months. And even though it occurred on the Netherlands' watch, Bayern Munich was left to pay the multimillion-euro salary of a player it could not use while he was healing.

Robben's footwork has landed him on the cover of plenty of sports pages throughout his career, but his misstep in that World Cup warm-up catapulted him from cover boy to poster boy.

Robben became the face ofand case for- insurance reform in the world's most popular sport.

His injury- and the subsequent handling of it- was a rallying point for clubs and brought to a head a longstanding controversy over who should be financially responsible for players while they are on national duty.

That conflict finally has been resolved.

After a winter of discontent, international soccer entered into a season of insurance reform as the sport's governing bodies changed the way athletes and clubs are protected. On May 25, the Federation Internationale de Football Association, the regulatory body of international soccer, announced it would take out a global insurance policy to cover players' salaries if they are injured while competing for national teams.

"This is a major breakthrough," Michele Centenaro, general secretary of the European Club Association, said. "It's a landmark decision."

FIFA's plan, titled the Club Protection Programme, will compensate professional football clubs up to euro7.5 million (US$9.4 million) to offset the salary of a player who is injured while competing for his national association.

The program provides cover for a temporary total disablement that is caused by an accident and lasts more than 28 consecutive days, according to details released by FIFA.

The CPP's maximum payout of euro7.5 million per footballer per accident is calculated on a daily rate of up to euro20,548, which is payable for a maximum of 365 days. Payouts are based on the player's fixed club salary, not including any bonuses, one-off payments, appearance fees and the like.

HDI-Gerling in Zurich will provide the insurance, with reinsurance through Hannover Reinsurance and Munich Reinsurance.

FIFA's cover begins Sept. 1, but extensions were added to include Euro 2012 - a tournament of European national teams this past June- and the London Olympics, which began in July and continue through Aug. 12.

The CPP will last through Dec. 31, 2014, thus offering protection through the 2014 World Cup in Brazil as well. The policy has an aggregate limit of euro60 million through the end of August, euro60 millionbetween Sept. 1 and Dec. 31, 2012, and euro70 million per annum thereafter.

In announcing the program at its annual conference in Budapest, FIFA described it as "a sustainable solution on a long-term debate between FIFA, the clubs and the member associations."

Calling it a debate is an understatement. The discontent between the European Club Associationwhich represents the most powerful professional clubs in the world- and FIFA reached a near boiling point last winter.

Liability was one of the main points of contention.

How It's Played

Soccer is structured such that elite players often compete for two teams- a professional club and a national team. Players are employed by and compete for pro clubs (for instance Manchester United) in leagues around the world. Many also play for their national team, representing their native country in international events such as the World Cup or the Olympics. The national teams are member associations of FIFA. The issue of who is liable for national team players has been a source of conflict between FIFA and clubs and a cause of tension between clubs and national teams. At the root of the problem was a feeling among clubs that the existing system was lopsided.

Historically, the entire financial burden for a player has fallen on the clubs, which have no choice but to release players to the national teams and no say over their players' training or treatment while they are gone. Yet the clubs have remained fully responsibility for their players' health care coverage and compensation.

It was an arrangement that, at times, bred resentment and eroded the relationship between clubs and national associations, particularly when a player returned injured from national team duty and was unable to play for his club.

"The feeling was that this was unfair and simply illogical," Centenaro said. "The clubs are providing players to national teams, which is perfectly fine and accepted. But the problem was, if the player got injured, the club could not count on that player anymore, they were continuing to pay the salary in full when they couldn't use the player and sometimes they also were obliged to replace the player.

"So there was a sort of triple effect. It was felt that, at least, this is the bare minimum to have an insurance policy where the moment he goes to a national team, he is fully covered for salary."

David Partner, an accident and health specialist for London-based broker Miller Insurance Services, said clubs often insure a player's transfer value- the fee paid to the player's previous team- but are unlikely to insure all salaries.

"The top five players are likely to be worth between £30 million and £75 million in transfer value, in say the top five teams in the league," he said. "So they're going to look to insure those guys, and they will take a hit on the guys who are worth only two or three million. They're more likely to take the gamble on lower value players because insurance is more expensive for a footballer than for individuals in other industries, for example white collar workers."

Other Coverage

While insuring a player's salary is at the discretion of each club, providing health coverage for released players is not. In its Regulations on the Status and Transfer of Players, FIFA clearly places that responsibility on the clubs, stating: "The club with which the player concerned is registered shall be responsible for his insurance cover against illness and accident during the entire period of his release. This cover must also extend to any injuries sustained by the player during the international match(es) for which he was released."

Though national associations have not been obligated to provide insurance, many have offered some level as a gesture of good will. That coverage has varied greatly, however.

Italy, for example, fully covers all medical expenses related to an injury suffered while on national duty, but it does not cover the player's salary while he is recuperating. Togo covers health insurance for only two events, the African Cup of Nations and FIFA World Cup, and limits that coverage to on-field injuries. Ireland, meanwhile, offers neither health coverage nor salary compensation in any instance.

England, however, has been hailed as the ideal. In a study released last summer, the Swissbased International Centre for Sports Studies suggested clubs, national associations and FIFA use the English Football Association as a best practice model.

"We have never been obliged to provide cover, but we have," FA spokesman Scott Field said. "We ensure all provisions are in place to insure all of our players."

To that extent, England offers full health cover and salary compensation for any player injured on national team duty. After the injured player returns to his club, the FA continues to cover his expenses while he recuperates.

"In this country, the national team takes an insurance on the player for the period during which they are on national team duty, for the value of each player," said Partner, whose firm does a large amount of sports business. "The national team is taking the player. It's possible that the player could miss half of a season because he got injured on national team duty, but the club team is still paying the player. So the national team has a duty to make sure the player's wages are covered. Otherwise the club is paying the player for an injury he sustained while playing for another team, which would be unfair."

That was the argument Bayern Munich made when Robben was injured. The German club was paying Robben euro5 million per year when he got hurt. He was the 31sthighest paid player in the world at the time, and yet he was sitting on the sidelines.

The circumstances immediately following Robben's injury added to the discord. Rather than being evaluated by Bayern Munich's medical staff, the Dutchman was evaluated by a doctor in his home country, who after a week of therapy cleared him to play in the World Cup.

Robben helped the Netherlands reach the World Cup final that July, but when it came to Bayern Munich's season he was of little help. During preseason training in August, Robben's hamstring flared up. Bayern Munich's club doctor examined the injury and found the hamstring was torn.

In what became a well-publicized case, Bayern Munich accused the Dutch national association of misdiagnosing Robben and allowing him to play injured. The tension escalated to the point that Bayern Munich CEO Karl-Heinz Rummenigge threatened to sue the Dutch for the salary costs it incurred during the six months it took Robben to recuperate. It became a rallying point for clubs.

"The frustration had been there for a long time," Centenaro said, "but that case made the headlines in the press and really clearly made the UEFA [Union of European Football Associations] and FIFA realize there was something wrong."

High Payrolls

The ECA, which is chaired by Rummenigge, campaigned for insurance reform. More than any other party, the ECA had a vested interest in restructuring the system. The organization includes the most wellknown teams- and some of the highest-paid athletes- in the world. It counts among its 201 members Manchester United (and the entire English Premier League), Real Madrid, FC Barcelona and Bayern Munich.

European teams have some of the highest payrolls in the sport. When Forbes released its list of the 10 highest earning soccer players this past May, all but one- David Beckham of Major League Soccer'sLos Angeles Galaxy- played for an ECA club.

Though Beckham grossed more than any other player, pulling in $46 million a year, the bulk of his earnings came off the pitch through endorsement deals. The 37-year-old English striker earned just $5 million from the LA Galaxy, which is significantly less than his overseas counterparts.

Futebol Finance, a Portuguese company that tracks the economics of soccer worldwide, compiles an annual list of the sport's top-paid athletes based on fixed club salary. In the most recent rankings, which included 2011 salaries, Beckham's wages were tied for 62nd place. Of the top 100 earners on Futebol Finance's list, 95 play for ECA teams.

Portugal'sCristiano Ronaldo, a forward for Real Madrid, topped the list with a salary of euro12 million per year. Lionel Messi, the superstar striker from Argentina, brings home euro10.5 million per year in salary from FC Barcelona. Spain's Fernando Torres, a striker for reigning Champions League titlist Chelsea, and the Ivory Coast'sYaya Toure, a defensive midfielder for Manchester City, both earned euro10 million in 2011. And England'sWayne Rooney, who plays for Manchester United, brought home euro9.5 million in salary last year.

With such hefty payrolls, clubs have a lot at financial stake each time a player steps on the pitch. And when a player steps on the pitch for another team and gets injured, it can become problematic, as it did with Robben.

"This wasn't just a problem for clubs," Centenaro said of the old system. "This put the national associations in a difficult situation because they were confronted with clubs that were complaining that they didn't do their work properly or complaining that they were not compensated back for this big loss. So there was a degree of tension."

A Solution

Last spring, with the Robben case still fresh in its memory, the ECA approached the UEFA and FIFA about the prospect of insurance reform. By January, the ECA and the UEFA had come to an agreement on the subject, with the UEFA announcing it would provide insurance cover for Euro 2012.

Tensions with FIFA, however, mounted. As per a cooperative agreement between the ECA and FD?A, clubs must release players to national teams for games listed on FffA's international match calendar. Upset with an international calendar it felt encroached on players' club duties- and with the issue of insurance still unresolved- the ECA declined an invitation by FIFA to join a March meeting regarding the release of players for national team matches from 2015 through the 2022 World Cup in Qatar.

The ECA's decision to skip the meeting prompted speculation that it may break away from FIFA when their cooperative agreement expires in 2014. The working relationship between clubs and FIFA appeared on the verge of breakdown. At the end of March, FIFA announced that clubs must release players for the London Olympics, which were not listed on the international match calendar and which overlap with preseason training for many European clubs. Along with that decree, however, FIFA also announced plans for a global insurance policy.

The policy would be voted on at its May conference in Budapest. On the closing day of its annual meeting, FIFA introduced the Club Protection Programme.

"With this program FIFA and ECA mark an important step of cooperation for the benefit of the entire football family in a spirit of dialogue and solidarity," FIFA said. FIFA estimated the cost of the CPP at $75 million.

But with that insurance policy, it also ensured a new level of harmony in the sport.

"The introduction of this insurance has relaxed everybody much more," Centenaro said.

"The clubs are satisfied with this agreement," Centenaro added. "I'm 100% sure the national teams are pretty satisfied with this agreement. This is a huge success. This always seemed to be something unreachable, but in fact, it came about. This new agreement is really a milestone."

PLAY ON: When Arjen Robben (i? orange) injured his hamstring playing for the Netherlands' national soccer team, it touched off a campaign for insurance reform in the sport. In May, FIFA announced it would take out a global insurance policy to cover the salaries of players injured competing for their national team. Coverage began this summer.

Key Points

* The Kickoff: Professional soccer clubs and FIFA were at odds over who should be liable for players on national team duty.

* Injury Time: The issue came to a head when a professional club was left to pay the multimillion-euro salary of a player who was sidelined for six months because he got injured while playing for his country's national team.

* The Final Score: FIFA took out a global insurance policy to cover the salaries of injured players.

"The introduction of this insurance has relaxed everybody much more. The clubs are satisfied with this agreement."

- Michele Centenaro, The European Club Association

Clubs often insure a player's transfer value (the fee paid to the player's previous team), but are unlikely to insure all salaries.

- David Partner, Miller Insurance Services