Skip to main content

Business insurance based on sporting results

Last year during the Rugby World Cup, a few people with little understanding of modern business practices were surprised to learn that nations such as Australia had 'bet' on their success by way of sports insurance firms. This is very common in professional sport with virtually every athlete having some type of performance bonus in their contract. Win a tournament, break into the top 10, qualify for the Champions League etc. - sometimes they are personal bonuses, other times they are major windfalls for the club. Imagine how much Chelsea money will 'lose', or more correctly, not receive, from not qualifying for Europe this season. Accountants run businesses these days, and they hate volatility. Just look at bookmakers moaning about results. The actual bookmakers understand this is part and parcel of the betting industry, but the bean counters and shareholders despise them.

This not only affects players and clubs, but sponsors and businesses linked to the sport. Danny Willett's sponsors would have received great exposure out of his recent Masters win, but it's highly likely they had to stump up a big wad of cash to the player as well, as part of a performance-loaded contract. One contract bonus deal which did hit the headlines was Lance Armstrong vs. SCA Promotions. Armstrong's contract was loaded with bonuses if he won the Tour de France, and his team had to insure the bonuses, as per his contract. The insurance firm refused to pay out, citing evidence that Armstrong had doped. Armstrong took SCA to court and won, the first time around. Once Armstrong was exposed for being a serial cheat by USADA, SCA returned fire and got their money back. They are several of these sports insurance firms around, but unless you are involved in the trade, it's unlikely you'd have heard of them. You will have heard of Wimbledon having rain insurance during The Championships, and retailers such as Curry's paying bonuses to customers depending on the success of England at the World Cup. These are sports insurance deals; it's nothing new but it is starting to have wider ramifications in the business community.

Imagine you own a pub this summer and most of your business is during live sport, particularly football. How much do you think your revenue would differ for the month of the tournament between England making the final and England bombing out in the group stage? It'd be a massive variance and you'd have already committed to the overheads - TV and sound upgrades, decorations, promotions etc., before considering the staff costs, which you might be able to minimise.

Siepe Sports allows businesses to insure their event-based trade against poor performance, and thus loss of revenue, by paying a premium.

From Inapub magazine, April edition, p46.



Don't be caught out by circumstances you can't control, insure your business against poor England sporting performances and keep your accountant happy!

For information, the founder of Siepe Sports is a close friend of the author and no sponsorship benefits have been received in return for this post

Comments

Popular posts from this blog

lay the field - my favourite racing strategy

Dabbling with laying the field in-running at various prices today, not just one price, but several in the same race. Got several matched in the previous race at Brighton, then this race came along at Nottingham. Such a long straight at Nottingham makes punters often over-react and think the finish line is closer than it actually is. As you can see by the number of bets matched, there was plenty of volatility in this in-play market. It's rare you'll get a complete wipe-out with one horse getting matched at all levels, but it can happen, so don't give yourself too much risk...

The Melbourne Cup preview 2019

We're back again for the greatest race on turf, the world's richest staying race and the only race in the world which creates a public holiday for millions of locals.




Once again a fine international field has been assembled and it's worth a deep look at the race. So get a cuppa and find a comfortable seat to plough your way through my preview!

--------------------------------

The Lexus Melbourne Cup
Group 1, Handicap, 3200m
AUD 7,750,000
Flemington 1500 local, 0400 GMT
Broadcasters - Network 10 (AUS), Racing.com (worldwide), SkySportsRacing (UK)


1. Cross Counter
Trainer - Charlie Appleby (one previous Cup win)
Jockey - William Buick
Breeding - Teofilo - Waitress
Drawn 5, Weight 57.5kg

Last year's impressive winner who doesn't get the 3yo weight advantage this time. Won first up at Meydan in March but has run fourth, third, fourth in the big set weights staying races in England and Ireland, never quite making it as the next big staying star. While running close behind Stradivar…

Westow Stakes - York 16/5/19

The sun was out for a glorious opening day of the meeting, and races down the straight appeared to have no concerns about draw bias. Thursday's card has a few higher profile races but this 3yo sprint is worth watching closely, tomorrow and for future form.



British Stallion Studs EBF Westow Stakes
£50k, Listed & Class 1, 3yo, 5f
York 1605

Soldier's Call - flying machine, winning four of six starts in Britain last season, running third in the Prix L'Abbaye, beaten a neck at WFA then finished sixth as joint favourite in the BC Juvenile Turf Sprint. Has plenty on these on ratings, but life's rarely that simple with unexposed 3yos early in the season.

Broken Spear - more exposed than most of these and well beaten by Garrus first up. Missed Chester last week, probably due to the rain (or a poor draw). Pass.

Charming Kid - won at this meeting last season but has been a little erratic ever since. Well beaten on AW Championships Day, appears to be a few lengths off these.

Garrus -…