On Tuesday, we learned that Prince Fielder’s career has come to an end following his second major neck surgery in just the last three years. Jeff Sullivan provided a fitting eulogy for Fielder’s career a couple days ago. While the news is certainly devastating for Fielder on a personal level, this post concerns another matter — namely, the potential financial implications of Fielder’s injury, both for the Texas Rangers and Fielder himself. At the heart of the matter: the nine-year, $214 million contract Fielder signed in 2012, a deal that guarantees him another $24 million annually from 2017 through 2020.
For starters, it’s important to note that Fielder is not officially retiring from baseball, but rather has been declared medically disabled and therefore is no longer considered to be physically able to play the game. This is an important distinction legally, because had Fielder voluntarily decided to retire, then he would have forfeited the roughly $104 million remaining on his contract. Instead, by being declared medically unable to play, Fielder remains entitled to the full amount he’s owed under his contract.
Because Texas reportedly has an insurance policy covering his contract in the event of injury, the Rangers will not be on the hook for the entirety of the team’s remaining financial obligation to Fielder. Instead, the club will apparently only be responsible for paying Fielder $9 million per year from 2017 to 2020, with the rest of his salary covered by the team’s insurer (who will reportedly contribute another $9 million per year) and the Detroit Tigers (who are on the hook for the final $6 million per season, based on the terms of the trade that brought Fielder to Texas in exchange for Ian Kinsler in 2013).
That having been said, although the precise terms of the Rangers’ insurance policy are not publicly available, it appears likely that this $9 million in cost savings will not come without some strings attached for the club. Moreover, it’s also possible that the team’s insurance company could still yet find a way to avoid paying some or all of its share of Fielder’s contract.
Read the rest of this entry »