Major League Baseball and all 30 teams are suing their insurance providers, citing billions of dollars in losses during the 2020 season, played almost entirely without fans due to the coronavirus pandemic.
The suit, filed in October at the California Superior Court in Alameda County and obtained on Friday by The Associated Press, says providers AIG, Factory Mutual and Interstate Fire and Casualty Company refused to pay the claims made by MLB despite the league’s ‘total risk’ policy purchases.
The league claims to have lost billions of dollars in unsold tickets, hundreds of millions in concessions, tens of millions in parking lots and millions more in suites and luxury seat licenses, park merchandise sales and corporate sponsorships. He also cites more than a billion dollars in losses in the local and national media, as well as tens of millions in lost revenue for MLB Advanced Media. It says that all these losses must be covered by the policies.
The MLB stopped spring training and postponed the start of its regular season in March, and then started a truncated schedule in late July, during which fans were barred from entering the stadiums. Teams were limited to 60 regular season games, compared to 162. Most postseason games were played without fans, although there was limited capacity of around 11,000 per game for the National League Championship and World Series in Arlington, Texas .
“Due to COVID-19, Major League Baseball entities, including those of the 30 major league clubs, incurred significant financial losses as a result of our inability to play, host fans and conduct normal business operations for much of the 2020 season. “the league said in a statement to the AP. “We firmly believe that these losses are fully covered by our insurance policies and are confident that the court and the jury will agree. ”
Messages requesting comments were not immediately returned by insurers.
More than 1,400 lawsuits have been filed against insurers regarding pandemic-related business interruption claims, according to data compiled by the University of Pennsylvania’s Carey School of Law. This includes several similar lawsuits from minor league baseball teams, whose season was completely overturned when baseball commissioner Rob Manfred canceled it.
At least one of these minor league cases, filed in Arizona and led by Chattanooga Observers, has already been closed due to a virus exclusion from politics.
In many cases, insurers insist that financial losses caused by the coronavirus do not constitute physical loss or damage to property. The MLB claims that the virus has led to both.
“The presence of coronavirus and COVID-19, including, but not limited to, droplets or cores of coronavirus on solid surfaces and in the air on the insured property, has caused and will continue to cause direct physical damage to physical property and ambient air on the premises , ” says the suit. “Coronavirus, a physical substance, attached and adhered to the Claimants’ property and, in doing so, changed that property. This presence also directly resulted in the loss of use of these facilities. ”
Many teams have dismissed frontline staff in response to the pandemic, and many are predicting a low season for free agency players. Several clubs have already dismissed top players as a way to save money, even when the Cleveland Indians declined a $ 10 million All-Star club option three times Brad Hand and the Chicago Cubs failed to offer a contract for popular slugger Kyle Schwarber, allowing the 2016 World Series champion to become a free agent.
The MLB did not say whether spring 2021 training or the regular season would start on time.