MLB Franchises Suing Insurers Over Lost Ticketing Revenue
Major League Baseball and all 30 of its franchises have filed a lawsuit against their insurance providers, citing billions of dollars in losses due to pandemic-related bans on fans attending games. The lawsuit was filed in October in California Superior Court in Alameda County, California. It was initially reported earlier in December by the Associated Press.
Providers AIG, Factory Mutual and Interstate Fire and Casualty Company have refused to pay claims made by MLB and its teams, in spite of losses that should have been covered by “all-risk” policies held, the lawsuit alleges.
Losses claimed in the lawsuit include billions of dollars on unsold tickets, as well as hundreds of millions on ancillary revenue generated by fans coming through the turnstiles. The league says that all of these losses should have been covered by policies that have not been honored by the insurers.
“Due to COVID-19, the Major League Baseball entities, including those of the 30 major league clubs, have incurred significant financial losses as a result of our inability to play games, host fans and otherwise conduct normal business operations during much of the 2020 season,” the league said in a statement to the AP. “We strongly believe these losses are covered in full by our insurance policies, and are confident that the court and jury will agree.” .
Insurers have been targeted by numerous lawsuits over payouts clients claim were wrongfully denied in the wake of the pandemic. The defense mounted in such suits often posits that financial losses caused by COVID do not constitute physical loss or property damage, but MLB argues that the virus has led to both.
“The presence of the coronavirus and COVID-19, including but not limited to coronavirus droplets or nuclei on solid surfaces and in the air at insured property, has caused and will continue to cause direct physical damage to physical property and ambient air at the premises,” the suit says. “Coronavirus, a physical substance, has attached and adhered to Plaintiffs’ property and by doing so, altered that property. Such presence has also directly resulted in loss of use of those facilities.”
Major League Baseball had its entire 2020 campaign upended due to the coronavirus. Teams were at spring training facilities in March when the virus shutdowns began across the globe. Opening day was postponed indefinitely, with the league eventually instituting a truncated schedule beginning in the middle of the summer. No fans were allowed at stadiums throughout the regular season, and were only approved for some of the postseason.
The 2021 season schedule has yet to be finalized, as COVID closures continue across the country.