You buy insurance to cap your potential expenses. I think he should still take out insurance every year, but he can lower the limit to reduce the premium. So, instead of buying a $6.25 million limit like he did this year, he might buy a $4.5 million limit for next season.
Lol no. A bad deal is still a bad deal, even if you only buy 70% of it.
I guess you haven’t been watching the intense scrutiny on the AD P&L. Dave has to continue to show a declining deficit so understanding your potential expenses before the year starts is very important. There can be no more Ollie financial surprises.
Some poor nebbish actuary probably got canned for this.
Fully aware of that scrutiny, and the financial stress on UConn.
It’s about as close to gambling as you can get. Insurance is supposed to be about pooled risk, but somebody 2-1 odds.
Partially disagree on positive financial surprise. It’s a future positive value. In the current year, the school doesn’t make anymore money? So i think it’s an expense on the current balance sheet that will be reported on when some media does a freedom of information act. And will show a bigger deficit by paying out the bonuses. If you buy this “insurance” every year you’re reducing the volatility of the budget, Even if it’s for a bad price. Maybe losing money in the long run (all insurance is expected to lose money or else the company wouldn’t have a profit built in and a desire to sell it) but knowing exactly how much you need to pay to do so rather than any surprises. And then UConn makes money on the back end from increased ticket sales and tournament shares over the next several years.
DB is trying to pat himself on the back lol ... it's how the news works.
If you think 80% of the bonuses are essentially guaranteed and you're actually paying a few hundred thousand to save a few million then the idea makes more sense.
Very true.
That’s the ultimate question. What is the break even point? If it’s sweet 16 maybe it always make sense to have. If it’s final four maybe it’s not.
