Questions About the NFL Concussion Settlement

The NFL anounced a settlement with the 4,500 players who had sued over damages from head trauma. The settlement amount is $765,000,000, or $170,000 per player. That is the simple arithmetic of the settlement, but there is other language that raises more questions. For example, there is a individual cap of $5,000,000 per Alzheimers case, $4,000,000 for each chronic traumatic encephalopathy case, and $3,000,000 for each case of dementia.  This means that for one case of Alzheimers, soaks up the pool amount for 29 players. If there are 5% Alzheimers cases out of the 4,500 players, or 225 such cases, and each case soaks up only 20% of the cap, or $1,000,000 dollars, a reasonable number, I am told by those who know about this stuff, $225,000,000 of the settlement pool is gone with only 225 players paid. The same can be said for chronic traumatic encephalopathy, say 1% of the players are diagnosed and treated for that malady, or 43 players, $176,000,000 is gone. For dementia, and I have seen players with dementia, so that can’t be uncommon. let’s be conservative and say another 1% or 42 have that diagnosis, another $126,000,000 is gone. By simply estimating the number of players who contract the three named afflictions where damages are capped, $527,000,000 of the $765,000,000 pool is used up by 310 players.

This means that the pool is to be managed by a bank and interest earned. At 3.5% interest, the pool will double in 20 years, but there will be deductions to compensate injured players, so the pool will diminish. The NFL is very smart and has employed actuaries to estimate the incidence of the named maladies as well as the other injury and mental syndromes that may occur. They are betting on a lower incidence than the conservative estimate I made above. There is also the question of the claims processing system. Are claims simply paid on diagnosis, a pure liability system or can the NFL examine the player to determine the NFL’s percentage of fault compared to high school, college or non-sports related activites, or even past substance abuse? A hearing would determine the percentages that would then limit NFL liability. I don’t know what sort of methodology will be used, but given the numbers, some sort of limiting technique is implied by the settlement

This is the end of the case for 4,500 player/plaintiffs, but future plaintiffs may arise with the same symptoms. To avoid or, at least, limit these claims, the NFL will give each player a document indicating that playing football carries with it the risk of Alzheimers, chronic traumatic encephalopathy, and dementia, as well as other long term, debilitating conditions. This means that the players, having been warned, assume the risk of playing football and assumption of risk is a perfect defense in tort claims.

The concussion case settlement will pay injured players, but the NFL admits no fault. It does end a problematic class action lawsuit and subsequent remedial actions may prevent them in the future. Whatever you think, you have to admit the NFL is very good at handling its problems.