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MLB goes to court over last year’s leaked team financial documents thing

Oct 12, 2011, 5:00 PM EDT

lawsuit gavel

Remember back in August 2010 when Deadspin posted a bunch of leaked financial documents from the Pirates, Rays, Marlins, Angels and other teams? And how it showed that no matter whether we think of a team as “rich” or “poor,” they all make gobs of money and employ all manner of fun accounting tricks to obscure the reality of the situation?  Yeah, that was fun.

Well, for us anyway. Not at all fun for an insurance company that Major League Baseball is taking to court because it won’t cooperate with the league as it tries to figure out who leaked that stuff:

In papers filed Oct. 7 in New York Supreme Court, the commissioner’s office wants Beazley Insurance Co. Inc. to show cause why it shouldn’t be required to produce records that could identify the source of leaks. MLB said Beazley refused to cooperate with baseball’s investigation into a story by The Associated Press, published in August 2010, and club documents posted by Deadspin.com, that same month.

Martin Klotz, a lawyer for baseball, said in legal papers that six insurers received the confidential financial information from teams and that all except Beazley cooperated with MLB’s investigation.

Hmmm, I wonder why they wouldn’t cooperate. I’m sure it’s principle. Yes, this is a stand in favor of liberty and information wanting to be free or some such.

  1. The Rabbit - Oct 12, 2011 at 6:02 PM

    Because I’ve been retired for some time, I had to look up Beazley. Didn’t know the company had changed its name.
    I don’t know what MLB asked Beazley to provide, but now that I know who it is I can give you the most likely business reason why they may not cooperate:
    The company’s stated own retention on specialty risks would in no way be large enough for it to insure MLB. This would require it to reinsure, either through Lloyd’s portfolios or other insurers. (Lloyd’s isn’t an insurance company in the traditional sense.)
    Files may have been sent out to a number of places. I suspect the company wouldn’t want to identify those companies or disclose its “treaties” particularly if its automatic reinsurance amounts are significantly lower than the other companies in this market. It would place the company at a very competitive disadvantage going forward.
    IF Beazley is not directly or indirectly responsible for the leaks, it’s going to have to make a business decision as to which position will do the least harm to the company in the long run.

  2. bigleagues - Oct 13, 2011 at 7:35 PM

    Yeah, yeah, yeah. Someone leaked the financials against confidentiality agreements and professional standards of conduct and such . . . but with the privilege of having an anti-trust exception but moreover the amount of public dollars that franchises receive for everything from stadium construction and infrastructure improvements to tax free loans and tax breaks . . . I think all financials should be made available for public review from time to time.

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