Bundesliga side Borussia Dortmund is using an "unusual insurance policy to recover most of the income it is losing for failing to qualify" for the Champions League for the first time in five years, two people with knowledge of the arrangement said, according to Duff & Jones of BLOOMBERG. Germany's only publicly traded football club is in the third year of an insurance contract that "protects against lost revenue from missing the tournament," the sources said. The deal has about 12 underwriters led by Catlin Group Ltd. and XL Group Plc., they said. UEFA said that Dortmund, which had revenue of $279.6M in the fiscal year ended June 30, received €34.7M in prize money for reaching the quarterfinals last season. Only three team execs were aware of the insurance policy, "a requirement from the providers" to prevent coach Jürgen Klopp and his players from giving up on finishing high in the league. London-based Sportsrisq Capital Ltd. exec Tom Mitchell said that such cover, banned by English football as a "guard against match-rigging," is becoming sought-after by execs at elite clubs in other European countries. He said that it is "akin to airlines hedging on oil prices." Mitchell: "It's becoming a hot topic. Like any business, shareholders and owners need to be protected against risk." Dortmund took out the policy in '12, when the team won its second straight Bundesliga title. The policy was "renewed for a third time before this season." HCC Specialty Managing Dir Philip Hall said that some insurers "are uneasy about providing cover to clubs." Hall: "The moral risk can be significant if a club goes to the market looking for insurance against future negative performance. The question we'd ask would be: Why are you doing this? What is their motivation?" (BLOOMBERG, 4/22).
