Imagine supporting a club that has a good chance of winning a grand final and starting a thread about insurance.
Thread title includes the words "payments that people still don't understand" and "Essendon trade moves"
What the hell is “insurance compensation”?
Replace the word "compensation" with "money". In this case, insurance compensation is the insurance settlement - money paid to Essendon players outside the salary cap, under the Essendon Football Club's insurance policy
what's not to understand?
Seems there are many that still don't understand, or maybe some just like to muddy the waters.
So perhaps another scenario (merely to illustrate how the salary cap is compromised).
- Hawthorn President publicly slanders Mitchell, O'Meara and Sicily
- Mitchell, O'Meara and Sicily sue Hawthorn Football Club for defamation
- Hawthorn Football Club's Insurance company has to settle claims against Hawthorn Football Club
- Negotiated settlement provides $2 million each for Mitchell, O'Meara and Sicily - outside the salary cap
- Within a month Mitchell, O'Meara and Sicily negotiate extended contracts with the club - inside the salary cap
Heppell, Hooker and the other Essendon players were paid large sums under the Essendon Football Club's insurance policy, and outside the salary cap. Now Essendon to have a lot of extra cash to outbid others and trade in additional talent.
Returning to my point : Insurance compensation paid to players who continued at the Essendon Football Club surely should have been included in the cap. To do otherwise has given Essendon a huge advantage during trade period for the next few years.