February 3, 2003  

MLB rule strikes out batmakers
Small firms unable to find $10M in liability insurance

By Pete Williams
Correspondent

Kevin and Tom Lane are willing to follow Major League Baseball's new regulations requiring bat manufacturers to pay an annual $10,000 administrative fee and buy $10 million worth of liability insurance coverage.

But the owners of Carolina Clubs, which supplies bats to more than 100 big leaguers and is the only Florida manufacturer, have found no insurance company willing to write such a policy for a Florida-based bat company. MLB has refused to grant an exception to its new rules.

"If they can't find coverage, they need to move to another state or find another business," said Jimmie Lee Solomon, MLB's senior vice president of baseball operations.

Until December, MLB's only requirement for manufacturers was that they produce bats from a single piece of wood. Citing increased liability concerns, a desire to be compensated for providing product exposure and a feeling that the number of approved bat companies — 48 in 2002 — was spiraling out of control, MLB officials implemented the new regulations.

That set off a firestorm of protest from several smaller bat manufacturers who suggested the new rules were inspired by officials from Hillerich & Bradsby Co., who in recent years have seen the boutique companies chip away at their dominant Louisville Slugger market share. Louisville Slugger is the official bat of MLB.

"They're afraid of us," said Sam Holman, whose Original Maple Bat Co. produces the "Sam Bat" favored by Barry Bonds and others. "They've given MLB a ton of money over the years and they'll do anything to preserve what they have. It's hard to ignore the fact that they've been the catalyst for all this."

Solomon and Chuck Schupp, director of pro baseball sales for Hillerich & Bradsby, said the company had nothing to do with the new regulations. Hillerich & Bradsby was one of just 11 manufacturers that met the Jan. 15 deadline to comply with the new rules. Carolina Clubs is one of four companies that have been granted extensions.

Kevin Lane , who with his brother has been producing bats in West Palm Beach for a decade following a brief minor league career, said he's exhausted all options in trying to meet MLB's insurance regulations, which call for coverage issued by "an admitted insurance carrier with an A.M. Best rating of A-8 or better."

According to Joy Merrill, an insurance specialist for the Florida department of financial services, obtaining property or liability coverage from admitted carriers has become much more difficult in Florida since Hurricane Andrew struck in 1992. Home and business owners often turn to non-admitted carriers, which are not part of the Florida Guaranteed Fund, which guarantees coverage to policy holders in the event a company files for bankruptcy.

Lane says he's contacted bat companies throughout the country for help, but none of their carriers will write a policy in Florida. His insurance agent pursued a suggestion offered by the commissioner's office but was turned down.

"We're willing to pay for a policy but we can't get one at any price," Lane said.

Holman, whose company is based in Ottawa, said he struggled to find coverage in Canada but was able to purchase a policy for $65,000 annually. Jack Kasarjian, president of Tuff bats of Westlake Village, Calif., said he begrudgingly paid $32,000 for coverage this year.

"I'm just afraid of what new rules they'll come up with for next year," he said.

Since few players have exclusive bat contracts, most swing several brands over the course of a season. Lane said 135 players, including Ryan Klesko of the San Diego Padres and Sean Casey of the Cincinnati Reds, swung Carolina Clubs last season.

"They make a good bat," said Padres' infielder Sean Burroughs. "It's nice to have a choice. I'd be disappointed if I couldn't use them anymore."

The Lanes' best hope for a resolution could be the MLB Players Association. A union source said the union would take issue with any change made by MLB that could affect player performance.

Frank Coppenbarger, Philadelphia Phillies equipment manager, said he dreads the prospect of telling players reporting to spring training this month that he no longer can order bats from certain companies.

"The last thing players want to hear about are new rules," he said. "They just want their bats."

In addition to Carolina Clubs, Solomon confirmed that an extension had been granted to the Glomar Enterprises of Fullerton, Calif. He would not reveal the other two companies that got extensions. Glomar officials wouldn't comment.

Bat manufacturers say they plan to pass along the increased costs to teams by raising bat prices. Holman said he plans to keep the cost of bats the same but will add a 10 percent premium labeled "MLB surcharge."

"I should call it the MLB larceny tax," Holman said. "At least this way clubs will know they have their own commissioner's office to blame."

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