Butt, who tore his ACL in the Orange Bowl against Florida State, has a $2 million loss-of-value policy that he started collecting insurance on when he wasn’t picked in the top half of the third round Friday night.
He first started collecting, at $10,000 a pick tax-free, in the middle of the third round, a source with knowledge of the policy with ISI told ESPN. Through the 141st overall pick near the end of Round 4 on Saturday, Butt was set to receive $500,000 on the policy.
The 2016 Mackey Award winner for the best tight end in the nation, Butt suffered a second torn ACL in the Orange Bowl. The subsequent surgery prohibited him from showing teams what he could do.
Butt took out a $2 million total disability policy with a $2 million loss-of-value policy attached before the start of the season. The loss-of-value rider cost roughly $25,000, a source said.
Through the first three rounds, six tight ends have been drafted: Alabama‘s O.J. Howard (No. 19), Ole Miss‘ Evan Engram (23), Miami‘s David Njoku (29), South Alabama‘s Gerald Everett (44), Ashland‘s Adam Shaheen (45) and Florida International‘s Jonnu Smith (100).
Loss-of-value policies have gained popularity over the past five years. The players who have most famously collected from their draft stock falling have been Oregon‘s Ifo Ekpre-Olomu, who made $3 million in insurance after tearing his ACL and dropping to the seventh round in 2015, and Notre Dame‘s Jaylon Smith, who collected $850,000 from his fall to the second round after teams passed on him following ACL and MCL tears. Both policies were also with ISI.