Backstop

A backstop is a term used to describe a safety net, fallback option, or guarantee that is designed to prevent failure or to ensure a minimum outcome. It acts as a last-resort measure or support that can be activated if primary plans do not deliver as intended.

In finance and corporate contexts, a backstop refers to a commitment by one or more parties to purchase any portion of a new issue of securities that is not subscribed by other investors, ensuring the issue is fully subscribed. Underwriters or investor groups may serve as backstops. The arrangement may also include a line of credit or liquidity facility that can be drawn if needed.

In sports, the backstop is the barrier behind home plate in baseball and softball, typically a wall, net, or fence, designed to stop balls and protect spectators and equipment.

In politics, economics, and law, backstop denotes a contingency mechanism intended to secure a stable outcome if other measures fail. Examples include bailout guarantees during financial stress, regulatory backstops in market design, or transitional safeguards in international agreements intended to prevent unwanted outcomes, such as disputes over borders.

In energy and infrastructure planning, a backstop can describe alternative capacity or supply options that can be deployed when primary sources are unavailable, helping to maintain reliability and continuity of service.