Watching a young player develop into something great is one of the great joys of sports fandom. In a lull of bad sports – like the one Philadelphia is going through right now – sometimes it’s all you’ve got. But now, you can actually invest in one young budding star and try to make some money off of him.
Fantex is a company/service that allows you to buy shares of a player (by actually buying stock in Fantex, but tomato/tomahto) and get a return on your investment. They just invested in Maikel Franco – at $4.35 million for 10% stake – and you can buy into their share. Here’s how it actually works, via Ken Rosenthal (using Angels pitcher Andrew Heaney as an example):
Under the terms of the deal, Heaney will receive $3.34 million in exchange for 10 percent of all future earnings related to his brand, including player contracts, corporate endorsements and appearance fees.
The agreement is contingent on Fantex obtaining the financing necessary to pay the purchase price. The shares are not yet up for sale, and Heaney, his agents and Fantex officials cannot yet comment …
MLB was concerned about the possibility of such an agreement leaving Heaney vulnerable to exploitation by gamblers, but Fantex employs a screening process to weed out problematic investors, according to sources …
His earnings would need to exceed $33.4 million for his investors to realize a return. If Heaney is successful, he can cover a sizable percentage of that amount in arbitration alone and earn additional income in endorsements.
In Franco’s case those earnings would have to hit $43.5 million for returns to kick in (and even then it’s unlikely they’ll be big ones). More than anything, it’s an opportunity for athletes to promote their brand while giving fans a cool (though unlikely profitable) connection to them. You can set yourself up to buy some of Franco here.
Personally, he missed time with injury last year, almost got hurt the other day, and we Philly fans are in a rut. For that reason, I’m out.