Fantex Brokerage Services announced on Thursday that it will have an initial public offering for Arian Foster.
Fantex is paying $10 million for a 20 percent stake in Foster's future income, including contracts, endorsements and other related business revenue.
"Fantex is bringing sports and business together in a way never previously thought possible," CEO Buck French said in a statement. "By building a marketplace that allows customers to buy shares in a tracking stock linked to the value and performance of an athlete's brand, Fantex is enabling a new level of brand advocacy through ownership."
It is more like they are trying to start some sort of professional athlete stock exchange.
As long as it doesn't turn into 3rd parties owning and "controlling" the future of the athlete it could work. But all you need to do is look at soccer to see the negatives of "investors or third parties" having a stake in an athlete's future.
The Transfer Market of international soccer is a mess and no where near the same kind of compensation of Football, but all you need to do is look at Neymar's transfer issues because some 3rd party owned a percentage of him and the stopped several potential transfers because they wanted so much money to okay the transfer and Neymar's agent(his father) and his club at the time Santos wanted to keep the normal amount of money they would've received without the outside parties involvement.
Imagine the chaos it could cause in the NFL or any other major sport if fans or outside "investors" could tell players like Foster that he had to ask for a trade or to wait for a higher offer, or an offer in a different market like NY for higher marketability of endorsed products(think Eli's reported motivation for forcing the trade from SD).
Originally posted by GameOver:
It's absolutely ridiculous, IMO
The hilarious part is that they gave him $10m for $20 percent of his future income. He is scheduled to make about $18million over the next 3 years. So they'll only get roughly $1mill per year.
He is already 27 so he'll be at he proverbial end of the road for an RB. We'll see what the Texans offer him as an extension in the next few years but even including Arian's endorsement deals I don't see them getting a return of investment on this for a very long time.
Since I don't want to bother reading up on the exact details, maybe they'll make money every time someone purchases his "stock" but I'm just laughing about it.
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