Buy a Stake in Professional Athletes
Forget fantasy football, there is a new Wall Street way to make money off professional athletes. San Francisco based Fantex has launched an all-new marketplace that enables investors to buy and sell stock based on the value and performance of a professional athlete’s brand.
The first tracking stock will be linked to Houston Texans running back Arian Foster, which will mark the company’s IPO. Fantex is acquiring a 20% minority interest in the future brand income of Foster for $10 million. Investors will be able to place reservations for shares in Fantex Arian Foster IPO in approximately two weeks.
“Fantex is a unique opportunity for investors because for the first time, people can now invest real money in a stock linked to a pro athlete,” said Buck French, Fantex Holdings Co-Founder and CEO. “We started the company with the belief that there is a powerful way to help build the brand of athletes in celebrities.”
The value of an athlete’s brand is determined by player contracts, appearance fees and endorsements.
Arian Foster signed a five-year, $43.5 million contract extension with the Texans last year. The three-time Pro Bowler has endorsement deals with Under Armour, Kroger Texas, Gamebreaker Sports, Health Warrior, Pro Player Merch and ProCamps.
“We have created a stock that allows investors to have ownership linked to the value and performance of an athlete brand, and we believe this gives people a level of advocacy that's never existed before,” said French.
And while Fantex’s new marketplace could be a breakthrough investment opportunity; it is important for investors to understand the high-degree of risk involved. The Form S-1 filed with the SEC on Thursday, Fantex warned that injury, illness or medical conditions may affect the cash received by the company under the brand contract.
But if all goes well with Arian Foster’s IPO, Fantex hopes to add more athletes and extend offerings beyond the world of sports.
“Fantex’s goal is to enter into additional brand contracts in the months ahead across the world of sports, and into the entertainment industry as well,” said French. “At this time we have not signed any other brand contracts.”