Interesting concept though.
Houston Running Back Arian Foster Is Going Public at the Perfect Time
When I read that headline I thought maybe he was coming out as gay or something. Nope.
If I read the article right, this means all future earnings, not just his salary as a football player. If he gets paid for endorsements or becomes a coach or a talking head on TV, those earnings count too.Arian Foster, a running back for the Houston Texans, is a rarity in the NFL. He hustled his way to stardom through the practice squad after being spurned by every team in the draft, becoming one of the highest-paid athletes in the country while doing so. Foster seems rare in another way, as well. Now that he’s reached the top, he’s placing a multimillion dollar bet that he’s overvalued by the public. He’s probably right.
On Thursday the New York Times reported that Foster would be the first athlete to go public through a new company called Fantex Holdings. Fantex has established a market in which people can purchase and trade shares of athletes’ future earnings, in a sort of stock market for jocks. The company has persuaded regulators that this counts as investing, not gambling.
As of today, anyone over the age of 18 can buy stock in Foster, claiming a stake of his future earnings in increments as low as $50. Fantex is selling $10.5 million worth of stock, which represents 20 percent of Foster’s future earnings. The company takes $500,000 in fees and gives $10 million to Foster. To oversimplify a bit, Foster ends up ahead on the deal if he makes less than $50 million from this point on.