Fantasy-Made-Real Football: A New Start-Up Turns Players into Stocks

"I want to redefine what it is to be an athlete in our generation," Houston Texans running back Arian Foster trumpets in a promotional video for Fantex Holdings, a local start-up that is, indeed, re-envisioning professional sports — or at least sports economics.

Foster is the first athlete to sign his "personal brand" over to the San Francisco company, offering investors a 20 percent share of his future earnings — including sponsorship revenue, advertising gigs, income generated from his NFL contract, prospective broadcasting jobs, etc. — in exchange for a lump sum of $10 million. Foster is currently selling at $10 a share, with more than a million shares available on the company's trading platform. His shares are worth about half the projected value of Twitter's, and roughly twice the per-share price of the National Bank of Greece.

Granted, Foster might be a dicier investment than either of them. At 27, Foster is entering his fifth season with the Texans, which means he's already clocked twice as many years as the average pro runningback. That's a lot of miles on the odometer for an injury-prone player. (There's also the lurking possibility that he could abscond to Rio de Janeiro.) As Fantex notes in its prospectus, the contract party has no obligation to enhance his own value — much less disclose any uncertainties to stockholders.

And free will is only one of the many perils an investor confronts when purchasing stock in a human being. Other "risk factors" include illness, public scandal, disgrace within the NFL, or untimely death, all of which could dilute a player's brand. No wonder there's a joke making the rounds that Fantex is little more than high-stakes fantasy football.

Yet betting on a human's worth isn't entirely without precedent. In 1997, investment banker David Pullman issued $55 million in "Bowie Bonds" — asset-backed securities on future revenue from the 25 albums that David Bowie had recorded before 1990. Under the terms of the contract, Bowie surrendered 10 years of royalties, but received a giant cash payment upfront, which allowed him to buy most of his own catalog.

Evidently, Foster believes that, in his case, the short-term windfall is also a better gamble. That doesn't seem to bother Fantex's founder Cornell "Buck" French, a serial entrepreneur who doesn't mind putting money on the line. He's already drafted a real-life fantasy team for Fantex Holdings, with ex-Denver Broncos quarterback John Elway on his board, and an advisory team including Los Angeles Clippers emeritus Kerry Kittles and former NFL guard Ben Utt.

French declined to comment on the other athletes he's courting, but says he hopes to diversify the company's portfolio — in interviews, he's expressed interest in basketball, baseball, and golf. A much bigger roster could ultimately pay dividends, assuming Fantex doesn't get benched during its first season. Foster alone could pull $43.5 million on the five-year contract he signed with the Texans in 2012. That's almost enough for Fantex to break even.

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