In February 2021, Dominican baseball superstar Fernando Tatis Jr signed a monster deal with the San Diego Padres — US$340 million over 14 years.
However, up to US$30 million of that total is eventually to go to Big League Advantage (BLA), which financed Tatis in the early stages of his career, according to US media estimates.
The company and its investors stand to make at least 10 times their initial investment.
Photo: AFP
BLA is one of several start-ups offering individuals an opportunity to bankroll young athletes in exchange for a portion of their future earnings — a new and perfectly legal market that has some sports agents wringing their hands.
Investing in young athletes is nothing new. In the early 2000s, hundreds of promising soccer players ceded their rights to investment funds before the sport’s world governing body FIFA banned the practice in 2015.
Yet now, these opportunities are increasingly available to the average investor, and not just a handful of rich elites with high-powered financial advisers — thanks to new regulations that took effect in 2016.
“We started Finlete because we wanted to bridge the gap between athletes and their fans,” said Rob Connolly, cofounder of the California-based platform, which has the backing of media-telecom giant Comcast Corp.
Finlete is awaiting operations approval from the US Securities and Exchange Commission, in what would be a first for an investment firm open to all, no matter their wealth or earnings.
“Our goal is to have the share price at around US$25,” affording the investor a share of a blue-chip athlete’s future income, said Connolly, adding that he has several thousand people already on a wait list to buy in.
Shareholders would then be able to buy and sell on the platform.
Until now, this nascent investment industry has been largely linked to Major League Baseball (MLB), as its minor league system creates a market of thousands of young players who could eventually make it big.
However, Swiss company FANtium has launched with a focus on tennis, and Commonwealth, which initially specialized in shares of racehorses, is expanding its listings to include golfers.
Those players receive US$225,000 upfront to cover a three-year span, in exchange for 30 percent of their earnings over the same period — a percentage that dwindles to 10 percent in year six, when the contract expires.
The money is placed in a joint account controlled by the player and Commonwealth, “so that we have full visibility into what the money is being spent on,” Commonwealth cofounder and CEO Brian Doxtator said.
At Commonwealth, Finlete and most of their competitors, the athlete is not required to reimburse any of the initial investment if they do not make it to the professional ranks.
For the time being, for athlete investments, Commonwealth only accepts accredited investors, who fulfill a minimum wealth and income threshold.
Yet eventually, “we’ll be able to sell shares in athletes for 100 bucks” as is done for racehorses, Doxtator said.
However, one executive from a sports agency who asked not to be named, voiced skepticism about the benefits of such investments for the athletes.
“It’s become really a predatory practice,” they said. “It can be incredibly dangerous, because you can be giving away a significant financial upside long-term for sort of early short-term gains.”
The executive said he hoped to see more government regulation of the sector, with “more guardrails and safeguards.”
“But it’s still so early,” he said. “Only time will tell — I don’t think people fully understand the whole practice at large.”
Doxtator said he hopes to “completely eradicate predatory deals,” citing the example of an athlete being given US$50,000, and then owing 50 percent of his earnings to investors for 10 years.
“It’s just crazy,” he said.
Registering Commonwealth with the Securities and Exchange Commission would force transparency, especially on the financial parameters of the deals signed by the players, Doxtator said.
Connolly said he understands why some are hesitant to buy into his investment model, but added that some athletes do not have the “support system” needed to make it to the big leagues.
“A lot of these athletes have to quit their dream of being a professional athlete before they reach their full potential because of financial hardship,” Connolly said. “We believe we’re getting more [of them] the ability to achieve their dreams.”
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
It is challenging to build infrastructure in much of Europe. Constrained budgets and polarized politics tend to undermine long-term projects, forcing officials to react to emergencies rather than plan for the future. Not in Austria. Today, the country is to officially open its Koralmbahn tunnel, the 5.9 billion euro (US$6.9 billion) centerpiece of a groundbreaking new railway that will eventually run from Poland’s Baltic coast to the Adriatic Sea, transforming travel within Austria and positioning the Alpine nation at the forefront of logistics in Europe. “It is Austria’s biggest socio-economic experiment in over a century,” said Eric Kirschner, an economist at Graz-based Joanneum
OPTION: Uber said it could provide higher pay for batch trips, if incentives for batching is not removed entirely, as the latter would force it to pass on the costs to consumers Uber Technologies Inc yesterday warned that proposed restrictions on batching orders and minimum wages could prompt a NT$20 delivery fee increase in Taiwan, as lower efficiency would drive up costs. Uber CEO Dara Khosrowshahi made the remarks yesterday during his visit to Taiwan. He is on a multileg trip to the region, which includes stops in South Korea and Japan. His visit coincided the release last month of the Ministry of Labor’s draft bill on the delivery sector, which aims to safeguard delivery workers’ rights and improve their welfare. The ministry set the minimum pay for local food delivery drivers at
RSS