Wouldn’t it be great if you could make stock market money from fantasy baseball-like research?
That could be happening soon. A minor league baseball player set up a new company called Real Sports Investments, where he sold shares of himself in exchange for a percentage of his future baseball salary.
Randy Newsom, a Tufts economics graduate and pitcher in the Cleveland Indians minor league farm system, came up with the idea after discussing how underrated certain players were. Flashing forward to last January, Newsom created the website that allowed fans/investors to buy the shares in him. The shares sold well at $20 each, accumulating to a total of $50,000 or “4% of his expected future earnings”.
It’s like getting in on the ground floor of a hot new company with a lot of potential risk. Of course, there’s no guarantee that a player you’ve invested in will actually make it to the big leagues, but Randy and the other co-founders of Real Sports Investments see this is a great way for fans to become even more involved in the game. According to their website :
Investing in a player is similar to investing in a company. If the company makes money, the investors get paid in the form of a dividend. If an athlete you own shares in makes it to the big leagues, then you will be paid a percentage of his contract.
Investors can also trade their shares to other willing buyers and sellers via this website. Shares will increase or decrease in value based on the athlete’s future earning potential and supply and demand.
Major League Baseball is currently investigating the idea to see if it’s good and legal. They will be meeting with some of the founders of Real Sports Investments today to discuss whether this business will be allowed to continue. In the meantime, the money already invested in Newsom has been refunded and the business was put on hold.
This kind of stuff has been done in the past in a more corporate way for golfers, tennis players, and thoroughbred horses, but this would be the first time investors could get in on the team sport dynamic.
I wonder if someday this will have a major influence on sports. Like if stocks start shooting up when a player hits a homerun, and is SportsCenter starts analyzing statistics of ERA and stock correlations. To be honest, I just want to hear Chris Berman yelling “Whoop! Sell Sell Sell!”
CNBC Sports Biz: Real Sports Investments: Selling Shares of MLB Players?, April 21, 2008
NY Times Freakonomics: With the Stock Market Down, Perhaps Diamonds Are a Good Place to Invest, January 28, 2008