Running back Arian Foster made a splash this week after it was announced that people could buy stock in his future earnings. The company, Fantex Holdings, allows fans to put up a certain amount of money and they will get a piece of Foster’s endorsements and contract deals. Sounds cool, right? (Foster gets a cool $10 million from the deal)
However, is this a smart investment? Foster is 27 years old, plays one of the most battered positions in the league, and has seen a slight drop in production. If you take the old stock market adage of “buy low, sell high,” Foster might not be the best guy to throw your money at for a few reasons.
- According to Football Perspective running backs generally peak at around age 26. Now, the rate of decline for RB’s is different. Is Foster going to be a Ladainian Tomlinson and stay productive in his 30′s? Or will he be a Clinton Portis and not have a quality season after age 27?
- Arian isn’t one of the heavy hitters when it comes to salary. He’s got three years left on his contract and will be thirty when he resigns.
- Darren Heitner at Forbes went through the prospectus that Fantex had to file with the SEC. Kind of interesting, but wouldn’t you rather invest in a real company? Like one that
And here is some analysis on the whole idea of investing in athletes:
- Felix Salmon at Reuters has a nice analysis of Fantex as a whole. The two quick points from him are “if Foster fails, it fails, and if Fantex fails, it also fails.” He also goes into the ethical issues of the whole thing, “This kind of language is deliberately dehumanizing: the athlete is referred to not as a person but as a “brand”, throughout. And the racial overtones are unavoidable.”
- Michael Lewis wrote an in-depth analysis of the whole athlete stock market idea back in 2007.
- Anyone remember Protrade?
Arian Foster is an extremely talented player who many people enjoy watching. He’s also one of the smarter players in the NFL. I miss his Twitter feed.
However, throwing your hard earned money this endeavour is more about bragging to your buddies that you’ve “invested in a professional athete” then actually making a smart financial choice. Sorry Arian, this is stupid.