Athlete Stocks May Soon Be Listed On NASDAQ


Screen Shot 2015-12-06 at 10.21.57 PM

Fantex, a brokerage that allows fans to buy and sell shares in future earnings of athletes it has bought a stake in, is now seeking approval from the Securities and Exchange Commission for the opportunity to sell a portfolio of athletes under a single symbol on a national stock exchange for the first time.

Vernon Davis, Alshon Jeffery, Mohamed Sanu, Jack Mewhort, Ryan Shazier, Kendall Wright, Andrew Heaney, Terrence Williams, Michael Brockers and EJ Manuel are the 10 athletes linked to the stock, all with different weightings. Initially, UBS, an investment bank, will be exclusively selling the stocks, and if approved, will be listed under the NASDAQ as ‘FXSP’.

Never miss the latest NFL tech news with the SportTechie newsletter.

“Our six completed IPOs paved the way to unlocking an asset class previously closed to the capital markets,” said Fantex, Inc. CEO and co-founder Buck French, according to Forbes. “By bundling multiple tracking stocks into a single, NASDAQ-listed security, we believe Fantex is providing the next evolution for those looking to invest in the business of professional sports.”

Fantex traditionally approaches athletes based on their “brand incomes”, a term involving the athlete’s current sports contract income, off-field income (endorsements) and a predicted future income. Fantex purchases 10% interests from players in exchange for a specific amount of guaranteed money.

An example of how the system works can be seen with Indianapolis Colts offensive lineman Mewhort and his agreement with the company. Fantex acquired a 10% interest in his brand income for $2.52 million and expects Mewhort to earn $58.8 million in gross lifetime brand income, most of which is expected to be earned from an estimated 9 years of future NFL salaries and bonuses (in addition to a slight amount of money from off-field income).

Fantex co-founder and chief financial officer Dave Mullin said what attracted UBS to the offering is that “the money is not as correlated as others are to broader economic forces.”, and added that while the company is becoming increasingly popular with athletes and their agents, they will not be jumping at just anyone.

“We know that the skill positions are the attractive, sexy parts of the business,” Mullin said, according to ESPN. “But it’s understood that investors want cash on cash yields, and we’ve found that linemen, for example, are reliable, play for a long time once they are established and are paid very well.”

While professional sport has quickly become a commercial business, 5 years ago, no one could have predicted that athletic talent would ever be traded as a stock on the NASDAQ. It is a terrific way to prepare athletes for life after sport and provides them, not only with benefits, but the financial education they will need after retirement.