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Fan of an NFL star? Buy his stock...

20 october 2013, 18:57
1
©AFP
©AFP
US football fans glued to television screens on Sundays will soon have a new way of showing their devotion to the pigskin: buying stocks linked to their favorite players, AFP reports.

California-based brokerage house Fantex aims to raise $10.5 million in an initial public offering of shares in Houston Texans running back Arian Foster, according to documents submitted to the Securities and Exchange Commission.

According to their agreement, Foster will turn over 20 percent of his future earnings related to football, including endorsements and contracts, to benefit his future stockholders.

In return, the 27-year-old football star, who calls himself an "entrepreneur" on his personal website, could pocket up to $10 million up front -- the bulk of the amount Fantex hopes to raise from selling shares at $10 a pop.

Fantex will profit too -- some $500,000 from the IPO, plus the fees on all the transactions, which are set to start in the coming weeks.

The brokerage firm prides itself on being a global pioneer, but notes that "investing" in an athlete this way carries high risks, because his value is variable based on performance and intangible qualities, like image.

"This offering is highly speculative and the securities involve a high degree of risk," the company admits in its 37-page filing with the SEC.

The company adds that people should only invest if they "can afford the loss of their entire investment."

Despite these uncertainties, the San Francisco company said it intends to expand its offerings of professional athletes, including baseball and basketball players, and others "with the potential to generate significant brand income."

Foster, who already has endorsement deals with Toyota, supermarket chain Kroger, and sporting apparel maker Under Armour, last year signed a $43.5 million contract through 2016, according to NFL salary watching website overthecap.com.

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