Wednesday, November 6, 2013

Athlete Markets

Fantex has recently started a market in professional athletes, where one can buy stock in a player's future earnings.  As we note in our book The Wages of Wins, professional athletes tend to be "consistently inconsistent" in terms of on-field performance, but in terms of salaries they tend to be rather more consistent - generally.  One of the problems with this model is that NFL players do not have guaranteed contracts like NBA players, so this might be one of the incentives that NFL players like Arian Foster have to sell off part of their future earnings.

Fantex plans on setting up a trading market where current holders of a players stock can sell to anyone willing to buy that players stock - just like any other stock exchange.  I guess next will be futures options (calls and puts) and then derivatives.

Fantex signs a second athlete - Vernon Davis.

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