The first thing to understand is that, more than anything, this seems like a memorabilia grab more than a new paradigm of athlete economics. The Fantex offering is going to rely heavily on fans buying up shares. In fact, it’s even putting specific rules in place so that big investors can’t buy up all the shares, and they’re available for the average fan—endorsement-backed trading cards, essentially. From the New York Times:
Unlike many esoteric Wall Street investments that are available only to so-called high-net-worth individuals, the Fantex offering is available to United States residents 18 years and older, with a minimum investment of $50. There are some restrictions. For instance, investors with annual incomes of $50,000 to $100,000 may only invest up to $7,500 in the offering. Individual state securities laws might also place further limits and who can invest, Mr. French said.
Fantex will market the Foster I.P.O. in the coming weeks, offering 1.06 million shares at $10 a share. No one can own more than 1 percent of the offering, ensuring that it is available to a wide number of investors. If demand is less than the number of shares being offered, Fantex may cancel the deal. But if it proves successful, Mr. Foster’s tracking stock will then trade exclusively on an exchange operated by Fantex. Presumably, the tracking stock will increase in value if Mr. Foster raises his earnings potential with standout on-the-field performance or increased corporate sponsorships. Then, the investor can try to sell his shares at a higher price. Fantex will make a 1 percent commission from both the buyer and seller on the trades.
Did you catch that? This isn’t speculative trading so much as it is an extension of NFL merchandising. It isn’t so much about the “brand” that Arian Foster has built up as it as about the broad commodification of athletes in general, and fans’ willingness to buy dumb shit even peripherally attached to a team. You’re buying a brand with the Arian Foster stock, but it isn’t Foster himself—it’s the NFL.
But how will it work from there? The details are non-existent, and what we do have sounds like a mouthful of nothing. “Presumably, the tracking stock will increase in value if Mr. Foster raises his earnings potential with standout on-the-field performance or increased corporate sponsorships. Then, the investor can try to sell his shares at a higher price.” What the hell does that even mean? And how does that reconcile with the inherently depreciating nature of nearly every professional athlete (compounded here with the idea of buying into the future of a 27-year-old running back)? Good questions.