IPO to give investors a stake in NFL running back

IPO to give investors a stake in NFL running back
October 18, 2013, 1:11 am
Share This Post

SAN FRANCISCO (AP) Here's a new twist on fantasy sports: a San Francisco startup is offering a chance to bet on the moneymaking potential of star athletes.

The unusual investment opportunity kicked off Thursday with an IPO filing proposing to sell stock for a stake in the future income of the Houston Texans' Arian Foster, a top running back in the National Football League.

The initial public offering hinges on a deal requiring Fantex Holdings Inc. to pay Foster $10 million in return for a 20 percent share of his remaining contract with the Texans, his endorsement income and any other future money tied to his football career. Those earnings could include potential broadcasting jobs that Foster gets after his playing career is over. It doesn't include money Foster would make if he pursues a career unrelated to football.

Fantex plans to sell about 1 million shares at $10 apiece to pay Foster and cover other expenses. The tracking stock won't trade on a major stock exchange; instead, it will be bought and sold on a trading platform set up by Fantex, which was co-founded last year by Silicon Valley entrepreneur Buck French.

Foster, who is in his fifth season with the Texans, is just the first player in what Fantex hopes will become a diversified line-up of star athletes. Foster declined to comment citing Securities and Exchange Commission regulations.

The company is aiming to do IPOs featuring players in professional baseball, basketball, hockey and golf, as well.

''Our philosophy is to work with people who we believe have interesting brand attributes that we can work with and they can work with us,'' said French who got rich during the dot-com boom after selling a software company to Siebel Systems. ''You don't have to be a superstar. I could see us working with big names and no names. The question is do they have attributes to build a brand for the long haul.''

At least one person associated with Fantex knows something about a long sports career. John Elway, the former Denver Broncos quarterback who is now executive vice president of football operations for his former team, is a member of Fantex's parent company, Fantex Holdings.

This isn't the first time that a public figure has bet on his future moneymaking potential in the securities markets. British rocker David Bowie famously sold shares in his future earnings with the issue of ''Bowie Bonds.''

Just like any securities investment there are risks. The marketability of professional athletes can go through wild swings if they become embroiled in scandals, as superstars such as bicyclist Lance Armstrong and golfer Tiger Woods have proven. There's also no guarantee that athletes will have long playing careers.

Foster, 27, already has suffered injuries to his knees and hamstring that have sidelined him in previous seasons and limited his ability to play in other games. He also has been plagued by an irregular heartbeat since he was 12, according to the IPO filing.

So far, Foster has remained healthy enough to be one of the main cogs on the Texans, a team that was widely expected to be a Super Bowl contender. It's been a disappointment so far this season with a 2-4 record.

The NFL could not be reached for comment.

Fantex is betting it can help Foster line up a lot of lucrative endorsements, as well as help him make money after his career is over. The Texans signed Foster to a five-year contract that will pay him $23.5 million during the period covered by the Fantex IPO. He also could earn up to $2 million in bonuses, depending on his performance, according to the IPO filing. He's also lined up endorsement deals that could pay nearly $700,000.

If Foster collects the maximum amounts from his Texans contract and current endorsements, Fantex would receive about $5 million.

-----

AP Sports Writer Kristie Rieken contributed from Houston.

Online: https://fantex.com/

Texans - Team News
Arian Foster - RB
Texans coach Bill O'Brien referred to Arian Foster (hamstring) on Monday as "day to... Foster himself acknowledged he wasn't 100 percent in Sunday's win over the Bills, managing six yards on eight carries. He'll likely continue to be limited in practice all...
Sep 29 4:20PM Read More
Arian Foster - RB
Following Sunday's win over the Bills, Arian Foster (hamstring) admitted he "just wasn't... Foster rushed eight times for six yards while playing on just 54.1 percent of the snaps, but did salvage his box score a bit with seven catches for 55 yards. The good news...
Sep 29 8:42AM Read More
Andre Johnson - WR
Andre Johnson said the ankle injury that briefly sidelined him Sunday is "fine." "I was more scared than anything because I felt a pop, so I went in and got checked," Johnson said. We never like to hear about pops, but Johnson did come back...
Sep 28 5:37PM Read More
Garrett Graham - TE
Garrett Graham caught three passes for 28 yards in Week 4 against the Bills. He was targeted five times. Graham is on pace for just 36 catches and 380 yards this season, but should be more involved going forward now that he's healthy. He was used in...
Sep 28 5:25PM Read More
Alfred Blue - RB
Alfred Blue had nine carries for nine yards in Week 4 against the Bills. With Arian Foster playing through a hamstring injury, Blue was used in a committee and finished with more carries. He added two catches for 16 yards on three targets. Blue...
Sep 28 5:22PM Read More
DeAndre Hopkins - WR
DeAndre Hopkins had five catches for 64 yards and a touchdown in Sunday's Week 4 win over... Hopkins beat Corey Graham for a 35-yard touchdown at the end of the first half. He finished with just six targets despite Andre Johnson missing time with an ankle injury....
Sep 28 5:03PM Read More
Arian Foster - RB
Arian Foster totaled 61 yards on 15 touches in Sunday's Week 4 win over Buffalo. Foster was held to six yards on eight carries, but was targeted 10 times by checkdown artist Ryan Fitzpatrick. He was clearly running at half-speed and looked sluggish...
Sep 28 4:07PM Read More
Ryan Fitzpatrick - QB
Ryan Fitzpatrick completed 25-of-37 passes for 268 yards, one touchdown, and two interceptions... Fitzpatrick's only notable play was a 35-yard touchdown to DeAndre Hopkins at the end of the first half. He managed the Texans to a win without any help from Arian Foster or...
Sep 28 3:55PM Read More
Andre Johnson - WR
Andre Johnson left Sunday's Week 4 game against the Bills with an ankle injury. Johnson came up lame on a pass in the fourth quarter and was taken to the locker room. He was able to jog off under his own power and later returned to the game. Johnson...
Sep 28 3:01PM Read More
Arian Foster - RB
According to NFL Network's Albert Breer, Arian Foster (hamstring) is moving with a slight limp... Per Breer, the Texans will "monitor his hamstring early in the game, determine his workload from there." It's similar to what was reported by beat writer Tania...
Sep 28 11:40AM Read More
Arian Foster - RB
Arian Foster (hamstring) is active for Week 4 against the Bills. Foster will be available for a full workload after sitting out last week. He's Rotoworld's No. 12 running back against the Bills' top-five run defense. Inactive for the...
Sep 28 10:33AM Read More
Arian Foster - RB
According to the Houston Chronicle, Arian Foster will "definitely" play in Sunday's... The chronic hamstring issue Foster has been battling for two months is good to go. "Foster would't be active if he wasn't 100 percent. That means he'll get a full...
Sep 28 10:03AM Read More
Arian Foster - RB
NFL Network's Ian Rapoport reports Arian Foster (hamstring) is expected to play Sunday against... That's two positive reports on Foster within the past 12 hours. He's still likely to be a game-time decision, but all signs are pointing toward Foster starting after...
Sep 28 7:45AM Read More
Arian Foster - RB
The Houston Chronicle expects Arian Foster (questionable, hamstring) to play in Week 4 against... Foster is still a game-time decision and will need to go through pre-game warmups before he's cleared. He was reportedly close to playing last week and ended up being held...
Sep 27 6:19PM Read More
Andre Johnson - WR
Andre Johnson (ankle) is probable for Week 4. Johnson will be fine for Sunday's matchup with the Bills. He's Rotoworld's No. 12 receiver this week.
Sep 26 5:53PM Read More