SAN FRANCISCO – 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.