What Is Fantex? Brokerage Services Company Allows Fans To Invest In Arian Foster 'Stock,' Other Pro Athletes

  @TBarrabit.barrabi@ibtimes.com on October 17 2013 2:31 PM

For the first time, sports fans will have the chance to see their faith in a particular professional athlete rewarded with a financial dividend.

On Thursday, Fantex Brokerage Services announced a new program in which fans can buy “stock” in a professional athlete, ESPN reports. Moreover, the “stock” will rise and fall based on how the athlete performs, both on the field and in his or her business ventures.

Houston Texans running back Arian Foster will be the first athlete to team up with Fantex. The company announced Thursday that it will pay Foster $10 million upfront in exchange for a 20 percent stake in his future earnings, ESPN reports. Each athlete’s value will be based on his professional contracts, endorsement deals and other business investments.

In Foster’s case, the deal will encompass 20 percent of the five-year contract he signed with the Texans in 2012—a deal which came with over $20 million guaranteed, ESPN notes. The Texans running back also has endorsement deals with Under Armour and Fuse Science.

The company will also be entitled to 20 percent of Foster's future earnings. For example, if Foster lined up a new endorsement after his career ended, Fantex would be entitled to stake in his earnings, USA Today notes.

"Fantex is bringing sports and business together in a way never previously thought possible," Buck French, the company’s CEO, said in a statement. "By building a marketplace that allows customers to buy shares in a tracking stock linked to the value and performance of an athlete's brand, Fantex is enabling a new level of brand advocacy through ownership."

The brokerage services company will be up and running in the very near future. Fantex will reportedly begin taking offers within the next two weeks, and could begin selling Foster’s shares within the month, ESPN reports, so long as the company’s progress with the Securities and Exchange Commission continues.

As of now, prospective investors will only be able to buy shares of Foster; Fantex plans on negotiating deals with additional athletes, but doesn’t have any other offers in place at the moment. The company’s long-term viability will depend entirely on how many athletes agree to sell a stake of their own financial interests.

However, just because an athlete retires doesn’t mean he or she is no longer worth an investment, French said. The company believes that many athletes will draw attention from investors based solely on their post-athletic business ventures.

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