Invest in Arian Foster?

Morgan Housel points us to this from USA Today:

Beginning in about two weeks, that might change. A San Francisco-based company is announcing Thursday that it has made an agreement to obtain an interest in the current and future income of Houston Texans star running back Arian Foster in exchange for $10 million that it hopes to raise through the creation and sale of a tracking stock tied to Foster’s marketability.

The company, known as Fantex Holdings, has filed a registration statement with the Securities and Exchange Commission and soon will stage an initial offering of 1.055 million shares at $10 per share, co-founder and CEO Buck French told USA TODAY Sports. If successful, Fantex hopes to make deals that will result in the creation of tracking stocks tied to other athletes and entertainers.

The sale of all initial Foster shares will activate a contract with Foster that, according to French, has been in place since Feb. 28. Foster will get the $10 million from Fantex, which will get 20% of his football, endorsement and other brand-related income reaching back to Feb. 28 and going forward in perpetuity. If, for example, Foster gets a broadcasting contract after his playing career ends, Fantex will get 20% of his pay.

If all of the Foster shares do not sell, Fantex’s contract with Foster will not go into effect and people who made commitments to by shares will get their money back, French said.

Posted by on October 17th, 2013 at 11:36 am


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