Andrew Heaney sells stock himself


There are these things out there in the financial world called “celebrity bonds.” It’s when an artist or performer sells future royalty rights for cash up front. The first and most famous example of this were so-called “Bowie Bonds,” issued in David Bowie earning rights back in 1997, going forward. Basically, David Bowie got $55 million up front and, in exchange, paid out a certain percentage of future earnings to bond holders. Kind of neat.

Now the model, at least roughly speaking, has come to baseball, with Angels starter Andrew Heaney jumping into that strange world. From the Los Angeles Times:

On Thursday, Heaney became the first Major League Baseball player to sign a contract with the company Fantex. The company will pay Heaney $3.34 million in exchange for a 10% stake in Heaney’s “brand income,” and investors can soon buy shares of a stock linked to his earnings . . . An investor won’t be able to purchase a player directly, but instead a share of each player’s stock buys a piece of Fantex, which uses the player’s income to issue dividends.

Investors are not paid unless or until Heaney earns $33.4 million.

In a way this is like a $3.34 million insurance policy that pays out now, I suppose. At the moment Heaney makes the major league minimum and won’t be arbitration eligible for three years. If Heaney gets hurt or flames out, this was a nice way to secure his future. Of course, if he becomes an elite and highly paid starter, it’s gonna cost him a bit. A gamble, then, just as a lot of financial decisions athletes make are gambles.

A gamble for investors too, of course. David Bowie’s bonds, after all, have since been degraded to one step above junk status. I guess most people who wanted his old albums had them before 1997. And no one really wanted to buy “Heathen.”