Last year, Angels pitcher Andrew Heaney became the first Major League Baseball player to sign a contract with a company called Fantex. Fantex’s business: selling stock, more or less, in atheltes’ future earnings. The company paid Heaney — who was making the major league minimum at the time — $3.34 million in exchange for a 10% stake in Heaney’s future “brand income.” Investors could then buy shares of a stock from Fantex linked to Heaney’s future earnings.
Yesterday, Fantex announced a handful of new indexed players: Phillies third baseman Maikel Franco, Astros right-hander Collin McHugh, Orioles second baseman Jonathan Schoop, Twins right-hander Tyler Duffey and Padres third baseman Yangervis Solarte.
As I wrote when Heaney did this last year, these deals work like an insurance policy that pays out now. At the moment these guys don’t make a ton of money and if they get hurt or flame out it’s a nice way to secure their future. If they do flame out and get highly-paid, sure, it’s gonna cost them a bit. A gamble, then, just as a lot of financial decisions athletes make are gambles.