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thatrogue
[Edited on 1-22-2008 by thatrogue]
Investing in baseball players
January 22, 2008 at 11:39AM View BBCode
[url=http://www.baseballprospectus.com/article.php?articleid=7063]An interesting concept.[/url] People invest in all sorts of future income streams, but this seems like a niche that is unlikely to catch on. Of course, I believe that the head of Digital Equipment Corporation said that about the personal computer, many years ago. :lol:[Edited on 1-22-2008 by thatrogue]
BobbyGrich
January 22, 2008 at 04:29PM View BBCode
I could see some local businessmen investing in a kid that comes from their town. You already see it in the World Series of Poker and in golf.
rollman1
If you are looking to invest in a player there is no reason you cannot do it now. These guys are basically providing a lump sum payout on projected future earnings. There is no reason why today, Player A cannot simply create a corporation (or partnership) where earnings tied to his brand (salary, advertising, etc) are put into the partnership and divided up among the investors.
January 22, 2008 at 05:07PM View BBCode
It sort of depends what you mean by catch on. If you are looking for it to encompass a materially significant portion of the professional athelete world there are hundreds of things that need to be done in order to have a trustworthy, fluid market.If you are looking to invest in a player there is no reason you cannot do it now. These guys are basically providing a lump sum payout on projected future earnings. There is no reason why today, Player A cannot simply create a corporation (or partnership) where earnings tied to his brand (salary, advertising, etc) are put into the partnership and divided up among the investors.
thatrogue
January 22, 2008 at 05:31PM View BBCode
Catch on in the sense of becoming a widely accepted investment vehicle, as some other future income streams have become (corporate securities, the securitization of mortgages and other debt instruments, etc.). Clearly, there will always be some market for such an investment, but my doubt was focused upon whether this type of investment might gain widespread acceptance.
chi925a
I don't know if the formation of a private company like that would work. In effect the team would contract the company for the player's services. What type of nightmare issues could this create w/ collective bargaining and the union?
January 22, 2008 at 05:37PM View BBCode
Rollman,I don't know if the formation of a private company like that would work. In effect the team would contract the company for the player's services. What type of nightmare issues could this create w/ collective bargaining and the union?
thatrogue
January 22, 2008 at 05:54PM View BBCode
Originally posted by chi925aI don't think it would create any issue. Fannie Mae, Freddie Mac and others who securitize debt instruments have no say in the sale, upgrade, modification, and/or lease of any of the properties forming the underlying collateral for the original mortgages (nor do the actual investors)...they simply have a right to the income streams and/or the associated management fees.
Rollman,
I don't know if the formation of a private company like that would work. In effect the team would contract the company for the player's services. What type of nightmare issues could this create w/ collective bargaining and the union?
rollman1
As to the widespreadness, there would need to be lots and lots of work, as well as regulation.
Chi,
That wasnt the mechanism I was thinking of. The team would still contract with the player...the player would simply "pledge" his earnings into the corporate vehicle. This is why there would need to be oversite and regulation...unless of course you think athletes are trustworthy to the extreme.
In fact you, Chi, could create an LLC, invite members to invest in your LLC, and the sole earning of your LLC are in fact Chi's earnings. This could happen today.
Now of course that does not create a marketplace as Rogue was suggesting.
January 22, 2008 at 05:58PM View BBCode
ThatRogue, That is not correct. The holder's of mortgages do indeed have say, via a lien, over the use of the property. Mortgages CAN forbid people to sell the property, that of course is not common in residential mortages, but a mortgage is just a contract and it can be written as such.As to the widespreadness, there would need to be lots and lots of work, as well as regulation.
Chi,
That wasnt the mechanism I was thinking of. The team would still contract with the player...the player would simply "pledge" his earnings into the corporate vehicle. This is why there would need to be oversite and regulation...unless of course you think athletes are trustworthy to the extreme.
In fact you, Chi, could create an LLC, invite members to invest in your LLC, and the sole earning of your LLC are in fact Chi's earnings. This could happen today.
Now of course that does not create a marketplace as Rogue was suggesting.
chi925a
January 22, 2008 at 06:03PM View BBCode
An investor would want an iron clad contract for that pledge or income I'm sure. I was thinking more along the lines of traditional business structure. Must be the conservative bean counter showing through again.:lol:
rollman1
Of course the investor would need an iron clad contract. But really, in the end, it is no different from any shareholders, membership, or partnership agreement out there.
January 22, 2008 at 06:06PM View BBCode
lol Chi...it sounds like you are the biography type of bean counter, while I am the creative fiction type....Of course the investor would need an iron clad contract. But really, in the end, it is no different from any shareholders, membership, or partnership agreement out there.
thatrogue
The idea per the article is for a single company to contract with various athletes and "sell" income streams, either singly or jointly, to multiple investors. I would envision the company to operate as you stated...it is set up to be the vehicle via which the specific terms are established (income sharing percentages, length of agreement, etc.) and the transactions and logistics are managed.
January 22, 2008 at 06:15PM View BBCode
Originally posted by rollman1However, as I stated, neither the firms which securitize nor the investors in the mortgage backed securities have any say in the way the home is managed. They are not the one's writing the mortgage...they simply invest in the future income stream of the debt instrument as it exists. Any restrictions would have to be done at the time the original loan is made...not by those seeking to invest via the secondary or tertiary market.
ThatRogue, That is not correct. The holder's of mortgages do indeed have say, via a lien, over the use of the property. Mortgages CAN forbid people to sell the property, that of course is not common in residential mortages, but a mortgage is just a contract and it can be written as such.
The idea per the article is for a single company to contract with various athletes and "sell" income streams, either singly or jointly, to multiple investors. I would envision the company to operate as you stated...it is set up to be the vehicle via which the specific terms are established (income sharing percentages, length of agreement, etc.) and the transactions and logistics are managed.
rollman1
Far enough. It would be incredibly inefficient to allow those firms to dictate terms - but i believe you are correct in that the downstream investors do not have much, if any, say
Yeah I would have to think about it some more, but I don't see the concept as too much different from other investments.
January 22, 2008 at 06:32PM View BBCode
Originally posted by thatrogue
However, as I stated, neither the firms which securitize nor the investors in the mortgage backed securities have any say in the way the home is managed. They are not the one's writing the mortgage...they simply invest in the future income stream of the debt instrument as it exists. Any restrictions would have to be done at the time the original loan is made...not by those seeking to invest via the secondary or tertiary market.
Far enough. It would be incredibly inefficient to allow those firms to dictate terms - but i believe you are correct in that the downstream investors do not have much, if any, say
Originally posted by thatrogue
The idea per the article is for a single company to contract with various athletes and "sell" income streams, either singly or jointly, to multiple investors. I would envision the company to operate as you stated...it is set up to be the vehicle via which the specific terms are established (income sharing percentages, length of agreement, etc.) and the transactions and logistics are managed.
Yeah I would have to think about it some more, but I don't see the concept as too much different from other investments.
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