If there's one truism in the sports industry, it's that someone at some point will try again to combine professional sports with elements of the stock market. And in almost every case, it has been an uphill road.
For more than 20 years, a number of different companies have tried to use athletes' performance on or off the field and turn it into some version of an investment-grade asset. Approaches have varied: some fall closer to the realm of traditional fantasy sports or sports betting, while others exist as a reworking of other famous brand investment vehicles.
But in each case, the core idea is largely the same: bring fundamental investing concepts to Wall Street and combine them with the affinity fans have for sports.
The latest entrant is Wearable, which allows fans to buy and sell stocks based on future earnings in the field of college professional athletes. The Kansas-based startup gained approval from the U.S. Securities and Exchange Commission and is now planning a March 18 initial public offering centered on Broncos linebacker Baron Browning. Fans can buy shares at a price of $10 tied to 1% of Browning's salary income. The Denver linebacker, who gets 80% of the IPO funds, is currently on a rookie contract that pays about $3.1 million this year, but is expected to receive a big pay raise in his next deal. Part of the hook here is to get fans in on the ground floor, so to speak, on Browning's bright side.
Swings and failures
Investors will receive monthly dividends and will be able to buy and sell those shares. Wearable, however, is simply the latest in a long line of companies that have tried, without lasting success, some version of this idea. Among the company's many predecessors:
- ProCommerce: The grandfather of them all in this space. Created by Mike Kerns (former chief of staff to super agents Leigh Steinberg and Jeff Moorad) and Jeff Ma, part of the famous MIT blackjack team that beat Las Vegas at its own game, this company was formed in 2004 as a trading market. online values โโfor athletes. . Unable to expand that operation, Kerns and Ma renamed the company in 2008 to Citizen Sports Network and pivoted into a variety of social networks and fantasy sports-oriented apps, eventually leading to a successful sale to Yahoo! Today, Kerns is a partner at influential investment firm The Chernin Group, while Ma is an active entrepreneur, author, podcaster, and speaker.
- fantex: Similar to Wearable but structured around sponsorship revenue rather than on-field salary, this company sold shares between 2013 and 2016 before going out of business the following year.
- Mojo: Backed by Timberwolves owners Alex Rodriguez and Marc Lore, this athlete-oriented stock market also risky in sports betting and fantasy sports, but sold or closed much of its business late last year and is now focused on downstream price support for other betting operators.
Many others are still trying similar concepts, including PredictionStrike, which raised $10 million last fall for its fantasy sports stock market. But in virtually every case above, the inability to reach large groups of casual fans has proven fatal.
