Athlete Stock Shares Return as Startup Vestible Hits Market – Sportico.com
Photo by Michael Owens/Getty Images
If you think Denver Broncos linebacker Baron Browning’s performance means he’s due a nice bump in salary when he inks his next NFL contract after the 2024 season, you’ll soon be able to put your own money on it.
Browning and a startup founded by two former Oklahoma State University football players are teaming up to sell shares in Browning’s future NFL earnings, if regulators approve the plan. The startup, Vestible, expects to sell 60,000 to 100,000 shares in Browning at $10 a piece later this year. In exchange investors get a claim on their slice of 1% of his sports salaries as long as he’s a professional athlete.
The idea, from Parker Graham and Yves Batoba, is simple: “What if we allow fans to invest in what they actually believe is the market value of these athletes and how they impact teams?” said Batoba, on a phone call.
Vestible expects the Browning offering to be the first of what it hopes will be a continuing series of deals with athletes to sell stock in themselves backed by future earnings. Vestible’s website teases future offerings from unidentified collegiate basketball and football players. In Browning’s case, he’s selling 1% of the final year of his rookie contract, equal to $12,025, and the same percentage of whatever deal he signs next. The expectation is that fans will bid up shares in expectation Browning, considered a key cog of the Broncos defense, will land a more lucrative deal for 2025 and beyond.
“Ours is a marketplace where we have athletes that have shares that are able to trade back and forth on actual dollar figures—actual income coming from that athlete,” said co-founder Parker Graham.
The pair have picked up an idea that has been around for years now: The modern version of the celebrity brand investment got jumped-started by David Bowie, who sold bonds in the late 1990s backed by future revenue from his song catalog. In the 2010s, an investment banker-led effort called Fantex did much the same as Vestible plans now. Fantex signed up about 20 athletes, including then-49ers star Vernon Davis and MLB infielder Jonathan Schoop, to commit 10% to 15% of cash related to endorsement deals they signed through the venture, selling shares to the public between 2013 and 2016 before Fantex effectively closed up shop in 2017.
More recently, Big League Advance has successfully done salary deals with baseball stars like Fernando Tatis Jr., through investment funds backed by institutional investors. But celebrity offerings are by no means guaranteed to succeed: Charlotte Hornets guard P.J. Washington flopped in an effort to get people to give him $1 million to invest in exchange for a cut of the profits, for instance.
Getting a cut of Browning earnings probably will be a couple of months off, with the Securities & Exchange Commission in the late stages of what Vestible’s co-founders expect will be approval. The green light is expected both because of the past approval of similar ventures and regulators being comfortable with the surge in fractional securitization of other fan-focused offerings such as collectibles.
Other player “stock markets” have popped up recently, but since they have no real assets backing them, they are consigned to fantasy sports. The presence of a real asset—the player salaries—makes Vestible more intriguing and more likely to attract liquidity (though trading only will take place on Vestible’s app). If Vestible prices at the low end of its range, 60,000 units at $10 each, the Browning shares will offer buyers a 2% dividend yield—that is, 20 cents–of the linebacker’s 2024 salary. By comparison, the annual dividend yield on the S&P 500 is current 1.47%—about 15 cents for every $10.
But there are crucial differences. For one, Browning may get cut and never collect his 2024 salary, and an NFL player likely won’t play long enough to really compare to the long-term opportunity of a megacap stock. Moreover, ancillary earnings, like sponsorship income or other name, image and likeness monies Browning earns, aren’t included in the offering. Right now, the best part of the deal goes to Browning, who will collect 80% of the offering price, up to $800,000, with underwriters and Vestible the balance.
But Batoba and Graham believe the idea can evolve, as athletes aim to monetize some portion of their brand value, be it salaries, NIL income or other potential income streams, and as fan thirst for their favorite celebrities seems unquenchable.
“We’re trying to create a new definition of what fandom is,” Graham said. “Fans are desiring a way to get even closer to their athletes and really believe in them in the earliest stages of their career [to the point] where they’re hopefully all-stars and have a massively powerful brand. To really create a rising-tide-lifts-all-boats environment.”