A few years back, Latrell Sprewell turned down a contract that would’ve paid him in the neighborhood of $10 million per year, his reason, “I’ve got my family to feed.” (Since this quote in December of 2004 one of his daughters was mauled by a dog, and Sprewell was sued for $200M in alimony). Of course, his game disappeared on him shortly thereafter, and his family was left to fend for itself when he was out of the league a season or so later.
This story is just a glimpse into the type of quotes we’re going to see if/when the proposed A.S.A. Sports Exchange opens up. The A.S.A.S.E. is going to be a futures market, trading on the future earnings of pro athletes. (Originally found on The 700 Level)
In a nutshell, athletes will sell 20% of all future sports-related earnings for a set amount, the earnings will be placed in a trust, and shares of that trust will be bought and sold.
Michael Lewis, who wrote Moneyball, Liar’s Poker, etc. wrote the story for Portfolio Magazine and it’s worth a read. Before you call your broker to try to buy Alex Rodriguez, it’s worth noting that established stars don’t really have a reason to sell off future earnings, if this exchange takes off it’s going to be marginal players and/or young guys heading into the draft or lingering in the minors who sell their souls. They could use the money a one-time payoff on their future earnings would bring.
There are so many problems with trading on human beings on so many different levels that I don’t really want to get into all of them, but here are a couple.
- The SEC would have to really monitor things for insider trading. Every time someone signs a $100M deal the opportunity will be there to profit on information, and there’s no speculation or interpretation of data involved. If the guy is going to make $100M guaranteed, his stock is going to soar.
- At some point during a future contract negotiation, a player is going to say, “I’ve got my investors to feed.”