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Thursday, November 14, 2013

Fantex Postpones Arian Foster IPO

Posted By on Thu, Nov 14, 2013 at 1:45 PM

click to enlarge Vernon Davis -- one player for sale, slightly used.
  • Vernon Davis -- one player for sale, slightly used.

A joke began making the rounds soon after local investment start-up Fantex started offering shares in the future earnings of professional athletes -- that this real-life form of sports speculation was just gussied-up fantasy football.

Unfortunately for Fantex's founder Buck French, there might be some truth to that analogy. With inaugural public offering Arian Foster out on injured reserve, the company has opted to postpone its first IPO indefinitely. Its $10 million in shares will languish while the Texans running back awaits surgery to fix a ruptured disc.

That doesn't bode so well for his football career or future earnings, of which Fantex now owns a 20 percent stake. Back surgery is, after all, one of the worst things that can happen to a running back.

With its initial game plan foundering, the company will now redirect energies toward its second draft, 49er tight end Vernon Davis. He's worth considerably less, according to company balance sheets -- $4 million for a 10 percent stake in future brand income, which won't include revenue earned from his other sundry enterprises. (Davis is also an interior decorator, Jamba Juice franchisee, and designer of a charitable gift app.) Not to mention Davis left Sunday's game early after sustaining a concussion.

That doesn't augur well for a company that enumerated numerous risks in its prospectus, injury being the first. It might not help that the company has chosen to cast its chips in a sport where players routinely get their brains rattled. Both Davis and Foster are handsome, marketable, telegenic young men, but their lifetime net worth could diminish greatly after one extremely brute tackle on the five-yard line. You can't say that about Twitter stock, no matter how much it waffles.

Such uncertainties have led skeptics to wonder if French's stock exchange innovation is just the stuff for fantasy.

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About The Author

Rachel Swan

Rachel Swan

Rachel Swan was a staff writer at SF Weekly from 2013 to 2015. In previous lives she was a music editor, IP hack, and tutor of Cal athletes.


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