A baseball minor-leaguer named Randy Newsom will break new ground having sold shares of his future major league earnings. A share of 0.0016% of his major league salary cost investors $20 each. Although this seems small, a quick glance at some of today's highest-paid baseball players reveals a potential investment windfall. What could a $20 investment in some of these players get you had they 'gone public'?
A minor-league pitcher with the Cleveland Indians, Newsom was working in obscurity this month on the crowded back fields at spring training in Winter Haven, Fla., distinguished from hundreds of hopefuls only by the red No. 41 on the back of his sweat-soaked blue uniform shirt.
"It's time to get down to business," he said after several strenuous sessions of fundamental drills such as covering first base.
The right-hander meant the business of pitching, because a good showing in camp could earn him his first promotion to AAA, the top level for minor-leaguers. But the word "business" means many things to the Tufts University graduate, whose entrepreneurial ambitions keep all his bases covered.
In January, his company, Real Sports Investments, sold 1,800 shares of stock in Newsom's future. For $20, anyone could buy a share of the 25-year-old's career, an investment that could net 0.0016% of his future major-league earnings.
How much could investors make? The average major-league salary was $2,866,544 in 2006 and $2,944,556 and 2007, so a 0.0016% investment based on those figures would have paid off $92.98 over two years. However, average baseball salaries generally increase sharply from year to year.
Though Newsom had 18 saves for the AA-level Akron Aeros in 2007, it isn't as if he's assembled a blue-chip portfolio during four years in the minors. Signed by the Boston Red Sox as an undrafted free agent in 2004, Newsom has gone a workmanlike 11-8 with a 3.29 earned-run average and 26 saves in 132 relief appearances.
"I'm not a guy scouts see and say, 'Definite big league material,' but I've always dreamed of being in the majors. I'm still here, so I've got a chance," the Cincinnati native said.
His company might not get to follow through on Newsom's business plan, though he is confident that scheduled meetings in April with the Securities and Exchange Commission and Major League Baseball will change that.
The company temporarily shut down in February when baseball officials and the players union questioned whether rules within baseball's collective-bargaining agreement or those set by the SEC had been broken.
Newsom refunded $36,000 that had been collected from clients and wants to assure everyone that his only underhanded dealings come from his submarine-style pitching motion.
"This was an idea to bring together players and fans," he said. "A lot of fans will love the chance to follow guys and help them. And players would love the chance to be financially stable."
Newsom pointed out that such options are common in individual sports like pro golf and pro bowling.
"For players, it's like insurance," Newsom said. "An athlete never knows what the future holds. There's a misconception about how much minor-leaguers make. The top draft picks do well; everybody else kind of struggles along."
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Not everything I post or say on foro are necesarily true facts. <- THAT is a fact! :blankstare: