The Company Allowing Fans To Buy Stock In Their Favorite Athletes
A few weeks ago, I was introduced to a new business called Vestible. The company’s core idea is not necessarily new — an investment platform that allows fans to buy stock in their favorite athletes — but they have received a lot of media attention, and there appears to be a large number of people who are rooting for them to succeed.
Vestible was founded by Parker Graham and Yves Batoba, two former Oklahoma State football players. Like many sports fans of the past, Graham and Batoba frequently discussed why one player might be more successful at the professional level than another and wondered why a marketplace to profit off that knowledge didn’t exist.
But rather than wishing someone would create it, they decided to build it themselves.
Launching a company like this is extremely tedious. Similar to other alternative asset investment platforms, like Rally (collectibles) or Vinovest (wine), creating a new platform requires regulatory approval from both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Then, once the parent company is approved, each Vestible offering goes through its own individual process, mimicking the IPO timeline to bring the product to market.
Here’s how it works:
Vestible works directly with athletes and their representatives (agents, managers, financial advisors, attorneys, etc.) to onboard them to the platform.
The terms of the offering are set — ex. Vestible’s first athlete (Denver Broncos outside linebacker and former Ohio State player Baron Browning) is selling between 60,000 to 100,000 shares at $10 per share for 1% of his future earnings.
Retail and institutional investors can then purchase shares in the offering and receive monthly dividend checks based on Browning’s *on-field* earnings.
Failure to pay is mitigated because Vestible works directly with the athlete’s team to automatically remove the dividends from each game check. These dividends are currently being distributed monthly, but Vestible envisions a world where investors can eventually get paid immediately after each of Browning’s 18 NFL game checks.
Browning is in the last year of his rookie contract and is set to make $3.1 million with the Broncos in 2024. One percent of this year’s salary is $31,000, which would be split based on how many shares you own. But investors are essentially betting Browning will play well this year and earn a bigger deal, increasing their monthly distributions.
“Baron Browning is the perfect person for us,” Vestible co-founder Parker Graham told me. “He’s been injured, he’s been playing out of position. But if you watch him on film, you can see, there’s something different about this guy. And that’s why we were super excited to work with him because he’s in his contract year [with the Broncos].”
This isn’t financial advice, and everyone should always do their own due diligence before investing.
However, one key difference between Vestible and other companies like Big League Advance—which made waves by paying Fernando Tatis Jr. $350,000 for 8% of his future earnings before he signed a $340 million contract—is that Vestible isn’t raising a nine-figure institutional fund to build models that profit off market inefficiencies.
Instead, think of Vestible as a marketplace. It enables fans to buy stock in their favorite athletes. These athletes then offer investors upside via monthly distributions, and investors can even trade their shares at a later date on the secondary market.
“A player could go and have ten sacks or zero sacks, and [their share price] is going to move based on investor demand of the buys and sells in the market,” says Graham.
Vestible has a long way to go before it is considered a success. Entrepreneurship is hard, and many others have tried to solve athletic income-sharing agreements before.
But the reason this is so interesting is because, if successful, this same model can be applied to so many different categories.
For starters, Vestible could include off-field earnings, offering investors significantly more upside than just on-field contracts. It also doesn’t take a visionary to see why this would be helpful for athletes who work as independent contractors, like golfers, tennis players, boxers, and MMA fighters. And I’m sure there would be an appetite should Vestible eventually want to expand its offering to actors, artists, or musicians.
This is part of the “financialization of everything” trend we have seen over the last few years. Several platforms already let you participate in an asset's financial upside via fractional shares in real estate, collectibles, art, and wine. And if the rise of sports betting is any indication, professional sports would be an incredibly popular next step.
You can listen to my entire conversation with Vestible’s co-founders here or visit their website to learn more about the product and upcoming athlete offerings.
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I hope everyone has a great day. We’ll talk on Friday.
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Incredible idea. As a sports junkie myself, I've always wanted the opportunity to profit (or lose!) from my knowledge. Gambling has somewhat bridged this gap, but it's still gambling at the end of the day and not nearly as stable as I'm looking for. I'm curious what kind of volume they'll be able to achieve and what would be needed to have an active marketplace.