FanPost

start up venture: in 2010 you can buy stock in the draft prospects




I comment on BE fairly regularly. 90% of my ideas ilicit vulgar responses from the majority of the community (my proposal to trade for Baron Davis; my proposal to trade for Lou Williams; my suggestion that Joel Przybilla belongs on the Heat).......I apologize for using BE as a forum to gauge interest in this start-up venture, but I figured that there is no greater concentration of NBA maniacs in the world than on Blazers Edge. So, here it goes.....

I am working with a company called Thrill Capitall (www.thrillcapital.com). We hope to create a "stock exchange" of sorts with NBA contracts. If we were already up and running, this is how it would work:

Realizing that his hype may never be higher, Ricky Rubio comes to us before the draft wanting to lock in some profit right now. So, he signs a contract whereby he auctions off 50% of all his future basketball income in exchange for a fixed payment now.  The 50% interest will be divided into hundreds of thousands of shares.

So, if AK1984 is convinced that Ricky Rubio is the next Jason Kidd, and will make over $100 million over the course of his career, then AK1984 will bid per share at a pro-rated price below $50 million. So, for the sake of simplicity, lets say that AK1984 buys all of Ricky Rubio's 50% shares in exchange for $40 million dollars. Then, if Ricky Rubio winds up making $100 million over the course of his career, then AK1984 gets $50 million (50% of $100 million), and makes a profit of $10 million.

But, if Rubio sucks up the joint, and turns out to be no better than Dan Dickau, and only makes $20 million over the course of his career, then AK1984 gets $10 million (50% of $20 million), loses $30 million, since he paid Rubio $40 million. This is a way for Rubio to insure himself.

The fun part will be that as long as AK1984 owns "stock" in Rubio, he will be able to trade his stock on our trading platform (just like the NYSE or Nasdaq). So, lets say that Rubio's first game as a pro he puts up a 31/14/8 line with 5 steals, AK1984 may be able to sell a "share" of Rubio for a lot higher than the prorated $40 million he paid for him.

Essentially, its a way for players to insure themselves by putting the risk on investors (fans), while allowing investors (fans) to profit off of heady investments in good players.

Any questions? Comments? Suggestions? Personal Insults? Please, the more comments the better.

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