By: Ben Okun
According to the Fantasy Sports Trade Association, there are 33,559,990 people playing fantasy sports in America today (http://www.fsta.org/industry_demographics). This means that there are nearly 34 million owners drafting, trading, cutting and bidding on a pool of professional athletes. Essentially, a fantasy team is an investment, in which an owner buys stock in/drafts a player and either holds on to that stock throughout the course of the season, or sells that stock/trades the player to obtain the most value possible. While many fantasy leagues do feature a cash prize for the winner, the investments that fantasy owners make in players don’t hold any real weight outside of the fantasy world.
This can all change with the potential inception of Fantex, which is “the first registered trading platform that lets you buy and sell stock linked to the value and performance of a pro athlete’s brand,” (https://fantex.com/). Fantex brings fantasy sports to life and allows people to own a small piece of their favorite player. The only athlete that has agreed to a deal with Fantex thus far has been Arian Foster, the All-Pro running back for the Houston Texans. Fantex will pay Foster $10 million upfront to receive a 20% stake in his future income including contracts, endorsements, broadcasting and other business revenue. Theoretically, investors will be able to buy stock in Arian Foster, through Fantex, that is directly tied to Foster’s brand.
Die-hard fantasy fans might jump all over this Fantex idea and suddenly think that they are investing experts. This however, would be a fatal mistake, as fantasy sports are very different from athletes’ real-life brands. Fantasy sports are based purely on a player’s statistics and performance. While an athlete’s brand is somewhat tied to those factors, much of an athlete’s brand involves off-field appeal, personality and intangibles that have nothing to do with the actual sport. Athletes that are amazing fantasy players might have no outside brand appeal at all, and those that have strong brands might not even be drafted in fantasy leagues.
While there are similarities between Fantex and fantasy sports, the differences are striking. Even though an athlete’s performance on the field can bolster their brand, there really is no correlation between the two. As a Fantex investor, you are hoping that the athlete has an illustrious playing and post-playing career, but this is almost impossible to predict. In all sports, there are Hall of Famers who retire and are never heard from again. There are also plenty of no-name, journey men that build up a powerful brand and go on to be successful in other, outside business ventures. Keep in mind too, that an athlete’s career can end at any moment due to a severe injury that could have a devastating effect on their brand.
Although Fantex provides a brand new, exciting way for sports fans to engage with their favorite athletes, I think potential investors would be wise to steer clear. A brand is so much more intricate and complicated than statistics, that there is no real way to project a brand’s future success. This, combined with the inevitable unpredictability of an athlete’s actual playing career, makes for an extremely shaky investment no matter which athlete’s brand you plan on buying stock in. Fantex seems to be targeting emotional fans that just want to root for certain players more than they already do, instead of business-savvy investors who have real knowledge of the stock market. From first glance, Fantex seems like a perfect medium to bridge brands and fantasy sports, an already booming industry. Although the connection is apparent, we are talking about two completely different things here.
There is a reason why it’s called “fantasy” sports; anyone can manage their own team and make any decisions they want with their players, without any true impact in “real life.” There is also a reason why branding (in athletes, celebrities and companies) is left to a team of public relations and marketing professionals; because they understand the landscape of the branding industry and are experts in shaping a brand no matter the circumstance. Building a brand is such a delicate process that incorporates forward thinking strategies, familiarity with competitors and a host of other outside factors that a fantasy sports expert would most likely overlook when drafting their team. This is why combining fantasy sports and branding can lead to a slippery slope, and as a sports fan, it is best to hop off the Fantex sleigh.
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