Athletes Investing (possibly gambling) On Future Trends
Breakdown of athlete investments in crypto, wine, weed, and digital collectibles.
It’s fair to say that the markets have been poor so far in 2022.
Prices are sky-high for the things we want/need to buy and prices are dropping greatly for the assets we own such as stocks and crypto.
All of this data got me curious:
How are athletes who invested in crypto impacted?
How did athletes who made bets on growing trends fair over the years?
Let’s dive in 👇
Athletes Impacted By Crypto Decline
In November, Odell Beckham Jr. signed with the Rams and announced that he would be taking his salary in Bitcoin (valued at ~ $64,000 at the time).
It reached its all-time peak in November at $69,000 but has sunk down to $30,000 as of yesterday — less than half of the November value.
Beckham’s original salary, valued at $750,000 in Bitcoin, is down to just above $350,000 before tax.
However, you have to keep in mind that NFL players are paid weekly, so OBJ might have been cashing out along the spiral down.
Adding to that, Cash App reportedly paid OBJ (and Aaron Rodgers) 7-figures in marketing money (cash) to take their contracts in Bitcoin as publicity stunts.
Here’s what’s interesting about that…
Part of Beckham’s and Rodgers’ Cash App collaborations involved giving away the equivalent of $1 million USD in Bitcoin to fans — all of whom, if they kept the Bitcoin are deep in the red.
Something else to note…
NFL players aren’t technically allowed to be paid in Bitcoin so this is how it works:
The team sets up account wire instructions with payment product Strike and are instructed to send the designated percentage of the player's game checks into that account.
From there, Strike immediately converts the US Dollar into Bitcoin and deposits it into the player’s account. When the money hits the athlete’s account/wallet, they see Bitcoin, not USD.
It’s essentially a direct deposit for Bitcoin that helps sidestep the current NFL rules.
I wrote about what athletes are getting paid in Bitcoin back in November.
In the short term, taking contracts in Bitcoin looks foolish, but in the long term, it could tell a different story. No one really knows.
Here are some investments that athletes have made in unique categories over the recent years that have had far different outcomes.
ViolaBrands: Al Harrington
Former NBA star Al Harrington took a big bet on the marijuana industry after seeing its path to legalization become clearer.
In total, Viola has raised $34 million and is valued at over $100 million. Harrington invested $6 million himself and owns about 40% of the company.
A handful of current and former NBA players are investors:
J.R. Smith
Ben Gordon
Allen Iverson
Josh Childress
Kenyon Martin
DeMarcus Cousins
The future of cannabis is a fairly safe bet at this point.
The government isn’t putting the kibosh on a business that could generate $65 billion in sales by 2030 (it’s already legalized in 37/50 states).
Al Harrington has also launched his own VC arm in the marijuana business — so far he has provided $1M checks to four different founders.
His goal?
To make 100 millionaires in the marijuana industry.
Bad Boy Vodka: Dennis Rodman
In 2013, Rodman tried to follow in the footsteps of other athletes/entertainers that have put their brand behind an alcohol company.
Hence, the arrival of Bad Boy Vodka.
“Bad Boy Vodka characterizes a tough and edgy, yet smooth and classic
taste; a perfect representation of whom and what I am all about.” - Rodman
The plan was to sell $20 bottles and if you bought 1,000,000 bottles ($20M) you could arrange a meeting with Dennis Rodman.
The Bad Boy Vodka brand was launched under the Premier Brand alongside CEO Jorge Olson.
It didn’t last long.
Not all trends are capitalized on successfully by athletes — it doesn’t help when you have a DUI and are trying to promote an alcoholic beverage either.
Here are two current athlete investing trends I’m watching…
Athlete Investments Playing Out
Two emerging athlete investments have taken shape over the last few years.
NBA players and wine
Dwyane Wade owns his own company Dwade Cellars.
Amare Stoudemire launched his own Kosher wine and so did Seth Curry.
C.J. McCollum bought his own vineyard.
Carmelo Anthony has been featured on a wine magazine and Lebron James is rumored to have a glass of wine with dinner nearly every night.
There’s nothing wrong with wanting to get in on the profitable alcohol industry, but wine isn’t an easy one to gain legitimacy in quick.
It will be interesting to see how this trend plays out over the next few years and if more athletes get involved.
Invest in what you use — that’s what they say, right?
Athletes and NFTs
I’ve covered this before and won’t get too deep into the details, but many athletes have viewed NFT companies as the next frontier.
For example…
Tom Brady co-founded Autograph to help athletes monetize their brands with non-fungible tokens.
His NFT company has raised $170M in funding and even secured a partnership with DraftKings.
With a $700M valuation, Tom Brady's stake is worth many millions.
And then there’s a bunch of athletes just owning NFTs in popular communities such BoredApes and CryptoPunks:
Neymar Jr.
Von Miller
Dez Bryant
Steph Curry
Lamelo Ball
Serena Williams
Shaquille O’Neal
All of whom have paid over $100,000 to earn their digital collectible and ticket into the community.
I always find it interesting to see how athletes are investing their money into new trends.
There have been winners and losers (as with anything) along the ride.
Weed was a big bet for Al Harrington that paid off.
The crypto, wine, and NFT bets are yet to unfold.
Have a great weekend and we’ll talk on Sunday during the weekly roundup.
Peace,
AP
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