Profluence Sports by Andrew Petcash

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Investing In Athletes: The Newest Hot Trend

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Investing In Athletes: The Newest Hot Trend

Interesting development of companies helping to support athletes & providing investors with an "ETF" option.

Andrew Petcash
Apr 14, 2023
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Investing In Athletes: The Newest Hot Trend

www.petcashpost.com

Imagine you’re a young athlete with ambitions to become one of the next greats.

But there’s a problem…

You play an individual sport and can’t rely on a salary — prize money and endorsements is how you’ll make your money.

Here’s what it looks like:

  • 19 years old

  • no endorsements ($0)

  • no college degree

  • no pro matches yet ($0)

  • solid amateur career

So what do you?

Luckily you have some options (and companies are now being built to support you).

Let’s Dive In 👇

Individual Sports Are Expensive

Being an individual sport athlete can actually be a negative...

Image

Kiranpal Pannu is the 606th-ranked tennis player in the world.

Here’s his 2022 tennis season broken down:

  • + $6,770 prize money

  • + $10,000 coaching

  • - $9,500 hotels

  • - $5,000 training

  • - $20,000 in flights

    ─────────

  • ($17,730) Net Loss

During the 2022 season, 97 players (58 men and 39 women) ─ made over $1 million on the tennis court from prize money.

Keep in mind, that’s 97 tennis players out of roughly 3,000 (or 3.2%).

The REAL money is in endorsements.

Image

And this dynamic has led to players doing strange things...

At the 2022 French Open, Facundo Bagnis played with a hurt right calf.

He did this to earn the $65,000 in prize money (which he was later fined for).

Image

We're slowly seeing the death of individual sports — and luckily there are some interesting private companies addressing the issue of low player pay.

History of Investing in Athletes

With loads of expenses and no major prize money or endorsements in sight, players have typically had a few options:

  1. Retire

  2. Pick up side-jobs

  3. Accept money from individuals (often at shady terms)

If you dream of becoming the next tennis great, none of those options are ideal.

However, the legalization of sports betting + the rise of blockchain technology & digital collectibles created an opportunity for startups.

Over the past few years, we’ve seen the comeback of “investing in athletes”.

“Invest in Athletes” Companies

Companies like Mojo and PredictionStrike allow you to bet on an athlete’s future potential like a stock.

Think of them like “DraftKings + Robinhood”, but for trading shares of athletes.

There are also private equity-focused companies like Big League Advance (which funds the lives of promising Minor League baseball players before they reach the pros).

And there are also some fan-led athlete investing platforms like Carry Golf and Globatalent.

But when you look at where the space is going….

There is a company doing something very interesting.

FANtium

NFT-based athlete investment platform FANtium raised a $2M pre-seed round last October (and have hit the ground running ever since).

So how does it work?

Fans can invest in an athlete (therefore funding their expenses) and garner access to their future earnings.

Last month, 19-year-old Felix Mischker raised $52,000 on FANtium enabling him the ability to pursue his professional career.

The platform tokenizes a certain amount of future season's prize money and sells those shares as NFTs to fans via the FANtium platform.

Meaning…

  1. upfront cash for athletes

  2. future returns for fans

And when viewing their website…

It looks like they’re about to announce a few more soon (including a women’s tennis player).

So where is all of this headed…

For investors, it’s intriguing because you could create an ETF-type portfolio where you bet on 20 athletes.

And only 1-2 of them need to have a great career for you to net solid returns.

For players, this creates the opportunity to pursue their professional careers with full focus.

Going Forward

The global sports market encompasses 97% of the world’s population and is a multi-trillion-dollar niche.

Investors are constantly on the lookout for the next big thing — one of which is the ability to invest in the success of athletes.

A few companies in the past have attempted to do this and ended up falling short.

The evolution of sports betting, daily fantasy, alternative investments, web3, and athlete empowerment may prove to be the difference in timing.

I find FANtium extremely interesting (and with the most potential in the space).


Podcast 🎙

Today’s guest is Jonathan Ludwig, CEO & Co-Founder of FANtium.

FANtium is taking a unique approach to “investing in athletes” and has great traction in its first year.

You’ll enjoy this episode as we discuss:

  • Felix Mischker raising $52,000 on Fantium

  • the possibilities web3 technology enables for sports

  • idea behind Fantium, current traction, and future initiatives

Check out the podcast episode here.

Not only did Jonathan exit his 1st company, but he was also an early investor in Sorare ($4.3B valuation). Lots to learn from this one.


Thanks for reading (and listening today)!

Have a great weekend.

Peace,

AP

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Investing In Athletes: The Newest Hot Trend

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