Anyone want to own a major league pitcher?

[Lathum]

From the Cincinnati Enquirer. I am sure this will hit the national media soon.

http://news.enquirer.com/apps/pbcs.d...70389/1062/SPT

Randy Newsom would like you to own a chunk of his potential major-league career. It'll cost you only 20 bucks.

Here's what you get: a share of a 25-year-old, sidearming relief pitcher who was an all-star in Double-A last summer and who just threw seven scoreless innings in the Arizona Fall League. Ideally, Newsom wants to start the season in Triple-A, pitch well, then get a midseason call-up from the Cleveland Indians.

Here's what he gets: your money and, hopefully, the money of others, up to $50,000, to help him continue to develop as a player without having to work an offseason job or pray the engine doesn't drop out of his 1998 Chevy with 160,000 miles on its odometer.


It's more complicated than that, of course.

What would you expect from a St. Xavier High grad with an economics degree from Tufts? Basically, it comes down to this: Newsom and two friends have formed a company called Real Sports Investments. Their intent is to ease the financial strain on minor-leaguers who were not high draft picks. Their method is to allow the public to invest in them.

Newsom is the guinea pig. "Somebody had to go first," he said. He's offering 2,500 shares of himself, at $20 a share. If he makes the major leagues, investors start making money. No one can own more than 5 percent of the shares; RSI doesn't want people walking ledges over this.

As Newsom explains: "It's not the stock market. If you're doing this solely for financial reasons, it's probably not the investment for you. If you're doing it because you love baseball and want to know you helped a player get to the majors, it's worth thinking about."

And really, why would you play fantasy baseball when you could own a hunk of the real thing?

The idea evolved over time, Newsom said, as he saw teammates struggle financially while trying to advance professionally. If you're making $800 a month playing in Florida's Gulf Coast League, you spend your offseason driving an express truck instead of working on your game.

"First-round draft picks and major-league players can train in the offseason. They can hire nutritionists. Money isn't an issue," Newsom said. "That widens the gap."

Newsom would know. I asked him to provide a self-prospectus. "I've faced a lot of adversity. I've defied the odds," he said. "I was undrafted. I went to a Division III college. I was overlooked in high school. Six or seven guys in my class were as good or better than I was. I've been in lots of situations where I had to turn heads to have a shot."

As with any investment, the potential for loss exists. He throws sidearm. Not many sidearmers in the big leagues. His fastball tops out in the high-80s. Not many like that, either. But his fastball sinks, his slider runs, and in 208 pro innings, he has allowed just seven home runs.

You pays yer money, you takes yer chance.

"I don't think I'm a bad investment," said Newsom. "It's a high-risk deal. I mean, IBM isn't going to blow out an elbow." Neither will IBM develop a back-door slider and win a Cy Young Award and sign for $30 million. It's a simple contract between player and owner: You're buying a share of his future major-league earnings. If he never makes the bigs, you never get paid.

A $20 investor in Newsom would need the right-hander to earn $1.25 million lifetime to break even. Anything north of that, you start raking it in. OK, maybe not raking it. If Newsom made this year the $26 million A-Rod's making, your take would be $416. Still, Newsom and friends hope to attract some clients with high earnings potential. And isn't following a ballplayer more fun than following a corporation?

Newsom has navigated the proper legal channels. He has filed all the needed SEC paperwork. It's very early in the process, but word of mouth has attracted national interest, including an inquiry from the Financial Times.

Meantime, Newsom is for sale. Own your very own hunk of sidearming overachiever. Soothe your Inner Steinbrenner. Twenty bucks. What the heck.

For more information, visit

realsportsinvestments.com.

[Lathum]

link to the website


https://www.realsportsinvestments.com/

[Young Drachma]

Interesting stuff and more productive than fantasy baseball. And then when a guy goes, "I own you..." they'll really mean it to some degree.

Golfers do it too, but their situation is a little different, especially given the politics of baseball players getting called up on some teams during some years. But clever stuff.

[Galaxy]

I believe Justin Wilson, in the Champ Car racing series, did the same thing in 2003 or 2004.

[sterlingice]

I wonder what the odds of a minor leaguer making 1.25M in the bigs would calculate out to (particulalrly one who is 26 an in AA- those have to be a bit of long odds)

SI

[Anthony]

the payout doesn't seem to be all that great. i can take that $20 and put it in my savings acct and at least get a miniscule return on that money, rather than give it to this guy and hope he gets a huge contract so maybe i can make about $400 10+ years from now. if he was 20 yrs old, maybe it'd be more enticing. but for someone like sterling said, mid-20's and only in AA, i'd sooner give that money to charity than to a lost cause. he needed to have started this like 5 yrs ago.

[Passacaglia]

Hey, what's a baseball thread without a steroids comment?

"I wonder what will happen when one of the guys for sale starts using the money for steroids."

[RainMaker]

It's actually a brilliant idea and I hope it catches on. Sounds like more fun than the stock market.

[Lathum]

Originally Posted by Hell Atlantic

the payout doesn't seem to be all that great. i can take that $20 and put it in my savings acct and at least get a miniscule return on that money, rather than give it to this guy and hope he gets a huge contract so maybe i can make about $400 10+ years from now. if he was 20 yrs old, maybe it'd be more enticing. but for someone like sterling said, mid-20's and only in AA, i'd sooner give that money to charity than to a lost cause. he needed to have started this like 5 yrs ago.

he made it blatently obvious you shouldn't do it if you are interested in the money.

[CU Tiger]

If hee is going to have advantages that arent afforded to him today, he should be prepared to pay out a larger % tomorrow.
Id say 30% of his MLB contracts should go to his investors.
Then Each investor would earn ~$100/year for each $1M is salary....that would be fair, I think, to all involved...

[digamma]

Does this fall under the regulation of the SEC?

Not all offerings of securities must be registered with the Commission. Some exemptions from the registration requirement include:

• private offerings to a limited number of persons or institutions;
  
• offerings of limited size;
• intrastate offerings; and
• securities of municipal, state, and federal governments.

http://www.sec.gov/about/laws.shtml

OH HAI, MR. ATTORNEY, I HOPES YOU HAVE GOOD MALPRACTICE INSURANCE.

[Fidatelo]

Didn't Michael Lewis present this idea in Moneyball (or maybe Liar's Poker)? Or am I thinking of someone else? I'm certain I read about this sort of idea years ago...

Either way, I'm excited to see it happen. I agree that this guy isn't giving quite enough back to the investors though.

[albionmoonlight]

Originally Posted by CU Tiger

If hee is going to have advantages that arent afforded to him today, he should be prepared to pay out a larger % tomorrow.
Id say 30% of his MLB contracts should go to his investors.
Then Each investor would earn ~$100/year for each $1M is salary....that would be fair, I think, to all involved...

Originally Posted by Fidatelo

Either way, I'm excited to see it happen. I agree that this guy isn't giving quite enough back to the investors though.

I think the answer there is for you to not invest. He has no incentive to make this "fair." He has an incentive to set the price so that he gets the largest possible amount of investment while committing himself to paying the smallest possible amount of return.

Certainly, this guy is going to get a novelty markup. Like someone noted above, you would do better with a decent savings account than with this guy.

[Fidatelo]

Originally Posted by albionmoonlight

I think the answer there is for you to not invest. He has no incentive to make this "fair." He has an incentive to set the price so that he gets the largest possible amount of investment while committing himself to paying the smallest possible amount of return.

Certainly, this guy is going to get a novelty markup. Like someone noted above, you would do better with a decent savings account than with this guy.

Right, and it's that reason that I won't even consider investing. But if this is going to become a legitimate enterprise for young athlete's (and not just a one-time novelty), I believe they will have to give up more. I suppose the market will eventually dictate what that amount is (and it very well will be different for each individual based on prospect status I would imagine).

[Anthony]

Originally Posted by Lathum

he made it blatently obvious you shouldn't do it if you are interested in the money.

why else would i be interested in giving this guy money? so he can live his dreams? who's going to give me money for my dreams?

not only is the return paltry, you would only get something on the miracle of a chance he has of getting a MLB contract. so not only are you likely throwing money away, it's not even going to a good cause.

this model can work, but the return on investment needs to be higher. constructed as-is, this is basically equivalent of e-pandhandling. seriously, this is exactly the same as a bum on the street saying "give me $20 to buy a lottery ticket. if i happen to become a millionaire i'll give you $400".

[Lathum]

I think people are missing the point.

HE clearly states in the article you should do this if you are a baseball fan. I think people would be interested in following his career, etc...

[Anthony]

it's called the internet. i can do the same thing for free if he started a blog. at least if i was a "Save The Children" sponsor i'd get a personal letter written to me from a hungry kid in a 3rd World country.


again, this could actually work, but in real life when someone is the beneficiary of the financial backing of a sponsor, the sponsor does so with the hope he'll get a return on his investment. if this kid wants charity, he should label it as such. at least at that point one could write off the $20 as a charitable donation. i bet what he would wind up giving back is .002 of his MLB contract. he's asking me to help make him a millionaire.

yeah, ok, the check is in the mail, kid.

[rkmsuf]

Originally Posted by Lathum

I think people are missing the point.

HE clearly states in the article you should do this if you are a baseball fan. I think people would be interested in following his career, etc...

you can follow his career or lack thereof for free

poor guy has to have a job. waaaaaaaa. no possible way those hours channelled into "training" make one bit of difference in his baseball career.

[Lathum]

Originally Posted by rkmsuf

you can follow his career or lack thereof for free

poor guy has to have a job. waaaaaaaa. no possible way those hours channelled into "training" make one bit of difference in his baseball career.

well I think it is the novelty.

You can go to the library and read a book for free but most people but the book.

I would view the $20 more entertainment dollars and less of an investment.

[rkmsuf]

Originally Posted by Lathum

well I think it is the novelty.

You can go to the library and read a book for free but most people but the book.

I would view the $20 more entertainment dollars and less of an investment.

I guess I'm not seeing the entertainment part them. Seems like a nice way for the guy to not have to work. Admittedly I don't get the appeal here.

[Anthony]

Originally Posted by Lathum

well I think it is the novelty.

You can go to the library and read a book for free but most people but the book.

I would view the $20 more entertainment dollars and less of an investment.

YOU CAN GET THE SAME ENTERTAINMENT FOR FREE!!!!

[Passacaglia]

Originally Posted by Hell Atlantic

YOU CAN GET THE SAME ENTERTAINMENT FOR FREE!!!!

You can also play blackjack for free. It seems like the same concept as gambling to me.

[rkmsuf]

Originally Posted by Passacaglia

You can also play blackjack for free. It seems like the same concept as gambling to me.

Would love to see the investors watch in horror as the guy gets up at noon everyday and heads down to mcdonalds. now that would be entertainment.

[Anthony]

Originally Posted by Passacaglia

You can also play blackjack for free. It seems like the same concept as gambling to me.

i have the chance of turning that $20 into more if i gamble it myself. i get immediate entertainment and enjoyment. i also get cute scantilly-clad girls bringing me a complimentary drink or two, depending on how long i can stretch that $20. maybe if i'm good i get a dinner comped.

all scenarios are better than giving a kid who told his friends "hey, i'm never gonna make it to the bigs - i'm friggin 26 yrs old and still in AA ball. how much you wanna bet i can get some chumps to give me money to help me 'train' so i can *snicker* 'train full time' and get a huge contract and give them a percentage of it. and by 'train' i mean work on sniping skills in Call Of Duty 4. hahahaha"

[Passacaglia]

Originally Posted by Hell Atlantic

i have the chance of turning that $20 into more if i gamble it myself. i get immediate entertainment and enjoyment. i also get cute scantilly-clad girls bringing me a complimentary drink or two, depending on how long i can stretch that $20. maybe if i'm good i get a dinner comped.

all scenarios are better than giving a kid who told his friends "hey, i'm never gonna make it to the bigs - i'm friggin 26 yrs old and still in AA ball. how much you wanna bet i can get some chumps to give me money to help me 'train' so i can *snicker* 'train full time' and get a huge contract and give them a percentage of it. and by 'train' i mean work on sniping skills in Call Of Duty 4. hahahaha"

There are totally baseball nuts who would be like that. Guys who probably wish they made it to the bigs but never came anywhere near as close as this guy. To them, it'll probably come off like they're "living the dream" themselves.

[Lathum]

Originally Posted by Hell Atlantic

i have the chance of turning that $20 into more if i gamble it myself. i get immediate entertainment and enjoyment. i also get cute scantilly-clad girls bringing me a complimentary drink or two, depending on how long i can stretch that $20. maybe if i'm good i get a dinner comped.

all scenarios are better than giving a kid who told his friends "hey, i'm never gonna make it to the bigs - i'm friggin 26 yrs old and still in AA ball. how much you wanna bet i can get some chumps to give me money to help me 'train' so i can *snicker* 'train full time' and get a huge contract and give them a percentage of it. and by 'train' i mean work on sniping skills in Call Of Duty 4. hahahaha"

I guess you just don't get it. Or don't want to.

The point is that you may prefer to play blackjack and think that is more entertaining. It may be more entertaining for people to follow this guy and live vicarously through him. Of course you are getting a poor ROI. But the point is you feel a part of something you otherwise could never be a part of.

OF course you could pick any player for free and track their career, but I would imagine it is a different feeling if you own a stake and had a part in his success, no matter how small.

[Anthony]

psssst....

(fantasy baseball).

[Logan]

Originally Posted by Lathum

well I think it is the novelty.

You can go to the library and read a book for free but most people but the book.

I would view the $20 more entertainment dollars and less of an investment.

He probably shouldn't call his company "Real Sports Investments."

[Ksyrup]

THE TICKER: Hoping for a bull market in the bullpen

February 4, 2008
Leave it to a submariner to come up with this scheme.

Randy Newsom, a pitcher in the depths of the Indians' minor league system, had been selling shares of himself until those humbugs at Major League Baseball and the Securities and Exchange Commission shut him down last week.

The deal: For $20, an online investor could buy .002% of Newsom's career baseball earnings. He had sold 1,800 shares -- worth $36,000 -- at the time he ceased and desisted, according to the New York Times. For those trying to do the math, the Times said Newsom would have to earn $2 million before his shareholders break even.

His initial investors will get their money back for now, but Newsom is determined to devise a way to make the plan right by the MLB and SEC.

"This idea is not going away," Newsom, 25, told the Times. "We want to add to the spectating experience for fans, and at the same time do something good for the players."

[Lathum]

Interesting. I recall the original article stating he had cleared the idea with the SEC

[Icy]

If cheap, i wouldn't mind to own a Pitcher to throw sticks for my dog to run after, but probably owning a 50mts runner would be more useful to go to the supermarket running so fast when i forget something.

[Anthony]

Originally Posted by Icy

If cheap, i wouldn't mind to own a Pitcher to throw sticks for my dog to run after, but probably owning a 50mts runner would be more useful to go to the supermarket running so fast when i forget something.

the only way this post could have made less sense would've been if you had a hamster run over your keyboard and hit "submit".

[Lathum]

wtf was that

[Passacaglia]

Made perfect sense to me...after two readings.

[digamma]

Originally Posted by Lathum

Interesting. I recall the original article stating he had cleared the idea with the SEC

While you can seek a "no action letter" from the SEC, this wouldn't be the kind of thing on which they would typically provide such a letter. His web site was almost a tutorial in how not to run a private securities offer. That was the impetus for my quote above about legal malpractice insurance.