Investing in People
If you’re reading this, you probably invest in corporations on the stock market. But what if, instead of companies, you could invest in people you believe in?
Maybe you’ve followed Lionel Messi since he started at Barcelona. The football star just earned US$130m with Paris Saint-Germain; imagine the returns if you had made an early investment in him.
Every nine-figure idol begins from a place of relative obscurity. Investing in the early careers of athletes has been an alternative asset class for the rich for a long time.
A real world example is baseball player Fernando Tatis Jr., who signed away an undisclosed portion of his future earnings in exchange for upfront cash when he was a teenager. With a 14-year, US$340m contract signed in 2021 with the San Diego Padres, investors Big League Advance are in for a major payday.
But can a retail investor get in on the action? It’s not easy. One of the biggest music artists in the world today is South Korean boy band BTS, which generated $1b in 2021. Its management firm Hybe is publicly listed in South Korea under the ticker 352820 and is currently valued at approximately US$6b. The majority of Hybe’s revenue comes from BTS’ performance, making an investment in the company a reasonable surrogate for backing the South Korean boy band.
Back in December 2020, YouTube’s (NASDAQ: GOOGL) largest creator MrBeast tweeted he wished he was able to invest directly in content creators. But this type of investment is still in its infancy, and has already been dealt a major setback.
Sportblx made a splash in 2020 when Charlotte Hornets rookie PJ Washington Jr. sold 10,700 shares of preferred stock at US$100 a piece in a company that controlled his earnings. The move ended in a lawsuit that is still ongoing. Its outcome could determine if this type of investment gains notoriety.
Which individual do you wish you could have invested in when they were starting out?