Athlete-tracking stock startup Fantex raises $59.3m

Fantex, a provider of tracking stocks on athletes, has raised $59.3m in a private placement.

The San Francisco-based company has closed a private placement of Fantex Sports Portfolio I (FXSP I) Units, which are linked to the earnings of 20 professional athletes.

A total of just under six million share were sold at $10 per Unit, with UBS Investment Bank serving as the placement agent for the offering.

CEo and co-founder Buck French said, “In April 2014, Fantex pioneered a new asset class by offering the first-ever security tied to the earnings of a professional athlete.

“With the successful close of FXSP I, we’ve reached yet another milestone – the first security tied to the earnings of multiple professional athletes across several major sports.”

Fantex buys the rights to a player’s future earnings with a one-time fee, which it generates by selling enough shares in an IPO.

In exchange, the athlete gives Fantex a set percentage of all his future earnings, on and off the field.

The company currently has agreements with 20 athletes, 10 from the National Football League, six from Major League Baseball and four from the Professional Golf Association
Its first athlete agreement was with running back Arian Foster in 2013.

At the time, Foster pledged 20 per cent of his on- and off-field earnings to the company in exchange for the most of the proceeds from the planned $10.6m sale of his tracking stock.

However, he got injured just before his IPO, and the company delayed it the offering.

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