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Sports Biz
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One Season |
The primary reason this wasn't going to work was because people would mostly want to trade and get a piece of athletes who were already too far along for an investment to make sense. Why would Tiger sell any piece of himself when he is already so valuable? Why, for that matter, would even a No. 1 draft pick sell a piece of himself?
Then Randy Newsom came along. The Cleveland Indians minor leaguer announced he was selling shares in himself, formed a company called Real Sports Investments and came on CNBC to talk about it. But after talking with Major League Baseball, the plan fizzled.
I decided that if a sports stock market was to make it with real money, it would have to be something like Protrade. For years, Protrade allowed fans to trade virtual shares of players for fake money.
A new site launched yesterday called OneSeason.com. It's basically trading virtual shares of players for real dollars.
This is how it works. Every day, OneSeason launches 3 IPO's, which is based on demand from its users. Once the IPO is launched and the amount of shares that will trade of that player are determined, that stock can be traded on the secondary market. Shares of KOBE shot up 1,153 percent in the first hour of trading. As of this writing, shares of the Los Angeles Lakers guard are trading for $62.65 and his market cap is $42,608.79.
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The site makes its money by taking a 5 percent fee from people that trade stocks that acquired in an IPO (Initial Player Offering), while taking a 1 percent commission for shares bought and sold. Their initial calculations say that they can make at least $50 million if the site hits three million users.
Whether or not the site will succeed, I'm not sure (I'm certainly intrigued). But one thing I'm pretty sure of; these guys probably aren't going to get shutdown due to any legal issues.
OneSeason.com's founder Michael Sroka walked me through every tough question I asked. Will the SEC go after you? "We're a virtual goods marketplace with no market maker or specialist," Sroka said. "And we don't receive any proceeds from the sales of the virtual goods. We just provide a forum for shares to be bought or sold, serving as a hyperactive matching engine very much like eBay."
Sroka also said that his company makes it clear that this isn't about profitability; it's more about fun and entertainment. He said that each person can only transfer $2,500 real dollars into an account for any 12-month period.
Could this be defined as gambling? Sroka said trading virtual stock in players is much like fantasy sports, which is primarily based on skill than chance. This game also has no definable odds.
The final issue is using players names, which we already know when tied to statistics is a fact and is not subject to copyright law.
As for the value of the players, Sroka says the value of their shares will not directly tied to stats, but since the value will be based on supply and demand anything that makes the player more or less relevant or popular in the public eye can factor into the price of the player stock.
If your portfolio isn't looking too good these days, maybe you should try a sportsfolio. Eli Manning (EMAN) is hitting the market in a couple hours.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes