As implementation of the Jumpstart Our Business Startups Act ("JOBS Act," get it) continues rolling forward there's little evidence of job-creating business startups being jump-started, but breaking down the old accredited investor rules should be enormous stimulus for gimmicky financial products. To wit here is an S-1 filed with the Securities and Exchange Commission announcing the intention of selling shares in Houston Texans running back Arian Foster.
This is structured as a stock offering but it's actually more like a loan. Imagine some billionaire loaned Arian Foster $10 million and in exchange Foster promised to pay the billionaire 20 percent of his future earnings. The idea basically is to securitize that $10 million, so that tens or hundreds of thousands of small investors can each own a piece of it. Unlike a real equity investment, the owners of the shares will have no decision-making authority over Foster.
It's easy to see why that might be attractive to Foster. Professional athletes have mass followings ("fans") who are often not only willing to invest large amounts of time in watching their favorite players perform, but to spend non-trivial sums of money on emotionally affiliating with key players through purchases of jerseys and branded apparel. People also spend large sums of money to get good seats to see live performances of the games, in part for the view but again largely for the emotional experience of shared fandom. For much the same reason that I paid money for a jersey in a rather ugly blue-and-orange color scheme that had Tyson Chandler's name on it, an Arian Foster fan might be willing to overspend on a securitized loan to Arian Foster. The calculation of the company offering the security is that fans are going to be willing to overspend so much on this that there will be surplus left over for them to feast on.
And they might be right! This is a dumb investment, but people make dumb investments all the time. And obviously people love to gamble on sports. So this could totally work. But logically speaking, it really would make more sense to do offerings of rookies who have much more need to hedge against injury risk.