When Athletes IPO

Remember the jock

exchange that Michael Lewis wrote about in the first issue of Portfolio?

The idea was that an exchange could be set up where the assets traded were not

shares in companies but rather shares in athletes. Well, it hasn’t happened

yet – and if Formula One star Lewis Hamilton has any say in the matter,

it might not happen at all. For why bother with the ghetto of a jock exchange

when you can simply list

yourself directly on a major stock exchange? Cole Moreton reports:

The 22-year-old is apparently considering floating himself on the stockmarket…

His father, Anthony, and specialist advisers are considering a range of business

moves. In one remarkable plan, a new company would be set up with the driver

as both its major asset and shareholder – and sell off 10 per cent of

its stock on the London stock exchange for about $100m.

That would give him a lump sum now – before he has a chance to crash

his car at high speed, lose his nerve or go off the rails as a result of the

luxurious new life he can enjoy as a superstar.

The results of England’s experiment in listing football clubs were, to put

it mildly, unspectacular; most of them have been delisted by now. But at least

a football club can last indefinitely; stock in an individual athlete, by contrast,

is by definition a wasting asset. Investors would buy it not in the hope of

capital gains, but rather to reap as much in the way of dividends as possible

before the athlete in question’s career came to an end. While most stocks hold

out at least the potential of massive upside, then, an athlete’s stock would

probably have more downside than upside. Which would make it a good investment

only for the most sophisticated of investors.

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