The guy who made the deal with Fernando Tatis is heavily criticized and looked at in a negative light for his business model. My guess is that perception will be the same here in the mass media.
That has parts of a decent argument, although kind of blending three different things: 1) a 'broker' type role of helping one get the best deal, 2) true speculative investment capital and 3) a loan which has defined interest, repayment etc.. Ironically if they were loaning these kids 100K and asking for 15% interest + less than 2yr payback (and they are actually getting wayyyyy more than that) THEN we'd definitely consider it borderline loansharking, usurious and exploitive.
Well maybe but doesn’t it cut both ways in that nobody else is willing to take the risk of paying a high school kid a six figure salary. Therefore they can set terms. Plus in most places you can’t sign a contract if you are under 18 so at a minimum you need a parent/guardian involved. And yeah, you should hire a lawyer to assist you. Maybe an accountant as well. But unless someone is taking a huge chunk of future earnings I’m not sure it is such a bad deal. If you end up a star and get Steph Curry money, and OTE gets 4 million/year they did great. If you are the end of the bench guy earning the league minimum and OTE only gets $10000 it’s a loser deal. And frankly nobody knows for sure if any kid they sign will end up as Curry or Justin Anderson ($125000) when a kid is 16. Frankly, based on his college career where he played at a decidedly non-power school in Davidson, I doubt Curry would have been a OTE candidate. The much travelled Anderson on the other hand played at Virginia. He might have been.
Until someone actually sees the terms of these deals it’s impossible for us to tell if it is fair or
Yeah, top notch academics. LOL. Probably not even up to the worst basketball factories and those are basically reviewing SAT prep books for 6 hours a day. They won’t even have the incentive to do that since going to college isn’t in the plans.
Just reiterating their pitch
Yeah very true. And reflecting on my post, the ongoing NCAA setup simply disperses the exploitation to thousands of advertisers and bureaucrats (led by despicable Emmert) and I/we accept this because its ingrained in our culture. But it is also to a degree exploitive writ large. We dangle the chance of NBA in front of 4,000+ players and reap the entertainment and $ from their talents and hard work, then less than 2% of them reach their goal of NBA to make any real money off their efforts. Yes they get an education and some understand its only a college gig, but even there it still exploits the dream a little bit and historically the education is cheapened by 'gut' classes etc.. I guess I just like my grift a little more out in the open.
Tatis apparently disagrees. He sees it as a cost of getting the resources he needed to maximize his talent and potential and the payout he owes is not important. Maximum of 10%, but no one outside him and the company know the %.
Does his opinion really make the whole thing either good or bad? The real sports doc painted the Tatis guy in a very bad light. Without the numbers it’s tough to make an informed decision and it is also open to interpretation at what point it goes from the cost of business to taking advantage of someone
It’s basically the Kevin “Mr. Wonderful” O’Leary approach to most deals on Shark Tank. There is a reason most people turn it down, but there is a reason some people take it.
I don't know anything about the "real sports doc" but Tatis seemed totally focused on how the deal might speed his development and if it got him to a big contract sooner than the traditional route the percentage to the "company" was a small price to pay.
Your points on whether it helped his development aside.... how on earth does his decision show you that he understands the compounding of money? You could discount his future cash outflows back at an absurd rate and I guarantee you it's going to be nowhere near what he received up front.
I wasn't referring to compounding the upfront money. That's nothing in Tatis' equation, or the OTE players' equations.
I do not believe it is the case for this. I've found one article that referenced media/sponsors being the main sources of revenue. I don't think the model would work here since they just don't offer enough above what a major D1 program would (housing/food already paid for, NIL opportunities almost certainly better in college).
www.overtimeelite.com
Yup.
I feel like you're misunderstanding people's reactions to this. I've seen very few people questioning why a player would sign up for a couple hundred grand instead of playing in college. I've seen quite a few questioning how the investors will make this a profitable venture, which is still very much in the air.
Yep, this makes a lot more sense for high school juniors and younger $ wise and possibly basketball wise. The education aspect of the 'school' becomes a lot more important (I have no clue, do they have teachers?) but fans/the public don't worry about that at tennis academies or other similar sports. Plus of course if this is a short-lived deal destined to be gobbled up grabbing the $$ early is the way to go.
