Fantex

About Fantex

Fantex, Inc. operated as a financial services and brand development company, introducing a novel asset class by securitizing the brand earnings of professional athletes. Founded in 2012 by former Benchmark Capital general partner David Beirne, alongside Buck French and Dave Mullin, the company aimed to create a stock market for human performance. The firm's business model involved paying an athlete a large, upfront sum in exchange for a percentage of their future brand-related income, which included salaries, endorsements, and other appearance fees.

Fantex would then structure and register these acquired income streams as tracking stocks with the U.S. Securities and Exchange Commission. These securities were subsequently offered to the public through an Initial Public Offering (IPO) on its proprietary trading platform, Fantex Brokerage Services, a FINRA-registered broker-dealer. This structure provided investors with a publicly-traded security designed to pay dividends based on the athlete's earnings, while the company generated revenue through a 1% commission on trades executed on its platform and by retaining a portion of the IPO proceeds. The first successful IPO was for NFL tight end Vernon Davis in April 2014, after an initial attempt with running back Arian Foster was postponed. Over its operational period, Fantex completed six IPOs for athletes, all in the NFL, raising a total of $25.8 million.

The company's platform was designed to serve individual investors seeking to diversify their portfolios with assets uncorrelated to traditional financial markets. However, this venture faced significant challenges. In August 2016, Fantex closed its platform to individual investors, and co-founder and CEO Cornell "Buck" French departed in March 2017. The company also faced legal disputes, notably an arbitration case where a contract with NFL player Mohamed Sanu was voided after it was determined Fantex had acted as an unlicensed agent. Ultimately, the innovative model could not be sustained, and its brokerage arm is no longer registered with FINRA.