What makes Global Fan Exchange different from Fantex and other sports platforms?
By Vanessa Malone
Global Fan Exchange (GFX) is a global hub for fans to invest in and ultimately trade shares tied to the income streams of their favorite professional athletes, musicians, and entertainers.
Our sports division is led by former NFL executives and players Ryan McNeil, Ray Farmer, and Garrick Jones. We are actively recruiting U.S. and international athletes to offer their branded shares to all eligible fans, 18 or over.
We believe GFX represents a natural and exciting evolution of fan engagement. Athletes are given an alternative financing tool to get a head start in their careers and compete on a level playing field, while fans are given the opportunity to own a true equity stake in the future of their favorite athletes.
While we’ve already seen other entities begin to play around with the idea of creating investment vehicles around sports, we believe the GFX approach has the ability to truly change the game.
In this week’s blog, we explore past approaches to athlete financing and what makes GFX unique.
What’s been attempted in the past:
High-risk, high-interest loans
Today’s financing options for athletes include high-interest debt or non-recourse loans, which, of course, need to be paid back. These loans could have strict conditions and include predatory rates of 15–30%. Before GFX, innovative alternative to high-interest loans were limited.
GFX Approach: With GFX, we take an athlete-first approach and empower athletes to invite their fanbase to invest and jump-start their careers. The capital raised is not a loan and does not need to be paid back, ever. Athletes raise crowdfunded capital by selling shares that make up a small percentage of their future professional contract earnings for a fixed number of years.
The GFX sports team is made up of former NFL players, NFL execs, crowdfunding pioneers, and technologists that work closely with the athlete and team to structure each crowdfunding offering to best suit the athlete’s needs. GFX helps athletes brand their offering, select the appropriate crowdfunding portal, launch the investment opportunity to fans, and continue fan engagement. We believe GFX allows athletes to accelerate their financial independence with a revenue stream controlled by the athlete and their performance.
Fantex and structural inhibitors
Fantex was a platform that allowed fans to invest in securities tied to the cash flows of professional athletes’ player and brand contracts. Investors bought “tracking stocks” of the athlete’s brand value. Notably, the actual stock was in Fantex itself, rather than the athlete’s company. Due to the structure of each offering, the athletes had to go through a “quiet period” which prevented marketing efforts during that time. Fantex completed 6 IPOs, with the last occurring in 2016. The company has since closed its platform to individual investors.
GFX Approach: We believe that the idea of a “quiet period” causes unnecessary friction for a concept that relies so heavily on the athlete’s engagement with their fans. GFX athletes we recruit will leverage equity crowdfunding so they may compliantly promote the investment opportunity throughout the offering. We believe GFX represents the ultimate fan engagement experience, where athletes can engage their fans in an entirely new way and invite them to be part of their journey from the start. Further, the shares that athletes sell will only be tied to the athlete’s professional player contract.
DREAM Fan Shares high barrier of entry
DREAM Fan Shares was the platform that NBA player Spencer Dinwiddie utilized to sell his blockchain bond for $150,000 a token. Investors are paid principal and interest on his current contract. Dinwiddie utilized Regulation D for the offering, where only high-net worth individuals could participate.
GFX Approach: We believe the price point and offering vehicle severely limited the pool of sports fans who were interested and able to invest in the Dinwiddie offering. Dinwiddie has 248,000 followers on Instagram alone. If even 10% of his fans converted into investors at a reasonable investment minimum it could’ve created the potential for Dinwiddie’s token offering to create ~25,000 proud, loyal shareholders with a vested interest in his entire professional basketball career. On GFX, fans will be able to participate in the initial offerings for as little as $25. After any required holding period, we aim to make shares available to trade for all fans over 18 on the Upstream global stock exchange and trading app.
We are still in the beginning stages of these new types of sports investment opportunities. Especially at a time when COVID-19 has taken away the joy of crowded sports arenas and large viewing parties, investment opportunities like these could present fans with a new way to engage and interact with athletes. We hope GFX will help to fuel these opportunities.
Interested sports fans can learn more and join the investor waitlist at https://globalfanexchange.com/. Interested agencies and athletes can reach the management team at firstname.lastname@example.org.