MLB hurler seeks shareholders
Randy Newsom would like you to own a chunk of his potential major-league career. It'll cost you only 20 bucks.
Here's what you get: a share of a 25-year-old, sidearming relief pitcher who was an all-star in Double-A last summer and who just threw seven scoreless innings in the Arizona Fall League. Ideally, Newsom wants to start the season in Triple-A, pitch well, then get a midseason call-up from the Cleveland Indians.
Here's what he gets: your money and, hopefully, the money of others, up to $50,000, to help him continue to develop as a player without having to work an offseason job or pray the engine doesn't drop out of his 1998 Chevy with 160,000 miles on its odometer.
It's more complicated than that, of course.
What would you expect from a St. Xavier High grad with an economics degree from Tufts? Basically, it comes down to this: Newsom and two friends have formed a company called Real Sports Investments. Their intent is to ease the financial strain on minor-leaguers who were not high draft picks. Their method is to allow the public to invest in them.
Newsom is the guinea pig. "Somebody had to go first," he said. He's offering 2,500 shares of himself, at $20 a share. If he makes the major leagues, investors start making money. No one can own more than 5 percent of the shares; RSI doesn't want people walking ledges over this.
As Newsom explains: "It's not the stock market. If you're doing this solely for financial reasons, it's probably not the investment for you. If you're doing it because you love baseball and want to know you helped a player get to the majors, it's worth thinking about."
And really, why would you play fantasy baseball when you could own a hunk of the real thing?
The idea evolved over time, Newsom said, as he saw teammates struggle financially while trying to advance professionally. If you're making $800 a month playing in Florida's Gulf Coast League, you spend your offseason driving an express truck instead of working on your game.
"First-round draft picks and major-league players can train in the offseason. They can hire nutritionists. Money isn't an issue," Newsom said. "That widens the gap."
Newsom would know. I asked him to provide a self-prospectus. "I've faced a lot of adversity. I've defied the odds," he said. "I was undrafted. I went to a Division III college. I was overlooked in high school. Six or seven guys in my class were as good or better than I was. I've been in lots of situations where I had to turn heads to have a shot."
As with any investment, the potential for loss exists. He throws sidearm. Not many sidearmers in the big leagues. His fastball tops out in the high-80s. Not many like that, either. But his fastball sinks, his slider runs, and in 208 pro innings, he has allowed just seven home runs.
You pays yer money, you takes yer chance.
"I don't think I'm a bad investment," said Newsom. "It's a high-risk deal. I mean, IBM isn't going to blow out an elbow." Neither will IBM develop a back-door slider and win a Cy Young Award and sign for $30 million. It's a simple contract between player and owner: You're buying a share of his future major-league earnings. If he never makes the bigs, you never get paid.
A $20 investor in Newsom would need the right-hander to earn $1.25 million lifetime to break even. Anything north of that, you start raking it in. OK, maybe not raking it. If Newsom made this year the $26 million A-Rod's making, your take would be $416. Still, Newsom and friends hope to attract some clients with high earnings potential. And isn't following a ballplayer more fun than following a corporation?
Newsom has navigated the proper legal channels. He has filed all the needed SEC paperwork. It's very early in the process, but word of mouth has attracted national interest, including an inquiry from the Financial Times.
Meantime, Newsom is for sale. Own your very own hunk of sidearming overachiever. Soothe your Inner Steinbrenner. Twenty bucks. What the heck.
For more information, visit realsportsinvestments.com.
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Real Sports Investments Update
by David Laurila
Several news entities and blogs have written about Real Sports Investments (RSI) since Randy Newsom was featured in Prospectus Q&A a few weeks ago. As a result, a number of new questions have been raised. Newsom responded to some of them for BP.
David Laurila: A recent report claimed that RSI has ìmet a legal obstacle from the Securities and Exchange Commission and was, or will be soon, shut down.î Is there any truth to that?
Randy Newsom: I think there have been some serious misrepresentations in the news about RSI and our business, including that one. We have not heard from the SEC and in no way knew or think that the SEC will get involved with RSI. To be honest, our goals are to help players and include fans, and as a result we made a conscious decision from the beginning to be as open and honest as a company can be. We have outlined everything, tried to follow the appropriate channels, tried to get as much information out as we could, and we have nothing but positive and honest intentions. I cannot tell you how incredible the fans and players have been in this whole process. They have shown such incredible support and we now know that our business does indeed have both a supply and demand, and we are going to do everything we can to perfect things so that we include everyone in the process. WeÃre a new idea and a lot of people who just look at it on the surface donÃt fully understand everything about the company or even the idea.
DL: Another report said that all money invested in RSI has been returned to the investors. Is that accurate, and if so, why?
RN: That is accurate. We have decided to slow down and partner with Major League Baseball in order to develop a system that will work for the entire baseball community. We believe that it would not be fair to keep the money of our members without a concrete timeline. We felt it would be best to refund all of our shareholdersà money and allow them first access when we re-offer my shares.
DL: What kind of feedback have you received since your interview was published two weeks ago?
RN: ItÃs been incredible, almost overwhelming. Fans are truly excited; it is tangible. Players and fans alike have been contacting us with stories, kind words, ideas, and just overall support. Even the media has been great, and a lot of the sources we have talked to have allowed us to explain our idea and have been fair in their reporting. In the past couple days it seems that some reporters have been going on second hand information and thus some misinformation has been reported, but I guess that is to be expected in the information age. We are still extremely enthusiastic and optimistic about the future of RSI. Our members have been great, and we are working as hard as possible to provide them with what they are telling us they want.
DL: What comes next for RSI?
RN: We are working with as many people, groups, and companies as we can to allow this idea to become a long term viable option for players and fans. We are hard at work right now working with experts in many different fields so that we can provide the most efficient platform possible. It is a process, and it will take a little bit of time, but we are quite positive that this transition will allow RSIÃs goals to be accomplished in the present and continue well into the future. Personally, IÃm really excited that RSI has gained so much positive momentum. Our members have been amazing. They are really good people and fully committed to the goal of helping players and getting the fans involved, and I think thatÃs why the future is going to be great for RSI, fans, and players.
http://www.baseballprospectus.com/unfiltered/
by David Laurila
Several news entities and blogs have written about Real Sports Investments (RSI) since Randy Newsom was featured in Prospectus Q&A a few weeks ago. As a result, a number of new questions have been raised. Newsom responded to some of them for BP.
David Laurila: A recent report claimed that RSI has ìmet a legal obstacle from the Securities and Exchange Commission and was, or will be soon, shut down.î Is there any truth to that?
Randy Newsom: I think there have been some serious misrepresentations in the news about RSI and our business, including that one. We have not heard from the SEC and in no way knew or think that the SEC will get involved with RSI. To be honest, our goals are to help players and include fans, and as a result we made a conscious decision from the beginning to be as open and honest as a company can be. We have outlined everything, tried to follow the appropriate channels, tried to get as much information out as we could, and we have nothing but positive and honest intentions. I cannot tell you how incredible the fans and players have been in this whole process. They have shown such incredible support and we now know that our business does indeed have both a supply and demand, and we are going to do everything we can to perfect things so that we include everyone in the process. WeÃre a new idea and a lot of people who just look at it on the surface donÃt fully understand everything about the company or even the idea.
DL: Another report said that all money invested in RSI has been returned to the investors. Is that accurate, and if so, why?
RN: That is accurate. We have decided to slow down and partner with Major League Baseball in order to develop a system that will work for the entire baseball community. We believe that it would not be fair to keep the money of our members without a concrete timeline. We felt it would be best to refund all of our shareholdersà money and allow them first access when we re-offer my shares.
DL: What kind of feedback have you received since your interview was published two weeks ago?
RN: ItÃs been incredible, almost overwhelming. Fans are truly excited; it is tangible. Players and fans alike have been contacting us with stories, kind words, ideas, and just overall support. Even the media has been great, and a lot of the sources we have talked to have allowed us to explain our idea and have been fair in their reporting. In the past couple days it seems that some reporters have been going on second hand information and thus some misinformation has been reported, but I guess that is to be expected in the information age. We are still extremely enthusiastic and optimistic about the future of RSI. Our members have been great, and we are working as hard as possible to provide them with what they are telling us they want.
DL: What comes next for RSI?
RN: We are working with as many people, groups, and companies as we can to allow this idea to become a long term viable option for players and fans. We are hard at work right now working with experts in many different fields so that we can provide the most efficient platform possible. It is a process, and it will take a little bit of time, but we are quite positive that this transition will allow RSIÃs goals to be accomplished in the present and continue well into the future. Personally, IÃm really excited that RSI has gained so much positive momentum. Our members have been amazing. They are really good people and fully committed to the goal of helping players and getting the fans involved, and I think thatÃs why the future is going to be great for RSI, fans, and players.
http://www.baseballprospectus.com/unfiltered/
