MLB first: You can buy stock in Angels rookie pitcher Heaney
Want to buy stock linked to the brand of Angels rookie left-hander Andrew Heaney? Fans will soon get that chance.
Heaney, 24, has become the first baseball player to enter into a brand contract with Fantex, the company announced on Thursday.
Under the terms of the deal, Heaney will receive $3.34 million in exchange for 10 percent of all future earnings related to his brand, including player contracts, corporate endorsements and appearance fees.
The agreement is contingent on Fantex obtaining the financing necessary to pay the purchase price. The shares are not yet up for sale, and Heaney, his agents and Fantex officials cannot yet comment.
Both Major League Baseball and the players union consented to Heaney's deal, which could be the first of several involving major leaguers.
MLB was concerned about the possibility of such an agreement leaving Heaney vulnerable to exploitation by gamblers, but Fantex employs a screening process to weed out problematic investors, according to sources.
The union also had reservations, including Heaney's giving up a sizable percentage of his future earnings and risking disclosure on a broad number of issues, including injuries and potential discipline, sources said.
The deal, however, could benefit the union in other ways. Heaney already has received a $2.6 million signing bonus as the No. 9 overall pick in the 2012 draft. Now, with nearly $6 million in earnings, he likely will be less inclined to sign a below-market extension.
Heaney, whom the Angels acquired from the Dodgers last offseason for second baseman Howie Kendrick, is earning $509,250 this season. He has a 3.52 ERA in 14 starts, but likely will not be eligible for salary arbitration until 2018 and free agency until 2021.
Fantex also has approached other major leaguers, but at least one was uncomfortable with the idea that a fan could "own" a part of him, sources said.
A number of NFL players have signed with Fantex, including San Francisco 49ers tight end Vernon Davis, Chicago Bears wide receiver Alshon Jeffery and Buffalo Bills quarterback EJ Manuel.
Davis received $4 million from Fantex. His shares sold for $4.2 million, with the difference going to cover the cost of the deal. As described by The New York Times, the shares simulated a 10 percent interest in Davis' future income. For investors to make money, the total value of Davis' future earnings must exceed $42 million.
Heaney's deal presumably will work the same way — his earnings would need to exceed $33.4 million for his investors to realize a return. If Heaney is successful, he can cover a sizable percentage of that amount in arbitration alone and earn additional income in endorsements.