SAN FRANCISCO – A season-ending injury to Houston Texan running back Arian Foster has also sidelined an IPO proposing to sell a stake in the football star’s future.
Tuesday’s postponement of the initial public offering comes less than month after San Francisco startup Fantex Inc. announced an unusual deal that would have allowed people to invest in Foster, one of the top running backs in the National Football League.
Fantex warned prospective investors that the IPO posed significant risks, a point that it didn’t take long for the violent sport of football to vividly illustrate.
Foster, 27, suffered a hamstring injury in his first game after Fantex began promoting the IPO. When he returned to the field for the Texans next game on Nov. 3, Foster hurt his back so badly that it will require season-ending surgery to repair. Although back pain had caused Foster to miss much of the Texans’ training camp, he had been among the NFL’s leading rushers until the latest injury.
Fantex is still hoping Foster will have a fruitful football career, enabling the company to resurrect the IPO in the future.
“We continue to support Arian and his brand, and we wish him well in his recovery, said Fantex CEO Buck French.
Fantex had struck a deal to pay Foster $10 million in for 20 per cent of his future income tied to his football career, including a possible foray into broadcasting. To pay Foster, Fantex had planned to sell 1 million shares for $10 apiece.
It was a risky arrangement, given the relatively short careers of professional football players. Foster is in the second year of a five-year contract that could pay him up to $23.5 million, including $5.25 million this season. That means he would probably have to sign another big contract or line up a lucrative football-related career after he retires for Fantex make money off its $10 million payment to him.
Fantex also is planning to pursue similar IPOs with other athletes and celebrities.
Just two weeks ago, Fantex agreed to pay $4 million to another football player, San Francisco 49ers’ tight end Vernon Davis, in return for 10 per cent of his future income. Davis left the 49ers’ game Sunday with a concussion after a jarring tackle. It’s uncertain whether Davis will be able to play in the 49ers’ game this Sunday against the New Orleans Saints.