Fifa should let the public invest in soccer players

The topic I am gonna write in this article it’s something I am trying to build but Fifa regulations don’t let me. I haven’t found a way yet to make it but there is always a way. (Correction-> If people want it, there is always a way) Here it is www.stadiox.com [Edit: We found a way after posting this]

Imagine from one side you have a lot of fans excited to invest in soccer players and on the other side you have clubs and players needing resources to reach their development. A product that lets fans invest in players should exist but FIFA regulations prohibit people from participating in the individual player's future.

Fifa regulation has always been made in order to protect the sport but the world has changed and some regulations should adapt to approach new trends. Organizations shouldn’t stop a trend where the results benefit all of their ecosystem. If the results are aligned to the benefit of all the parties, organizations should adapt their regulations to encourage these changes.

Let’s start by illustrating how investing in soccer players would look,and how it brings benefits to the ecosystem of clubs, fans and players.

For starters, a soccer club (That we can call Taurus Club) could identify a group of 5-10 young players with potential. The club would then make a plan to see for how long, how much and in what areas to invest so they can maximize the development of these young players. The club tells the public how much they need and the public forms a fund together. In exchange for the funds, the club could give a % of the rights of the players. If one day, one of these players becomes a star and is acquired by another team, the fund would get a % of that transaction. To give you more context, it is normal that a team owns 80-100% of the rights of their players. The final detail in this agreement is that the fund only owns monetary rights of the transaction, the fund doesn’t interfere with the players decision of where to play. 

An example would look like this, Taurus Club finds 8 young promising players and launches an offering of 500K USD to invest for the next 3 years in the development of these players in exchange for a 60% of the rights.

Now let’s see how this exercise would benefit : clubs, fans and players.

It’s well known in the soccer world that almost all clubs are always in need of more money and that their best source of income are the sales of talented players. Public investing would benefit the club with their financials in two big ways : a better source of financing and appreciation of their assets.

The better source of financing is that the club can get money from the public without any debt or interest. The return of the payment to the fund is attached if the players succeed. So the club gets resources to invest in their biggest asymmetrical bet (their players) with no downside. Each new player's success would bring money to the team because they would still have a % of their monetary rights and with these new available resources they could bet on a lot of new potential players.If the number of bets continue to go up the probability of hitting more stars and making more money just go up.

The club also gets another benefit. If people are investing in the players of the club, these same people will feel like owners and are gonna have an incentive to be more involved. Merch sales and ticket sales will go up. It could become very common to hear somebody saying ‘ Look at the player from my t-shirt, I invested in them’. 

The club gets the money, money that was crowdfunded by soccer fans. All these fans also get benefits. This crowdfunding gives the fan a new alternative asset to invest in. You are letting fans invest in something they love. It’s a risky bet but a risky one that could pay big for them. By using the example of Taurus club, if any of the players develops and sells for 10M. The fans would get a 12x return ( 60% of 10M , it’s 6M) and because it is crowdfunded, the fans would invest with values they feel comfortable with like $100. So it's basically an accessible investment  with a probability of good returns. 

But besides monetary returns, the emotional investment fans have with their sports is huge. Why buy a sports card of a player when I can invest and help them become a star? And how many of these investors would have loved to become a soccer player but couldn’t achieve their dream? Now they can help a new young player achieve theirs? The emotional connection is deep. 

Clubs can even bring more benefits to the fan if they offer  special perks depending how much someone invested. Above a certain bracket, you could get limited edition benefits like signed shirts or annual dinners with the players and club. This extra super fan can feel the value of their investment through l this special membership, even if the players don't succeed.

Finally, public investment favors a lot of players. These players get a lot of new resources directed to the development of their abilities. Soccer will have a lot of new bets and a lot of new research and development in this area. Imagine training them in high performance gyms that they couldn’t afford before, giving them a better diet and house to live in and even being able to get them tutors or experiences that will help them strengthen their mental side. Their investment in development also gets so much better and planned with a long term vision as the resources are asked for a number of years. You have de-risked these young players, money shouldn't be more a thing to worry in their minds.When they wake up, they will just focus on how to play and how to train.

It’s not just young players (that are being invested in)  who can benefit from this model. A lot of older players that retire and struggle to know what to invest in after their career is over have an opportunity to be instrumental. They know their sport really well and can translate that into wise investments into talent.. They will be able to invest in the next generation and be able to pay it forward. By investing in them, these old players will be incentivized to help the new ones by coaching them or just supporting them. Players will become better players with this aligned incentives.

There are doubts that won’t be clear until this process advances but it should still be tested. The benefits clearly outstrip the risks. If you let the market invest more resources in players, you will get more developed players. These developed players will become better players overall from past generations (Investment in tech and development reach us to new heights as history can tell us). These better players will make soccer better, which will directly benefit clubs and fans. If soccer becomes more awesome to watch, the market will just become bigger. If the market becomes bigger more money would be incentivized to invest in more young players. This is the perfect example of something that doesn't take out a piece of the pie but makes the pie bigger. Fifa should let people build this and embrace it.

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