Felix Salmon is a chump
Felix Salmon is a condescending, racist, self-important, race-baiter. That is not a thesis. This is a fact. See for yourself in his recent article for Reuters.
Let me tell you why below.
My day started off by searching the interwebs, looking for credible sources to give me a better understanding of the Arian Foster situation. My purpose was to get some background as I looked to comprise a list of 10 baseball players you would want to invest in (that article will follow in the coming days). But as I read an excellent article by Tim Fernholz, I was bounced to a link that brought me to Mr. Salmon.
Salmon’s credentials are irrefutable. He’s worked under Nouriel Roubini—a renowned economist who predicted the housing collapse—and in 2010, Salmon received the Excellence in Statistical Reporting Award from the American Statistical Association. In short, the guy knows what he is talking about economically. But it’s his social view of Fantex’s approach to this venture that is new to major American sports is asinine.
I read through the first half of Salmon’s article where he does an solid job of breaking down the origins of this idea, how Fantex is structured, what Foster needs to accomplish and the dangers of us “chumps”—as he likes to call us—investing in this venture. Calling the average Joe that enjoys the commodity of “owning” a piece of Foster’s potential earnings is condescending. Call me crazy, but I would guess that one of these “chump investors” aren’t looking to get rich. Rather, it’s the same feel as a collector buying Foster’s game worn jersey, cleats and gloves.
But as a fellow pundit, I can respect the use of inflammatory language for the sake of drawing clicks. It’s towards the end where useful advice and talk radio-esque tactics turn to straight racist overtones. As Salmon spews through his keystrokes, “Foster is going to receive a $10 million check from Fantex; if he’s typical of most 27-year-old star football players, he’s likely to spend most if not all of that money pretty quickly.”
There are two separate things to pull from that embarrassment of a sentence.
First, Salmon clearly assumes all athletes are morons and don’t know how to invest. If Salmon decided to do a simple Google search of “Arian Foster contract” and if he could be bothered to click past the second link—since he isn’t a chump as he so eloquently implied previously—he would see that Foster isn’t your run-of-the-mill jock that is about throwing dollars in the air. In fact, if he clicked that article, Salmon would see that he has been about putting food on the table for his family. Foster is even on the record—quite unapologetically—that he would take a violation of the NCAA’s rules to put food on his table. The mere fact that Foster recognizes that this lump sum will provide for his family for the rest of their lives clearly implies that he isn’t going to blow it.
Now the second part, and I’m borrowing Salmon’s own formula, is the racial overtones. Salmon concludes that “the racial overtones are unavoidable: Fantex’s About page features four grinning middle-aged white men, while the man they’re taking 20 percent of is young and black. This isn’t slavery; this isn’t ownership.” How is that not race-baiting? How is the fact that there are four white guys that own the company racist? By signing Foster to this contract, those “white guys” are saying, “Mr. Foster, we believe in your abilities in talents beyond the football field. We are offering you a lump sum that will buy us a stake in your potential empire.”
Here’s a real life example from my life as a chump: My friend Stringa is an excellent poker player. I am not. I’d rather spend my money on a known quantity (e.g., food, drinks, clothes) than stacking the odds against me against people that know how to win at the tables. So when I travel to Atlantic City I buy into Stringa’s performance. It’s a risk, but it’s a win-win. Generally, I invest 20%, much like Fantex. Stringa plops down the other 80 percent. When Stringa sits down with that $100, which I have a $20 stake in, all is up to him. I don’t own him. I’m putting a steak in his future and when I feel good I cash out. I get the thrill of gambling, the free drinks by standing next to the table and a better calculated chance of recouping my money and then some. Fantex has done the same.
Salmon, if you remember, already assumes Foster is some stupid punk jock—much like the guys that probably shoved him in his locker at secondary school—will blow through his money. But wait, allow him to jump on his soapbox once again, “…the rich white businessmen are buying something for their $10 million, while Foster is legally binding himself to writing substantial checks to those businessmen, and/or their successors, every three months, for what is quite likely to be the rest of his life.”
A contract that, and allow me to take an enormous leap, Foster’s advisors and agent looked over before he signed it. Also, those “substantial checks” will only be such if Foster continues to generate revenue. If Foster spends his money as Salmon assumes then he will have nothing. I’m no economist, but 20 percent of zero is (let me get out my calculator), zero.
Don’t worry, Salmon isn’t done:
“…do you really want to buy shares in a company which treats young black men as property to be acquired..”
Seriously? What does him being black have anything to do with this? If this is Mike Trout, Andrew Luck or Johnny Manziel, does it stick in his crawl? What if this was baseball that has a heavy Latino influence? What if Foster’s wife, mother or father want to invest in their loved one to keep the wealth in the family? Are they racist too?
America has issues. Sure. We have so many problems I couldn’t even look up data on the 2010 Census—data that shows we are moving toward getting rid of those old white guys he despises so much and seeing more people that have interracial blood, like myself.
What I’m trying to say is maybe this investment doesn’t make sense for you financially. Maybe you want to feel like the Green Bay Packers owners for the fun of it. Maybe 10 years from now Fantex will be the juggernaut that started a trend in America. And maybe instead of seeing People Magazine pay some hybrid of Suri Cruise and Pax Jolie-Pitt’s lovechild $10 million for pictures, we will see more major conglomerates partner with us chumps to invest in the Cruise-Jolie-Pitt lovechild’s future.
Whatever the case is, Mr. Salmon I trust you to give me advice from the peak of Mt. Olympus about my portfolio and how to diversify it. But shut up when it comes to giving us your opinion on social issues and how young athletes behave. You can’t be a champion for their bank account then say they’re going to burn down said bank account because they’re dumb. It just makes you look like a chump.