He dribbles down the court, fakes a pass left and drives through the lane to dunk. The crowd goes wild...but you simply smile while visions of dividends dance in your head.
Are you an agent? A sports franchise owner? An advertising executive? Nope, you're one of the people taking advantage of a hot new investment deal: securitization bonds.
Simply put, securitization bonds are assets, such as small-business loans, mortgages, credit card accounts and, yes, even athletes' contracts, bundled together into a bond and sold to investors, explains David Pullman. The New York financier pioneered this technique in the entertainment industry with rock legend David Bowie in 1997, creating what is now popularly called the Bowie Bond.
"Investors in these bonds [currently only institutional entities such as insurance companies] get a higher return than from treasuries, and they're single A-grade bonds," says Pullman of the bonds he's issued for entertainers such as Bowie and James Brown.
Although you can't yet directly invest in your favorite athlete, Pullman says the opportunity should open up by year-end for institutional investors. And soon after, enterprising entrepreneurs can become more than armchair quarterbacks when they watch their favorite athlete play.