While crawling through the interweb tubes this beautiful MLK Day morning, I ran full force into an intriguing new way to bet on baseball.  Real Sports Investments.com offers you the opportunity to buy shares of young players for a percentage of their future salary.

This is not an entirely new concept, the now defunct WallStreetSports.com (and a number of imitators) offered the fake money version, but failed to monetize their traffic and folded despite wild popularity around 2002.  As a former obsessive WSS trader, I’ve been waiting to pounce on an able successor.   The combination of the excitement of fantasy sports and the elegance of a market system is the heroin to my Lou Reed.

Beyond the real money returns, RSI improves on the system.  They facilitate a more intimate and mutually beneficial relationship between fan and player.   Their mission is “providing security to players and allowing them to achieve their dreams of playing in the major leagues.  Furthermore, RSI wants to enhance the sports enthusiast’s spectating experience.”

For example, they front $50,000 to the player for four percent of his future big league earnings, which is split into shares and sold as a commodity.  This is geared toward fringe prospects, not bonus babies.  Ideally, the payday advance facilitates the players’ quest to reach the bigs.  With a little cushion between his meager salary and poverty, he’ll use better training facilities and feel less pressure to get a second job in the offseason (link).  The fan can watch his investment prospect develop and root with his wallet in mind in addition to the W column.

This becomes problematic if players sell the majority of the their earnings or fans buy up all of a player; both situations have procedural controls in place.  MLBPA may have a problem with players’ salaries becoming compromised if this becomes widespread, but I doubt much will come of this.

I wouldn’t give up 4% of my future total earnings for $50,000, would you?  The only players I see signing up are those with slim to zero chance of making the bigs, and they will attract few investors.   That will leave RSI with piles of unsold shares and debt from payouts to players who are declining.  It’s a risky endeavor.

It’s a very interesting model, but will only be viable if more players jump on board.  Currently the only traded commodity is the founder, Randy Newsom.  I won’t be investing in Mr. Newsom quite yet, but I will be keeping a close eye on RSI.