Playing the Jock Market

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Gregory Shamus / Getty

Basketball star LeBron James of the Cleveland Cavaliers.

Is Morgan Stanley's stock, down 63% over the last year, giving you anxiety attacks? Does GM, which has lost 75% over the last year, make you want to drive a car off a cliff? Well, you could always, as so many investors do, try to forget your sorrows by pouring your passion into your favorite football or baseball teams. Or, you could buy some shares of LeBron James (ticker symbol: KING), who was up almost 400% on October 2. Or grab PMAN (no, not that's shorthand for notorious footballer Pac-Man Jones) the ticker symbol for Peyton Manning, up nearly 300% on the day.

Investors have always loved to use sports metaphors, but now they can combine the two national past times even further. In the midst of a historically awful week in the stock market,, a new website that allows users to trade virtual shares of sports stars, made its debut. Sites like the Hollywood Stock Exchange have offered a similar market for actors and movies, and now the concept is trying to take root in the sports world. And while your cash isn't actually funding King James — don't expect a dividend check from his highness — the profits or losses are very real. "You've got a little skin in the game," says Michael Sroka, a 27-year-old ex-former hedge fund manager who is OneSeason's founder and CEO.

OneSeason doesn't take long to learn how to play. A trader can deposit up to $2,500 into an account over a 12-month period, and then electronically buy and sell "synthetic ownership interests," a convoluted name for fake shares, of current baseball, basketball, football, and hockey players. Like any self-respecting stock site, the home page details the day's biggest winners and losers, as well as which traders are red-hot. You can easily access data on each athlete: performance charts, shares outstanding (which start anywhere from 50-250 depending on demand, and can change when the stock splits, which happens if it hits $20), market cap, and watch your portfolio fluctuate as if it were on Fidelity or E-trade.

Every day, OneSeason rolls out IPOs of new players, which now includes everyone from Kobe Bryant to Denver Broncos quarterback Jay Cutler. (Saturday hockey star Sidney Crosby debuts!) Each IPO is priced at $5 per share, and after that, the share price is determined by basic supply and demand. Fantasy sports enthusiasts, who are used to obsessing over player stats, may be surprised to find that prices aren't tied to specific performance criteria — touchdowns, home runs, rebounds. So if Peyton Manning throws five touchdown passes on Sunday, his price won't automatically shoot up. But if you own him at, say, $15, and a buyer (or some would say, sucker) wants to give you $20 for it, you profit.

Therein lies the potential problem with the OneSeason concept. The market is totally dependent on the fluctuating passions of a group of people willing to play a game. An invisible share of Peyton Manning has no underlying value. "This is the ultimate 'beauty contest' market," says Raymond Sauer, a sports economist at Clemson University. "If there are no fundamentals backing it up, something like relative productivity among a pool of athletes, the market will ultimately collapse. It just seems like a very odd game to play, and to set up in the first place."

Stroka, the OneSeason CEO, and his investors, which have given the young entrepreneur some $2 million to start the company, are betting that, in the Internet age, people feel comfortable with virtual property. He points to Second Life, the wildly popular simulation game where you can speculate in digital real estate with real money. He also mentions Facebook, where you can spend a buck on electronic flowers for your girlfriend. But in these examples, at least you can see that pretty house or flower on your screen. For a $15 share of Brett Favre, you see his headshot and statistics, information that is available at, oh, about a million different sites on the web. "It sounds incredibly hokey," says Marc Ganis, president of SportsCorp Ltd., a consulting firm. "There's nothing of intrinsic value involved in it. Not even a collectible card. Not even Pokémon."

Despite these shaky fundamentals, OneSeason's early returns are strong. By the end of its second day of existence, the site attracted about 2,000 accounts. The market value of all shares has already passed $300,000. And if the site remains successful, sports marketers might want to pay attention. The price paid for an athlete's synthetic share could be a pretty sharp measure of fan perception. With an estimated 30 million people now participating in the $800 million fantasy sports industry, sports stock just might fly. After all, in our sports addicted society, one should never underestimate the desire of fans to find a new competitive arena to play in. "There are bragging rights involved," says Mike Meyer, a law school student from Cleveland who has already invested $1,000 in the OneSeason market, and, he quickly adds, has doubled his money (he picked LeBron James, Alex Rodriguez, and Tom Brady for his portfolio, or as it's known in OneSeason jargon, his "sportfolio"). "I was just showing my buddies how my stocks are going up. The big thing is the fun of it, and there's a chance to make some money."

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