[email protected]
Wed, 15 Jul 1998 23:21:31 EDT
Here is that article I mentioned regarding Frank Thomas, 1st baseman for the
Chicago White Sox.
I typed it out at work, but there were some problems...so I had to go hunting
for it. Big thanks go out to Doll-Pam for transcribing it for me and sending
it to me.
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The barbarians are at the gates of Comiskey Park. If the final details can be
ironed out with SPP Hambro & Co., a New York City investment banking firm,
Frank Thomas, the Chicago White Sox slugger known as the Big Hurt and soon,
perhaps as the Big Board, will no longer be a mere designated hitter but a
living, breathing security.
The deal: Thomas hopes to raise $20 million by offering investors...Frank
Thomas, according to the Investment Dealers' Digest, SPP Hambro would issue
bonds in Thomas's name backed by his Sox contract, which guarantees him an
annual salary of $7 million through 2006. This method of raising cash isn't
unheard of in the entertainment world-the Motown songwriting team of Holland,
Dozier and Holland, for example, recently sold $30 million of securities
backed by its royalties, and David Bowie financed his tour last summer with a
similar plan-but it is virgin territory for an athlete.
Individuals cannot invest in this big-bucks rotisserie offering. The likely
scenario is that an insurance company or a bank will buy all the bonds (in
effect giving Thomas a $20 million loan) and then hope to make a profit from
the interest the bonds pay (probably about 4.5 points above the Treasury rate,
or about 9% as of Monday). Thomas, who owns a record company and Big Hurt
Enterprises, which oversees his charitable organization, has not disclosed
what he plans to do with the money. But he's apparently confident he can earn
more by investing it than he will pay out in interest. The risk for investors
is that Thomas might not receive his guaranteed salary, either because of
labor unrest or because of a violation of the morals clause in his contract.
It's a good thing nothing about this deal is tied to Thomas's onfield
performance: At week's end the 6'5", 270 pound security was trundling along
with a .275 batting average and only 14 homers.
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I just found the article, especially the two connections to the music-
industry, interesting...especially considering the latest news surrounding U2s
financial situation.
Dan in TheDesert
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