Adding Context to the Fantex Public Offering

Part 1 of 3: Legitimate or Emotional Investment?

During the NFL season, millions of fans are emotionally invested in their favorite teams and players. But since Fantex, Inc. filed a preliminary prospectus with the SEC on October 17, the notion of financially investing in professional athletes has generated considerable buzz. After letting the dust settle, a careful reading of the company’s prospectus reveals numerous red-flags regarding this IPO – most notably to potential investors.

At first glance, Fantex’s strategy to raise capital appears pretty straightforward. The company will raise $10 million by selling ten-dollar shares to the general public. Fantex also entered into a “brand contract” with Houston Texan’s running back Arian Foster. Under the terms of this contract, Fantex will make a one-time, $10 million payment to Foster in exchange for 20% of his future earnings. The company expects to enter into similar brand contracts in the future with not only athletes, but also entertainers and other high-profile individuals. If Fantex’s efforts are successful, it will issue dividends to investors. Therefore, the more shares that are purchased, the more dividends investors can expect to receive – right?

As with most IPOs, nothing is ever quite so clear. The details in the prospectus reveal that Fantex lacks any clear business model. More importantly, there is no clear plan for generating a return for investors. Based on the prospectus, it is safe to conclude that any reasonable investor would not purchase shares under this IPO. However, this offering is perfect for those investors who do not actually intend to make any profit.

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Truth in Sentencing, Early Release Options Both Have Appeal, O’Hear Says

While truth in sentencing is highly popular with Wisconsin voters, some options that could allow prisoners to be released before serving their full sentences also have majority support, Marquette Law School Professor Michael O’Hear told an “On the Issues with Mike Gousha” audience last week. Wisconsin may want to give renewed attention to such ideas in the pursuit of prison policies that are both morally appealing and fiscally wise.

O’Hear, who is associate dean for research at the Law School, summarized Wisconsin’s trends in incarceration in the last four decades, including increased prison populations, abolition of the parole board, and adoption of “truth in sentencing,” which makes a judge’s sentence close to the final word on how long a prisoner will serve. Changes that eased the truth in sentencing practices, including creation in 2009 of an Earned Release Commission, were largely reversed under Gov. Scott Walker in recent years.

The number of people in the Wisconsin prisons went from about 2,000 in 1973 to about 23,000 in 2004, O’Hear said. The total has leveled off since then. Strong political momentum to get tough on crime, including not letting prisoners out before they served their full sentences, underlay the trends, and Wisconsin’s boom in prison population was in line with what occurred in much of the nation, O’Hear said.

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Remembering the Assassination of President Kennedy

John_F_KennedyMost of the current affiliates of the Marquette Law School are too young to remember the assassination of President John F. Kennedy on November 22, 1963. But for those of us who do remember it, it is a date indelibly stamped in our memories. As part of the nationwide effort to mark the 50th anniversary of that tragic event, I share my memories of that day, and I encourage others to do the same.

I was in the 6th grade at King Johnston Intermediate School in Pearisburg, Virginia, in November of 1963. Although President Kennedy was extremely popular with my classmates, my family members were not especially big Kennedy fans. My parents had supported Richard Nixon in the 1960 presidential election, and I don’t think that they had ever gotten past the idea that Kennedy had won the election because he was rich, handsome, well-connected to power, and willing to say whatever it took to get elected.

Still, I was shocked when I heard that he had been assassinated. Although I prided myself on my knowledge of current events, I don’t think that I knew that the president was in Dallas that day. I knew that presidents Lincoln, Garfield and McKinley had been assassinated in the past, but I doubt that I ever had entertained the idea that a president in my own time could meet such a fate.

At the King Johnston School, we had all of our classes except band with the same teacher in the same classroom. My Class, 6-A, met in a room on the second floor near the staircase, and my teacher’s name was Mrs. Mary Dillon. It must have been around 2 p.m. or possibly as late as 2:30 on Friday afternoon, when Mrs. Lilly, Principal Cruise’s secretary, came to the door and motioned for Mrs. Dillon to leave the room. I can still clearly remember Mrs. Dillon reentering the room and telling the class that she didn’t want anyone to get too upset, but the president had been shot. She told us that she did not know if he was still alive or not. I remember that we were all stunned, and I think that she told us just to put our heads down on our desk and rest until it was time to go home. It was already late in the day and the school buses were probably already on the way.

I don’t remember receiving any more information about the assassination, but I do remember thinking that the principal Mr. Cruise would say something over the loudspeaker, but he did not. Before too long, we were discharged from class at the regular time, shortly after 3 p.m. I walked home as I always did, but I remember hearing over and over from people leaving the school that the president was dead. When I got home, I started to tell my grandmother, who lived with us, that I thought that the president had been killed, but she had already heard the sad news.

Everything else surrounding those events is something of a blur. I know that we watched the coverage on television that evening and the next day, but I don’t remember much else. I do remember going to church on Sunday morning, two days later, but I cannot remember if the Rev. Hankins preached about the assassination, although I am sure that he must have. I do remember going over to my friend Charlie Edwards’ house after Sunday dinner to watch the Redskins game. I remember being vaguely surprised that it was not on television, but being eleven year olds, we decided to go outside and play touch football. (As it turns out, the NFL made the controversial decision to go ahead with its games—the AFL cancelled theirs—and the Redskins actually scored a rare victory over the Eagles.)

During our game another friend showed up and told us that Oswald had been shot. By that point, everyone in the country probably knew the name Lee Harvey Oswald. While we were accustomed to seeing dozens of people shot on television every week in that era of the western and the detective show, it seemed surreal that so many famous people were getting shot in real life. As I recall, we accepted the news and continued playing touch football for another hour or two.

Other than what I have just recounted, I remember very little about the events of the next few days. I know that we didn’t go to school on Monday, but as far as I can remember, after that, sixth-grade life picked up where it had left off. I remember going out for youth basketball and getting picked for one of the four teams (for the first time) in early December. The next public event that I remember with clarity was the Bears beating the Giants, 14-10, in the NFL championship game at the end of December, and then the Beatles showing up on Ed Sullivan the following February.

I do, however, have one other JFK-related recollection. In June of 1963, the Hollywood movie, PT 109, was released to theaters with considerable fanfare. It starred Cliff Robertson as President Kennedy, and it told the story of the president’s heroic actions during World War II. In that era, there were only so many copies of each movie, so new movies usually started out in large cities and then made their way down to less populated placed. It often took four to six months for a popular new movie to make it to a rural village like Pearisburg (pop. 2400).

As luck would have it, PT109 was scheduled to open at the Pearis Theater, the week after the Kennedy assassination. I don’t know how the decision was made, but another movie (a western, but I don’t recall its name) was substituted for it. I assume that no one was ready to see a movie about the president so quickly after the assassination. As I recall, PT109 was not shown until sometime the following summer, and I do remember going to see it.

I think almost everyone over the age of 10 who was alive on November 22, 1963, remembers exactly where they were when they heard about the death of President Kennedy. And I assume I always will.

 

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