Hochman: Cardinals fans can literally invest in young players — and possibly profit

These days, fans can invest in baseball in so many ways, from card collecting to gambling to buying shares of classic sports memorabilia. But I’d never heard of anything quite like this.

Cardinals fans can invest in an actual Cardinals prospect.

Fans can now buy $2 shares in minor league catcher Leonardo Bernal — and if he ever makes the major leagues, the fans could get a return on the investment by receiving a percentage of Bernal’s earnings.

The company Finlete partners with ballplayers who desire upfront capital. So far, the company has teamed with Miami Marlins prospect Echedry Vargas and Cleveland Guardians star reliever Emmanuel Clase. And now, they’re working with Bernal, the 20-year-old St. Louis prospect who hit .270 in Class A Peoria with a .762 on-base plus slugging percentage (OPS) before a season-ending promotion to Class AA Springfield (Missouri).

“We often liken it to just investing in different types of companies, depending on what stage they’re at,” said Max Eisenberg, a Washington University graduate and co-founder of Finlete. “You’re investing in a super-young company with a lot more risk but a lot more upside. ... You’re not going to get a crazy multiple on Walmart, whereas you get a crazy multiple if you invested in Uber in the early days, right?”

I am not writing this column to endorse the investment. I’m just really fascinated by this — it’s something new to the sports world, an innovative investment. It’s a gamble, perhaps like buying a lottery ticket. And it makes me wonder: Could this be the future of fandom? You’re not just following a guy’s career — you’re literally investing in it.

So how did this all start? Finlete co-founder Rob Connolly recalled reading a 2021 article — The Wall Street Journal had reported that Fernando Tatis Jr. — who had just signed a $340 million contract with the Padres — had to pay $27.2 million to an investment fund company.

“We were like: How’s that even possible? How does it even work?” Connolly said. “And we did tons of research. It’s all I would do — when I get an idea, I can’t stop thinking about it. ... So I flew to the Dominican, met with a bunch of camps, baseball agents, prospects, and I found out that all these players have these types of deals (with investment fund companies) to be able to support their families and give them the best chance to make it. They need these deals. It’s not a want — it’s an absolute need.

“So we went back and we thought: How can we put together a platform that will be better for the athletes and give normal fans the ability to participate and have a seat at the table?”

With Bernal, Finlete requires a minimum of 150 shares purchased ($300). Each share is worth 0.000009% of Bernal’s big league earnings.

“On the fan side, what has really driven us that’s so exciting is kind of the democratization of an asset class,” Eisenberg said. “And we’ve been really passionate about that since Day 1. You know, for instance, if you look back at websites that came online and gave anybody the ability to invest in startups — I remember when that was all occurring and found that extremely cool and empowering.

“And so when we uncovered this asset class that people knew so little about, it was fascinating, No. 1, to learn that athletes are doing these deals. And then No. 2, the prospect of opening it up to fans and everyday investors. And giving everybody a shot at participating. People look at athlete contracts and team ownership and all of these things with stars in their eyes, right? And it’s a very exclusive world. So to give fans, kind of, the ability to get a little bit deeper into sports? It’s really special.”

As for Bernal, he’s the No. 9 prospect in the Cardinals system, per MLB.com. If he starts the year in Class AA, one would think he’s projected to make the majors in 2026. Of course, it’s not easy to make the majors.

On Finlete’s site, there is a simulator. If you bought the minimum $300 in Bernal shares and he has a career similar to one-time All-Star catcher Elias Diaz (who has made around $17 million in his career), “a $300 investment would generate simulated results of $525 or a 1.75x multiple on invested capital,” per Finlete.com. And if Bernal were to make $163 million like Yadier Molina — “a $300 investment would generate simulated results of $5,836 or a 19.45x multiple on invested capital.”

“So the more you buy, the more the more you’ll get,” Eisenberg said. “And it’s for the whole duration of his career. So it’s kind of cool. The fans are really entrenched with the athlete for the long haul. ... And it’s cool how we’re tying fans to athletes in a deeper way.”