The Padres Owe Fernando Tatís Jr. $340 Million. He Owes an Investment Fund Millions From His Payday.
Tatís signed a contract with Big League Advance, an unusual investment fund that pays minor-league players money up front in exchange for a share of their future MLB earnings.
The Big League Advance payouts aren’t loans. If the player never reaches the majors, he doesn’t have to reimburse the money, and Big League Advance loses its stake. When a player turns into a MLB star like Tatís, Big League Advance receives a huge payout. In effect, Tatís is now funding a bunch of minor-leaguers who will never make it. It’s similar to a venture capital fund that backs lots of startups that fail, in return for a gigantic payday from getting in early on a company like Facebook or Uber.
Venture capital for all the things.