By J.W.
The Pullman Group will likely complete its first professional athlete contract securitization by fourth quarter of this year, according to company president David Pullman.
He said he is currently talking to several players, and that he would be discussing the subject with more, but that "it takes a contract of around $100 million to make the deal worth it ... That doesn't leave us with a huge pool of players."
Pullman said because of the varying degrees of flexibility in contract regulations, it will be easier to do the deals in some sports over others. In order of likelihood, he said, the order is basketball, baseball, then football.
Last year saw Frank Thomas try to securitize his contract in a $20 million private offering via SPP Hambro, but the deal had a bumpy ride and was benched --- among other things, investors had questions about what happened if the star got hurt. While the deal was mentioned in a ratings agency report as being completed, closing of the deal has not yet been able to be independently confirmed.
Pullman said players stand to benefit primarily because the transaction is a non-taxable events.
"They get to invest all the money today and pay taxes later."
He said that his company has recently shifted its focus from looking at ways to securitize existing contracts to "getting involved in the early stages." Working on pre-negotiated contracts, he said, is likely to be too complicated due to the many clauses they contain.
ASSET SALES REPORT January 25, 1999