INNOVATIONS IN JERSEY FINANCE

by Rupert, Ghosts of Wayne Fontes

At this point, it has happened to all of us. Perhaps we take pride in donning our loyalties to our favorite team, maybe a certain player wins us over, or else we just prefer to avoid getting our teeth kicked in (i.e., soccer)? The result: we swipe the plastic and buy a jersey.

While watching our teams, it's always more fun to represent the jersey to ensure a random assortment of high-fives from drunken strangers. The problem is that in recent years, player loyalities lie with Senor Greenback, oft leaving the fans with a nothing but another accessory for the Halloween costume box when their hero leaves changes teams. Free agency, trades, and short-term contracts have made purchasing a jersey both a gamble and a homework assignment.

It's no longer safe to simply purchase the jersey of your favorite player, instead it requires a careful examination of their contract, the internet for trade rumors, and even the team's cap situation in some cases. Well, fear not, for I have a few innovations in jersey finance to help ease the pain. Move over Wall Street.

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The first finanical innovation for jersey buyers is actually a rip off of a serivce I heard about in Women's handbags. In our version, the customer pays a monthly fee and in turn receives a jersey of his or her choice, which they may keep as long as they like. It's actually the exact same model as Netflix. The customer just sends the jersey back when they are ready for the next one and they may return as often or as sporadicly as they choose.

I think this method has partiuclar potential for fantasy season. I was just running through my horses from two seasons ago and thinking how great it would be to sport a Colston one week and a Larry Fitzgerald the next. I would cycle through my big performers each week. Maybe for an added bonus, this company would even throw in a once-a-year full motocross suit. Although, I'm not entirely sure that would be cost effective.

Jersey Derviatives

Before we get started on this one, we need to provide quick definitions of a financial derivative and the two main types I'm going to mention, call options and put options. If any of you business school kids want to turn this in for homework, go ahead.

Derivative: a contract between two or more parties whose value is dependent upon or derived from one or more underlying assets.

Call option: An option contract giving the owner the right (but not the obligation) to buy a specified amount of an asset at a specified price within a specified time.

Put Option: An option contract giving the owner the sell (but not the obligation) to buy a specified amount of an asset at a specified price within a specified time.

Still with me? Good. Consider the countless thousands of fans who have purhsaed a Kobe jersey throughout his years with the Lakers. Well, anyone who follows the NBA has certainly heard the endless talk as of late that Kobe Bryant has requested (and retracted) to be traded on nine hundred separate occasions. There are no guarantees in this day and age.

Thus, owners of a Kobe jersey could purchase one of these jersey put options, giving them the "option" to sell the jersey at a specified price anytime between now and the expiration of the option contract. Thus, they would be immune to the Just Call Me Juice jersey terrible jersey hall of fame, because the jersey owners could simply excercise the option and sell the jersey if and when Kobe leaves L.A.

Alternatively, say somebody is interested in buying say a Rafer Alston shirt, but they are a lousy fair-weather fan and only want it if the Rocketswin the NBA Chapionship. Odds are, this person could just wait until the series plays out, but perhaps they are concerned that the price could go up or stores could run out of their supply. So, buy the call option and rest easy. This time the option holder has the "option" to purchase the jersey should the Cavs win the title.

One last point on the jersey derivatives is that by forming a marketplace like this the coaches, experts, and fans could potenitally access a tremendous new source of information. The changing values of these option contracts could provide a unique metric for predicting the liklihood of a trade and the overall volatility of the league in general in the form of an overall Jersey Derivative Index (i.e., the JBX index). For example, assume the price of a Kobe put option goes from $1 to $4 in an afteroon - you can bank on the fact that he's leaving town.

Jersey Insurance

Finally, this tool of jersey finance is obvious. It is just like buying insurance on your cell phone. For a couple dollars per month, insurance companies will insure your cell phone in the event that it breaks, gets lost, or falls in the can. Similarly, for as long as a jersey owner prefers to pay the small fee each month, the insurance company will provide a new jersey should your player skip town get suspended for the season. Ron Artest fans would sleep well at night knowing that for a few dollars per month, they are privy to another player's jersey should Ron-Ron decide to climb in the stands and beat the snot out of a fan or unexpectedly go on hiatus to promote an R&B Group.

Perhaps in good time we will have access to some of these random alternatives to spending $200 on a jersey that will ultimately end up serving as a diaper for some kid's road apple. In the meantime, come draft day, dive into those Matt Ryan jerseys with confidence. Surely, at least those should safe for years to come.