BETTING ON CLUBS OR CAREERS: A COMPREHENSIVE COMPARISON OF RISK-ADJUSTED RETURNS FOR ATHLETE ISAS VS. TEAM STOCKS

This paper examines the comparative financial returns of athlete income-share agreements (ISAs) and publicly traded sports team stocks over a typical athletic career span. Using the England U18 national soccer team from 2015 as the ISA cohort, I simulate investment contracts that grant a 5% share of lifetime earnings at three price tiers ($50k, $100k, $200k per 1%). These are compared against historical price-only returns for fifteen European football clubs from 2015 to 2025. Results reveal that ISA outcomes are extremely skewed: most contracts collapse to full losses (median = 100%), while a handful of breakout stars generate large windfalls (max +692.7%). In contrast, sports team equities display modest but consistent gains (mean +0.67%, median +0.50%) with low dispersion. Across descriptive statistics, mean-difference tests, median/rank tests, and permutation analyses, team stocks significantly outperform ISAs at realistic pricing levels. However, tiered analyses show that selective investment in medium-potential athletes can yield returns comparable to teams, suggesting that ISA performance depends critically on screening and contract design. Extending the comparison to venture capital and angel investing benchmarks highlights the structural similarity of ISAs to high-risk, high-reward asset classes, where most bets fail but rare outliers dominate. Overall, while sports equities currently provide superior and more reliable returns, ISAs remain a promising but immature asset class whose competitiveness will depend on more selective, venture-style approaches to pricing and investment structure.