When people ask Randy Newsom (LA '04) what he does for a living, they are often impressed to learn that he's a professional baseball player in the Cleveland Indians' farm system. But when he talks to those from within the Tufts community, the sentiment is often quite different.
"People are like, 'You're 25 - what have you accomplished?'" he said.
That may be about to change. Not only is Newsom steadily ascending in his baseball career toward the major leagues, but his recent business venture has captured national media attention. While the former Jumbo pitcher works out on the Hill in preparation for the upcoming season, he has another career on his mind as well.
Real Sports Investments (RSI), the brainchild of Newsom and two partners, was developed during the last quarter of 2007 and launched in January. The company is built around the unique idea of allowing fans to buy shares of individual minor league players, with the hope that they'll one day be able to cash in on .002 percent of the millions in salary that the player could make in the major leagues.
Under the rules, a player could sell up to five percent of his future major league salary. From the player's perspective, the incentive is the chance to augment his minor league salary with some extra cash.
"For some players, it's an insurance [policy]," Newsom said. "It's kind of spreading out the risk, and as a baseball player, you never know what the future holds. I think a lot of people have a misconception about how much minor leaguers make. It's a winner-take-all sport, so only the top guys get paid. Everybody else kind of struggles along, and then you either make it or you don't."
During the month of January, Newsom sold a total of 1,800 shares at $20 apiece, netting himself a $36,000 bonus. The company was temporarily shut down earlier this month after concerns from Major League Baseball and the players' union arose over whether the company violated any of the rules within the collective bargaining agreement or those set by the Securities and Exchange Commission (SEC). Newsom says he didn't hear directly from the SEC until very recently, but he refunded all of the shareholders and has plans to sit down with these groups to hammer out an agreement.
"We've just started talking to the SEC about possible ways we fit in, and it's kind of like a square peg in a round hole," he said. "We don't really fit into anything under their exemptions, and we don't really fit into anything under their jurisdiction, so nobody's really sure. As for the MLB, we've been in contact, and our CEO's going to sit down with them soon, so we have a good relationship."
The motivation for RSI came as a reaction to what Newsom perceived as an opportunity to align the interests of both fans and players.
"I thought, well, a lot of fans will love the chance to follow guys and help them out," he said. "And players would the love the chance to be financially stable. So why not bring them together, and that's where we came in."
Jon Searles, a pitcher in the San Diego Padres farm system with an economics degree from the University of Pennsylvania, shared with the New York Times his reservations about the business from an economic side.
"Don't get me wrong - $50,000 can be everything to a player in the minor leagues," Searles said in the Feb. 1, 2008 article. "But the risk of them committing five percent in perpetuity for a quick $50,000, there's a break-even point where only players who aren't characterized as prospects might do it. And rational investors will assess those percentages."
Newsom acknowledged that this may be true, but he added that each player would make that decision in the context of his own situation.
"With 99.9 percent of minor leaguers, you just don't know how it's going to shake out," Newsom said. "We've talked to a bunch of [first-round draft picks]. It's up to each individual player whether it's worth it. What people do with money and how they handle it, I don't think people completely know.
"And that's the thing: would a first-rounder take $50,000? I don't know, maybe. But what we're saying is that for every player it's going to be a different situation. We're going to take things on an individual case-by-case basis. It's not going to be like every player does this in the world - we understand that."
One thing that has been particularly encouraging for Newsom is the positive reaction that he's gotten from inside the baseball world.
"The response has been awesome," he said. "I've been humbled by how supportive the baseball community has been to this. I knew it was a good idea in some ways, but I didn't know how players were going to react to it. I've heard from so many of my teammates and my friends, and a lot of guys are interested. We realize that the idea works on both sides."
In addition, the company has had little trouble attracting interest from a wide variety of investors.
"We've got everything from people inside the industry, to people in the entertainment industry, to just the regular everyday fan," Newsom said. "We heard a lot of stories about a dad buying a share for his son, and they were going to wake up every morning and check my stats. And that's what we were looking for, to bring as many people in as possible."
In addition to the Times article, Newsom has received inquiries from ESPN and NBC about appearing on their stations. But despite all of the media attention, Newsom's focus is still primarily on his own baseball career.
"I'm just a baseball player right now," Newsom said. "I don't know what to tell people except that yeah, I'm interested in a lot of different things. But my main focus is helping the Indians and becoming a big leaguer. The idea is what I wanted the focus to be on, not me."
Newsom will turn 26 in May, and while his clock is ticking, he's also closer to playing in the major leagues than he's ever been. He was an Eastern League All-Star last year with the AA Akron Aeros, posting a 3.12 ERA in 49.0 innings pitched, and he aims to start the 2008 season in AAA when camp breaks in late March.
"I wouldn't trade this for anything," he said. "I'm learning a lot and I'm enjoying the heck out of my experience, and it's allowing me opportunities I would have never had. If it doesn't work out - if for some reason, I can't make it - then I [will have to] put my heart and soul into it. But it wouldn't be the end of my world, and there are greater tragedies. Personally I think I've come a long way, and I feel very good about where I'm at as a player."
