Making a name for yourself as a top prospect brings attention. But it does not immediately give you financial security. Emerging players often look for creative ways to fund themselves before the big contracts happen. But Fernando Tatis Jr.’s experience shows that there might be heavy consequences: that it might not be the best idea to bet future earnings on current opportunities. 

The Padres’ right fielder has already paid a price. But now, one of the Yankees’ top prospects is heading down a somewhat similar path. The path might look safe on paper, but Tatis Jr. can tell you otherwise.

Carlos Lagrange is the New York Yankees’ no. 2 prospect, grabbing a lot of attention with his triple-digit fastballs. The right arm has often been termed a flamethrower. Analyst Rob Friedman has even called him disgusting after he was beyond impressed with his three-pitch sequence of “101.8 mph, 83.2 mph Slider (with 20 inches Horizontal Break) and 102.4 mph.”

Back in September last year, Lagrange partnered with Finlete. It’s a startup that allows players to sell their share of future earnings in an attempt to raise money and get paid upfront. 

It is similar to regular stocks, and people have already bought approximately 75,000 shares. With each of them priced at $2.26, Lagrange raised $169,403 from 120 investors. 

And the catch? He had to give up 0.75% of his future MLB earnings, reported the New York Daily News. What eased him into the decision was the $10k signing bonus from the Yankees in 2022. It was a bargain for the club but insignificant for the player’s self-development. His earnings from the investors will see him through all the gym work and nutrition, and he can even support his family. Plus, he doesn’t have to pay a cent if he never makes it to the majors. 

This looks far less risky compared to the case of Fernando Tatis Jr. He signed a similar deal with Big League Advance (BLA) in 2017. Tatis Jr. took $2 million upfront in exchange for 10% of his future earnings. 

El Niño signed a 14-year, $340 million contract with the San Diego Padres in 2021. That is around $56 million through 2026. This means he is obligated to pay $5.6 million to BLA. Almost three times what he gained. 

Realizing he has bitten more than he can chew, Tatis Jr. has already tried to void the deal via lawsuit. Unfortunately, it didn’t work out as he was ordered to pay back at least $3.74 million in advance. 

What’s worse is that he is still obligated for the 10% of his total earnings, meaning the 27-year-old might have to pay tens of millions more throughout his career. 

Lagrange’s four-pitch mix, combined with a 0.66 ERA, shows promising signs for his future. Although he is projected for Triple-A, a call-up is highly likely this summer. That means, he will be paying his 0.75% to Finlete. Notably, the company also collects 23% of the funds raised as management fees. 

Yet, Lagrange’s deal looks like a smarter and lower-risk gamble given what Tatis Jr. is paying back. Such calculated risks can ease the path to preparing for the majors. But they still carry enough risks. 

Fernando Tatis Jr. isn’t the only warning sign against gambling on future earnings

Finlete previously had a flagship client in Guardians closer Emmanuel Clase. He received an amount of $237k upfront from the company. The actual amount was supposed to be $3.6 million. Unfortunately, he only managed to raise $315,000 from 282 investors. And since the projected amount was never reached, Finlete reduced his payback percentage from 3% to approximately 0.3%. 

However, Clase was federally indicted in November last year. He faces multiple charges, such as wire fraud, bribery, gambling, and pitch-rigging. His MLB career might be all but over after he was sent to unpaid, non-disciplinary leave. 

Finlete, on the other hand, is not able to extract any payment because he is not earning his MLB salary. They have already notified the investors that if Clase isn’t back in MLB, the investment will be deemed void. 

Writer Gary Phillips has emphasized how Clase’s case makes the deals a huge risk for the investors as well. While you are betting hundreds and thousands on a prospect, nothing might come of it. 

The huge amount of money Fernando Tatis Jr. owes to BLA is cautionary enough for the players. Let Emmanuel Clase be the warning for the gamblers. The risks are only worth it when they pay off. But there are enough examples where they didn’t.