Last year, when Fernando Tatis Jr. signed his massive contract with the San Diego Padres, a player financing arm called Big League Advantage (BLA) got major publicity. BLA reportedly made $27 million from the Tatis deal by fronting money earlier in his career for a percentage of his future earnings.
The benefits for up-and-coming baseball players are vast. For an upfront payment, players can earn generational wealth in exchange for future earnings. Players do not need to repay BLA should they never make it big.
But when cases like Tatis' — or potentially Elly De La Cruz's — arise, critics are quick to pounce.
BLA is in the news again today because of Reds phenom De La Cruz's red hot start. The company has backed the rookie sensation for years and stands to make a profit off of future salary and endorsement deals. To date, De La Cruz has pocketed just his $65,000 signing bonus, minor league salary and game checks for three games played.
This morning, we spoke to BLA’s president and CEO Michael Schwimmer, a former baseball player who founded the company in 2016.
Darren: Michael, you guys are in news again. This time with Elly. How does it feel?
Michael: To be honest, with the excitement comes more misunderstanding as to what we do. We always hear that we are taking advantage of players. There could be nothing further from the truth. We give players money, they decide how much they want to give back to us. If they make it, we do well. If they don’t, it’s not a loan, so they don’t have to give it back to us. This business has a very long tail.
Darren: So that’s a key distinction most people seem to miss. I think they also hear of you only when you have seemingly won on a big prospect.
Michael: Definitely. We’ve raised $244 million to invest in players, but haven’t even gotten back $50 million. And when HBO did a story on us, everyone was talking about Yerman Mercedes. He was out of baseball in three years. Elly has played three games.
Darren: You guys do get a lot of criticism for this business. What is the biggest misunderstanding?
Michael: When someone becomes successful, it’s always is we’re taking advantage. Are the people who invested in Tesla taking advantage of Elon Musk? No. You back him. And in exchange, you get a share or earnings if he wins.
Darren: Can you say the percentage you own of Elly’s future earnings?
Michael: We can’t. I can tell you that when he signed with us, his odds of being a major league player for fewer than three years was 87%. When we got Fernando Tatis Jr., he was traded for James Fields. But we do much more. We donate to every player’s charities and, if they don’t make it, we activate our investors, who have a combined net worth of over $100 billion, to help them find jobs.
Darren: I know you guys have analysts scouting. How often does the prospect come to you?
Michael: Most of them come to us actually.
Darren: How many players do you have now?
Michael: In baseball alone, it’s 530. And we have so much fun, whether it’s what Elly is doing at the Major League level or a guy who is playing ball in Cedar Rapids.
