An interesting market opportunity

This has been making the rounds of the econ blog sites, but in case you haven't seen it:

Randy Newsom, a Cleveland Indian relief pitching prospect, is selling himself. Well sort of.

RSI is currently offering 4% of his future major league salary at
the price of $50,000. RSI is selling shares of Randy Newsom for
$20/Share through 2/1/08. 2,500 total shares will be sold.
[...]
1 Share will lay claim to 0.0016% of Randy's future major league
earnings.

Thus, if the guy earns $1 million in MLB, a shareholder would collect $16.

I'm intrigued -- both by the baseball aspect and the "markets in everything" aspect. If the guy just makes a major league roster for three years, this would almost be a winning bet (the MLB minimum salary over the next couple of years is $400,000).

I mostly agree with the standard econ interpretation of this as a form of wage insurance for athletes, but I'm thinking of a twist that I might put on it to use in class. Why just offer 4% of your future salary? Why not offer up 50% or more of your earnings? I'm hoping my students would realize that doing so would greatly reduce a player's incentive to work hard and do his best (because he would only be getting half his "worth"). I can then segue from that into a discussion of the disincentive effect of income taxation in general! The only thing is, the disincentive effect of income taxation is not really one of my soapbox issues. Still, I think it might be interesting. Hmm, something to think about.

In the meantime I need to do some research into the question of whether Mr. Newsom is a legitimate MLB prospect.