The TokenStars ICO has been underway for a month now, they've currently sold over 4 million dollars worth of tokens with a month of the crowdsale still remaining.

What is TokenStars?

TokenStars are aiming to 'tokenize' the careers of aspiring celebrities and sportsmen. Their goal is to enter the talent development industry and provide funding to young rising stars to help them develop their career.
They'll be starting with young footballers and tennis players but also hope to progress into further areas, first by adding different sports that can receive funding and then when the business model proves successful they'll move beyond sports to celebrities such as, actors, models and music groups.

How will the platform work?

• They'll initially be 2 different sports specific tokens, ACE for tennis and GOAL for football.

• The ACE token will provide funding to talented young tennis players so that they can receive the best equipment and coaching which will successfully increase their chances of being able to turn professional.

• ACE will also offer promotion and representation to already established pro tennis players and help them attract new sponsorship contracts.

• ACE will decentralize the talent sourcing process. Other talent agencies only have a limited number of scouts, ACE will create a global scouts network and encourage scouts to bring the most talented players on to the platform.

• They'll also decentralize the talent promotion process with the aim of attracting more sponsors on to the platform for the pro players.

How will tokenizing professionals work?

Sports professionals can also be viewed as assets. As they improve their skills and start winning more games they attract more fans which in turn attracts sponsors which increases their value.
Once they gain celebrity status their earnings generally grow disproportionately to how good they actually are at their sport.
After a few years the star can drastically increase their value through their skills and celebrity status.

How can early supporters be rewarded?

After the athletes have become successful they can reward early investors in them by:

• Providing a share of their earned income.

• Offering endorsements for below the market price.

• Offering training time

• Continuing to communicate with fans.

• Signed merchandise, such as tennis balls etc.

• Free or discounted tickets to big events.

How much funding do young tennis stars need?

Before becoming professional tennis players require a lot of funding. From the age of 8-18 its estimated that juniors require around $100,000 per year on average. The costs are broken down as follows:

• 53.9% to cover travel and accommodation to tournaments, they need to attend as many as possible to receive ranking points.
• 21.1% to study full time at a professional tennis academy.
• 9.2% to pay for training with a high level coach and a hitting partner.
• 7.9% to pay for court rental.
• 5.3% to pay for new equipment.
• 2.6% to pay for medical insurance.

Famous players who struggled to the top

• Marit Safin: The famous Russian player was turned down by the IMG agency at the age of 14. He struggled to find funding but eventually a Israeli Businessman, Bruce Rappaport agreed to grant him funding.
  He then went on to become the world number 1 player in ATP rankings, won the Davis cup twice and won a total of 17 tournaments including 2 grand slams. His total career prize money alone (without sponsors) totaled $14.3 million.

• Maria Sharapova: Probably the most famous rags to riches story in tennis. She left Sochi at just 9 years old and turned up uninvited at the Nick Bollettieri tennis Academy in Florida with her Father. She was accepted but her Father had to wash dishes in the US and struggled to pay the bills.
  She went on to win 5 grand slam titles so far, including winning Wimbledon aged just 17. She's currently already earned $36.5 million in prize money and a staggering $285 million in sponsorship deals.

How much do successful tennis players earn?

Aswell as the traditional prize money, tennis players these days have many additional revenue streams:

• Sponsorship contracts: Some of the biggest sports retailers in the world sponsor tennis stars, such as: Nike,Adidas and Wilson.

• Advertising contracts: Some of the biggest companies in the world pay tennis stars to help them advertise, such as: Porsche, Mercedes and Tag Heuer.

• Exhibition fees.

• Appearance fees: Some of the smaller tournaments actually pay stars just to turn up.

• Licensing their image rights.

Prize money

• A world class tennis player earns massive amounts of prize money with Roger Federer and Novak Djocovic becoming the first 2 players with over $100 million in career earnings and they're still playing.

• A player with a few title wins can earn around $5 million, French star Sebastien Grosjean has earned $8.1 million with just 4 tournament wins.

• A low ranked player is still likely to earn $1 million, players ranked around 4-500 generally earn around $1 million in prize money.

Sponsorships

For a lot of players sponsorship earnings can be far more than prize money. Japanese player Kei Nishikori was estimated by Forbes to have earned $30 million in sponsorships in 2016 despite his prize money earnings being just $3.6 million.

• Serena Williams is reported to have a 5 year deal with Nike worth $55 million.

• Roger Federer has a 10 year deal with Nike worth around $100 million, in 2016 he's estimated to have made $54 million in sponsorships compared to just $6 million in prize money.

Appearance fees

Tennis stars need to accumulate ranking points so they compete in the big tournaments, small tournaments can't offer many ranking points so they sometimes pay a cash sum for the big stars to attend.

Exhibition fees

Retired tennis players often play exhibition matches and tournaments, the fee just for their appearance is normally between $50,000-$250,000.

How does the sports agency market look currently?

Sports agencies currently offer an all round package, they act as headhunters, investors and PR providers.
They normally sign players when they're aged 13-15 years old.
Once the player turns pro and starts climbing the ATP or WTA rankings, the agencies help find the players sponsorship and advertising deals, and take a 20% cut of the revenue.

The biggest sports agencies are huge. The top 10 have $25.3 billion worth of contracts under their management.
The business model will aim to share the funds between the whole community (scouts, promoters and token holders).

A lot of tennis stars aren't happy with the current model. The biggest agency, IMG basically has a monopoly in tennis.
Andy Murray and Roger Federer have both set up their own agency partly because they weren't happy with the way things were going.
Andy Murray stated that the reason for leaving his previous agency and creating his own was: "it will allow him more freedom in decision-making and the chance to become more involved in his business affairs".
TokenStars says that they'll work with established players as well as rising stars, stating that 20% of the worlds 300 best players are overlook by the traditional agencies.

TokenStars ACE model

Holders of the new token can have 3 roles:

• Scouts
• Promoters
• Analysts

The current sports agency model has a few problems:

• Hiring full time scouts: It's expensive to have full time salaried scouts.

• Difficult to cover all areas: Many scouts ignore countries that don't have a history of producing tennis stars.

• The current process is subjective: Its based on 1 persons gut feeling rather than using stats.

• Its open to corruption: There's been reported cases of 'kick backs' where the tennis player gives some of his contract to the agent in return for receiving an improved review of their tennis ability.

Tennis scouting is outdated

They believe the current model of scouting is out dated, many other sports have moved to a more statistical approach for analyzing sports players.
Considering the advances of Artificial Intelligence this is likely to become even more the case in the future. Using statistical analysis as the prime criteria for selecting players can be seen in the film Moneyball, which is based on the true story of a baseball team who, due to a lack of funds use a sophisticated saber-metric process to find players that they can afford to sign that have been over looked by other teams.
In football some of the biggest teams in the world use the InStat software that analyzes players based on statistics. The InStats data analytics company has 1300 clients that search their database for talented players to sign.

The Token Stars ACE model will use a global scouting network of 600 part time analysts from around the globe, they believe this will be far more economical than the major sports agencies who employ up to 60 full time scouts.
The scouts role after following the tutorials will be to:

• Analyze data: Look at local junior rankings and tournament results to find potential targets.

• Contact players,parents, clubs or coaches in social media networks.

• Submit applications to the ACE full time scouts.

• Hold assessments at local locations, cutting out the expensive costs that sports agencies incur.

• Use the most advanced equipment during assessments, such as the Babolat smart racquet that can record a variety of different statistics, such as serve speed.

• Use a sophisticated player assessment check list: 50+ different parameters.

• Submit their assessments to the ACE platform.

Paying the scouts

Scouts will work on a commission basis and receive a large commission when a player is successfully recruited. They'll receive compensation for:

• Submitting the players application: 100 tokens or $100 (no more than $120 total worth)

• When the application is approved: 900 tokens or $900 (no more than $1080)

• Assisting with the players offline assessment: 500 tokens or $500 (not more than $600)

• Player is selected and signs their contract with ACE: 8,500 tokens or $8500 (not more than $12,750)

The bonus can be split between several people. In many of TokenStars target countries a full time scouts country is just $1000 per month or less, so they'll only need to sign around 1 player per year to make a similar amount on the new platform.

How will TokenStars make money?

The new agency will charge the standard commission rate of 20% of the players net prize money and 20-25% of a players sponsorship revenue.

TokenStars plans

They're aiming to become a full-cycle talent management agency. They're going to start with tennis and football and then scale into other sports, whilst also expanding to add existing players to their platform and then targeting non sports niches such as acting and models.

Some of the key members of the team

• Pavel Stukolov, CEO: Investment professional with a estimated net worth of $95 million.

• Irina Shashkina, CMO: ex CMO at groupon Russia, ex Biz Dev Executive at Rambler&Co.

• Evgeniy Potapov, CTO: 10 years as the founder and CEO of IT Summa, a company which had 60 employees.

• Vladimir Shmidt, CFO: Co-founder of teamo.ru, a dating service with a market cap of $100 million after finalizing the deal.

Planned use of ICO funds

This will obviously depend upon how successful the ICO is but for a scenario involving $7.5 million raised TokenStars state they'll use the revenue as follows:

• 38.6% on initial player grants: They'll sign a minimum of 10 juniors with the money spent on: academies, coaching, travel and equipment.

• 19.3% marketing: Platform promotion to attract scouts, promoters, new users and professional players.

• 12.9% follow on grants: Additional funding for the juniors with the most potential.

• 8.4% PR: For ACE events and tournaments.

• 3.9% Operational team: To pay for management salaries including taxes.

• 3.9% IT team: coders and tech platform developers.

• 4.6% Ad sales team: Paying salaries to sponsorship sales representatives.

• 1.9% Scouting team: Salary for head scout and in-house/ external scouting network.

• 2.7% Other costs: Such as accounting, audit, travel and rent.

• 1.5% Legal: Legal consulting for the blockchain.

TokenStars ICO Details

• Token sale dates: September 10- 31st of October.

• Token cost: 0.0001 BTC

• my TokenStars link gives an extra 5% bonus tokens on top of your purchase.

• Tokens for sale: 99 million

• Payment methods: Bitcoin or Ethereum

• Soft cap: $750,000

• Hard cap: 99,000,000 token sales.

Conclusion

The team behind TokenStars all have a successful history which is one of the main things I look for in an ICO. The business model seems to have a lot of potential, with the existing talent agencies not using statistics as much as other sports already are and seemingly not have such an economical approach to talent acquisition as TokenStars will.

Links:

Website: TokenStars website
Whitepaper: View whitepaper here