# Valuation

Overview on how athlete valuation is calculated

### How do you define what share of prize money a token holder is entitled to?

The share of prize money that comes with a token depends on two factors: (1) The initial sales prize of the token and (2) the expected earnings of the athlete. The sales price of the token gets divided by the expected earnings of the athlete, rendering the share of earnings that are associated with the token. This means that if the athlete performs exactly as expected, the FANs will receive payouts that match exactly their initial purchase prize. In case the athlete under-/overperforms, the FANs will receive lower/ higher payouts than their initial investment.
Please refer to the enclosed table to see an example:
Exemplary calculation to determine the share of prize money per token
Re (1): The initial sales prize of the token is defined by the athletes. Thus it differs per tier and athlete. We currently expect that most tokens will be priced as follows:
• Bronze: 99 USD
• Silver: 499 USD
• Gold: Between 999 USD and 9,999 USD
Re (2): The expected earnings of the athlete are determined by the athletes themselves, as they are also the ones selling their tokens via the platform. FANtium does, however, offer them support in finding an appropriate valuation.
Calculating the expected earnings is done differently for professionals and talents. This is mainly due to the fact that professionals will only share their prize money per season whereas talents are going to share their earnings over a longer period of time (up to 10 years).

#### Professional athletes

Season tokens only entitle FANs to ownership in the athlete’s next season’s prize money. The way in which the expected earnings are evaluated depends on the athlete's situation. Normally one of the following three calculation methods is used:
(1) Three year average: The most common calculation method refers to the last three seasons that the athlete has played. It takes the average prize money that the athlete has achieved and uses this average to evaluate the expected prize money of the upcoming season.
Please refer to the enclosed table to see the calculation of an exemplary athlete, evaluating his/ her expected prize money for the 2023 season:
Exemplary athlete, evaluating his/ her expected prize money for the 2023 season
Thus, the expected prize money for the 2023 season would be \$1,066,667.
(2) Year to date earnings: Depending on the stage of the current season, an alternative way to evaluate the expected earnings of the upcoming season is by referring to the accumulated prize money the athlete has earned this far in the current season. For example: If this calculation method is applied and the athlete has gained \$1,400,000 in prize money through October 2022, the 2023 season would be valued at \$1,400,000. This is attractive to the FANs as there is upside potential simply due to the fact that the valuation was based on an artificially shortened season.
(3) Prior seasons earnings: A third alternative way to evaluate the expected prize money of the upcoming season is by looking at the prize money that the athlete has generated in the last completed season. If for example we are evaluating the 2023 season and in the last completed season (i.e. 2021), the athlete had gained \$1,300,000, then the 2023 season would be valued at \$1,300,000.
As already said, the applicable calculation method is selected by the athlete as he / she is also publishing and selling the token. FANtium supports him / her in making the selection and takes into account factors such as the stage of the current season as well as the past performance of the athlete.

#### Talents

The assessment of the expected earnings of talents works differently. As talent tokens enable FANs to participate in earnings for more than a single season (usually between 4 - 10 seasons), a number of factors are considered when determining the future expected earnings of the talent. The primary determining factors are the age as well as the current (ATP / WTA) ranking that the talent has. Based on this, FANtium forecasts projected earnings, which are then reviewed by affiliated talent scouts / agents, who also take into account other factors such as past tournament performance, background, and training setup. Finally the provisional proposals are discussed with the talent, who then makes the final decision on the expected earnings that he / she wants to use when publishing their tokens.
In the future, once there is a sufficient number of FANs on the platform, we can also see this evolving to some form of auction, where the market can define the initial valuation of an athlete.