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Âàñèëü÷åíêî Îëåíà Àíàòî볿âíà

Tennis-players, who go in for one of the most popular types of sports, have always been very attractive objects of capital investments. We aimed our Business Communication project at proving the potential investors interested in tennis the profitability and attractiveness of making investments in Ukrainian young tennis-players. In this paper you will see how one can get a decent return on his investments, become famous and receive pleasure at the sane time.

Have you ever fallen to thinking that investments in tennis can produce a considerable profit? Look at the data in Table 1 where several tennis-players earnings for January and February of 2000 are given.

It is evident that the chances of an invested tennis-player’s becoming a finalist or a champion are not that big. But who says that in order to carry out repayable investments in a tennis-player, the latter must without fail become “one of the first”. There is no doubt that a profit of investments will be much bigger, if the investor’s ward takes one of the first places. But one should not worry very much if the tennis-player fails to achieve even the 1/8 of a final.

Table 1 Several tennis-players earnings for January and February of 2000

The matter is that, prize funds of the famous tournaments, which are held by the World Tennis Association, are rather large, and prize payment is made to all tournament participants [1]. The investor’s financial support will give an opportunity to bring up a worthy tennis-player of a world level.

Now let us consider the prospects of investments in tennis-players in details.

The World Tennis Association holds tournaments throughout the year. There are two types of them:

• ATP Tournament & ITF – series of tournaments for men;
• WTA Tournament – series of tournaments for women.

Prize fund of ATP tournaments for the year 2000 is $60 507 750, and prize fund of WTA tournaments is $27 676 000. In 2000 129 such competitions are going to be held: 72 ÀÒÐ tournaments & 57 WTA tournaments [2].

An average sum of money, which a typical tennis-player can earn per year, is given in Table 2.

Name of Tournament	Prize Fund for the Year 2000, $	Number of Tournaments	Average Prize Fund of 1 Tournament, $	Average Earnings of 1 Player for Tournament, $	Average Earnings of 1 Player for 24 Tournaments in 2000, $
ATP	60 507 750	72	840 385	17 508	420 192
WTA	27 676 000	57	485 544	10 116	242 784

According to Table 2, an average prize fund of one ATP tournament is $840385 ($60 507 750: 72), and of one WTA tournament is $485 544 ($27 676 000: 57).

Let us assume that in each tournament there are on the average 48 participants. So a typical male tennis-player can earn approximately $17 508 ($840 385:48), and an average female tennis-player can earn $10 116 ($485 544:57).

If a tennis-player participates in 24 tournaments per year only (just 2 tournaments per month) of all the tournaments held, then per year a typical male tennis-player will earn $420 192 ($17 508·24), and a typical female tennis-player can receive $242 784 ($10 116·24) (Table 2).

In order to bring up a tennis-player of a world level, it is necessary to invest approximately $55 000 (detailed calculations are given below) in him per year during 4 or 5 years. In other words, one will invest $220 000 - $275 000 in a tennis-player before the latter will be able to yield a profit. But as we can see from our previous calculations all expenditures can be returned during the tennis-player’s first year participation in ATP or WTA tournaments.

Besides, one should not forget that all calculations of average earnings per year were done for an average (according to the world rating) tennis-player, which did not achieve even the 1/8 of a final, saying nothing about the 1/4, 1/2 of a final or about a final.

The investor, carrying out investments in any project, expects that he will not only return the money soon, but also receive a profit[3, 248]. We have shown that if one makes investments in a talented child this money will be returned and will bring a profit.

But here we must remark that one of the peculiarities of investments in young tennis-players is that capital investments in some cases will be repaid only in several years[3, 163]. A risk of investments not being recouped exists always, so we will consider the risks of this kind of investments in details.

While investing in Ukrainian young tennis-players, one should know that in our country there are all grounds to achieve the best results. There are three components, reducing investment risk in this sphere and assuring success to one’s initiative, in Ukraine. They are:

Under the potential we understand talented children, going in for tennis for many years, who have achieved excellent results. We mean those tennis-players who have participated not only in regional or national tournaments, but also in world-known large tennis tournaments, organized by the World Tennis Association. These are not mere words. The first place in the world children rating is taken by a tennis-player from Donetsk Julia Beilgerzimer [4; 5] . Also, there are such stars of children tennis, which have been brought in the Donetsk School of the Olympic Reserve, as Dmitry Tolok, Orest Tereshuk, and Maxim Krivonos.

The second component of investors’ success is good courts. This prerequisite is also fulfilled in our country. The best tennis courts are the ones situated in Kiev, Donetsk, Dnepropetrovsk, Kharkov, and Lvov. Good courts call for the best game. The most experienced Ukrainian coaches and tennis-players can be neither surprised nor frightened by the famous all over the world tournaments, because Ukraine, and especially Donetsk, have had the main potential of perspective young tennis-players among all newly independent states since the times of the USSR.

It is not only because of the playing facilities that Donetsk has become such a well - known tennis center. Our sport school of the Olympic Reserve has brought up such stars as Marina Kroshina and Irina Morozova who were the Champions of the USSR, Elena Yeliseenko from Donetsk who was the Champion of Ukraine, Alexander Gruzdin from Lvov who was the first Soviet winner of the European Championship among the youth, and Oleg Egorov who was the Champion of Europe. [6, 130]. The fact that our tennis-players have accustomed not only to participating in the famous tournaments, but also to winning is very important. It is the third component for the success: tennis traditions.

In Donetsk Davis Cup (a tennis tournament among countries) has been repeatedly held. That is, Ukrainian courts and conditions corresponded to the world standards. All this has not disappeared. In post-Soviet time Ukrainian tennis team has already achieved a Davis Cup final [6, 95].

Thus, the combination of three components – good potential, courts, and profound tennis traditions – reduces investment risk connected with investments in Ukrainian young tennis-players to a marked degree.

In case of investments in tennis we are talking not only about money and profit expected. In our paper we address those people, who understand and like tennis, we address the true admirers of this kind of sport. When one’s tennis ward achieves certain results, the investor’s name and his company name will surely be associated with tennis, what will be an additional advertisement of his business.

It is rather difficult to get a profit from investments in a tennis-player, if the latter does not obtain the world’s recognition. For that, it is necessary that investor’s ward have the corresponding class of game, that is the corresponding preparation.

In order to become a good tennis-player, a young sportsman has to train himself with persistency every day. It is the principal prerequisite to achieve success. Coaches say that a young tennis-player having no super talent but training persistently will attempt in tennis much more than a talented one who has no possibility to have training of full value.

Here is list of the basic necessities for young tennis-player to train himself in Ukraine:

• tennis rackets, which periodically tear and break ($50-200 for a unit);
• numerous tennis balls, which must be replaced very often as after 1-2 trainings their pile is erased, what does not allow a sportsman to return “twisted” balls ($5-10 for 3 units);
• sport school fee (25 hryvnas a month).

When one goes seriously in for tennis the prices are completely different. One hour of the individual training with a coach costs approximately 30 hryvnas-12 dollars. The same is the price of practicing in a pair with a good sparring–partner, who is usually ex-tennis-player of a high class. Besides, one should practice 2-4 hours a day not taking into account a common physical training with an individual coach.

In general, the process of training costs $700-1 200 a month or $10 000-15 000 a year. A young tennis-player should be invested in at the age of 11-12 years, and when he is 15-17 years old he can

already bring profits. Consequently, it is necessary to make investments during 4-5 years, that is the expenditures for the training during that time will be $50 000-75 000.

In order to earn good money a tennis-player has to achieve the world recognition. So the sportsman has to participate in the world tournaments organized by the World Tennis Association.

But to participate in such tournaments a tennis ward must take a certain place in the world rating of tennis-players (he must be at least in the first hundred). His place in this rating will depend on the quantity of the points received by him. On Ukrainian tournaments such international points are either not given or given in small quantities. Therefore, to “hunt” the points one must participate in the world recognized tournaments. For instance, in the 1/2 of a final of the tennis tournament in Miami the players who lost received 45 points, for comparison, Martina Hingis – the first world racket – has 1 650 points [7].

The tennis-player from the first hundred has to participate in a tournament and earn the points (for each round of different tournaments the different quantity of points is given). For a tennis-player without “name” it is necessary to buy a so-called wild card, so that he could participate in a tournament. The price of wild cards is different on different tournaments: from a few dollars (on Ukrainian tournaments) to a few thousand dollars.

As a result the expenses for the travelling to a tournament, as the experience shows, make up

approximately $35 000-40 000 a year. So that, including the value of the training, bringing up a tennis-player of the world level costs approximately $45 000-55 000 a year during 4-5 years. That is, the total sum of investments in a young sportsman before the investor can secure a profit will be approximately $180 000 – 275 000.

If one decides to invest in young tennis-players, it is absolutely natural that the investor’s first question will be how to do that. First of all, he needs to choose the right person on whom to bet.

There are several ways to solve this problem.

1. If the investor has plenty of free time, he can visit the tournaments himself, and choose the most able tennis-player taking into account the opinions of the competitive tennis-players and/or their coaches. It will allow him to make a right choice and to minimize the risk of the interested person’s influence on his decision.
2. One can also ask his acquaintance interested in tennis and well-known coaches. In this case the investor will economize his time. But using this means he risks to be deliberately offered a “wrong” sportsman, because his advisers can try to promote their relatives or the children of their friends.
3. The third option is a search of a “gifted” young tennis-player with the help of the special agencies, the addresses of which one can receive in tennis clubs, tennis schools or through the Internet (one of such agencies is situated in Kiev). These agencies have already noticed young sportsmen having large potential.

They can recommend the tennis-player taking the prize places of children tournaments. It is desirable that the investor looks how he trains, how he displays himself on the tournaments, taking into consideration what the coaches of the rival tennis-players and commentators-professionals think about him. It will reduce the risk of accepting of not quite a good offer given by the agency. Thus the investor can combine all three variants of searching his future ward. Though, from all the ways given above he can choose the one which suites him the most.

So, when one has found “a young talent” it is high time the investor started thinking about the financial and legal parts of the matter. These two things are usually reflected in a contract.

Of course, sometimes the parties prefer to keep their relationships on a friendly basis, - without any legal papers. But as the young tennis-player grows older, his professional sport-related activities become more and more time-consuming and expensive. That is when the investor needs to assure himself that the obligations of both parties will be fulfilled. Otherwise, the day might come when the ex-“young talent”, now the owner of numerous financial awards, will bail away with a mere “thanks”. That is only one of the reasons why the investor should conclude a legal contract with a player, whom he started financing.

In case of concluding a contract, one must take into account two the most important factors:

1. To protect the investor’s interests he has to determine exactly how the tennis-player will return the money invested in him. Here one can demonstrate his creativity. Actually, there are few classical patterns of doing that:

► the investor can take all tennis-player’s financial and/or other awards received over a certain period of time (for example, for one tournament or for three months a year during several years);

► one can agree upon taking a part of his tennis ward’s incomes on a fixed rate (the rates can vary, 20% during several years for example), but one should obligatory indicate the number of years;

► also, sometimes a tennis-player has to give away fixed prearranged sum each year (the number of years is determined).

2. The investor has to pay special attention to the legal questions. To protect him against possible claims in future one should not grudge his money for a good lawyer.

While negotiating the terms of the contract between sportsman and the investor, the latter should make sure that he has talked over their legitimacy with a professional lawyer. The contract has to be signed officially, so, by doing this in advance, the investor will avoid unnecessary uncertainty and save his time and effort (and, maybe, even money) on many things in future.

There is no contract, which would be suitable in any case. Every investor must negotiate the terms with the player (or the player’s parents, if he is under 15 [8, 10]) for their own situation. But in any case in the contract one should foresee the fact that after his future ward will have begun to participate in the international adult tennis tournaments held by the World Tennis Association (at the age of 17), he will have to cooperate with the investor for at least two years. During this period the investor will make no additional investments in the tennis-player, but only return the money invested in him and receive a profit as the percentage of his ward’s earnings. This per cent must be agreed by the contract to avoid any discords in future.

One should pay special attention to the legal questions concerning the capacity of the tennis-players of age and he validity of the transactions made by them. Thus the investor will protect himself against possible claims in future. To protect his interests the investor has to determine exactly how the tennis-player will return the money invested in him. It is a guarantee of investor’s receiving the profits on the capital invested. The investor should not forget to indicate the penalty for breach of the contract, which his ward will have to pay in case he violates the contract.

To sum up, the investor is sure to receive such profit, because in our country there are real grounds to achieve financial and intangible success in this sphere. There are potential of tennis-players, good tennis courts, and tennis traditions. Combination of these components reduces investment risk connected with investments in Ukrainian young tennis-players to a marked degree, and gives the investor a chance to bring up a worthy tennis-player of a world level.

Ñáîðíèê ñòàòåé ñòóäåí÷åñêîãî íàó÷íîãî îáùåñòâà “Ãàóäåàìóñ èãèòóð” èñòîðè÷åñêîãî ôàêóëüòåòà Äîíåöêîãî íàöèîíàëüíîãî óíèâåðñèòåòà. – Äîíåöê: Äîíåöêèé íàöèîíàëüíûé óíèâåðñèòåò, èñòîðè÷åñêèé ôàêóëüòåò, 2000. – ñ. 88 – 94.