What The Hell Is This Company The 76ers Just Partnered With?
3:51 PM EST on December 23, 2021
On Monday, the Philadelphia 76ers announced a partnership with a company called Color Star, which “focuses on the application of tech and artificial intelligence (AI) in the entertainment industry.” The press release from the team featured a quote from Color Star’s CEO, Lucas Capetian (“thrilled to partner with the Philadelphia 76ers, a top-level NBA team”), and a short video from the contract signing event in Philadelphia. “The 76ers, over the last several years, have aspired and grown into an international brand,” Sixers president Chris Heck said in the clip. “And we think that alignment with Color Star is a great honor for us, and we’re very excited about our partnership this year and for years to come.”
For all the thrill, honor, and excitement, information about the partnership, the company, and its CEO is curiously difficult to come by. What exactly is Color Star? Who is Lucas Capetian? Why does the Color Star press release refer to him as “Sir Lucas Capetian”? What drew an NBA team to “an entertainment technology” company with no apparent product, a history in the ready-mix concrete business, and a CEO whose name and credentials seem made up? They’re straightforward questions no one seems especially keen to answer.
As Color Star tells it—in one of the many bizarre press releases that constitute nearly the entirety of the company’s online presence—Capetian took over as chairman and CEO last week following former CEO Basil Wilson’s resignation “due to health reasons.” The Color Star press release introduced its new CEO as a holder of an executive MBA from Harvard Business School, which doesn’t award executive MBAs. (Harvard’s offices are closed for the holiday break, so a call to the registrar’s office wasn’t returned.) In the release, Capetian promised to continue the company’s development of “metaverse and NFT products.”
Capetian’s profile on LinkedIn, where he’d made 10 connections as of Tuesday, offered little more insight. (It did offer some laughs in the form of a Witcher-esque profile picture.) He’d written one fairly inscrutable post about NFTs. Pinned to his page were two certificates from online courses offered through the World Health Organization, one called “recognizing and managing anaphylaxis” and one called “guidance on developing a national deployment and vaccination plan for COVID-19 vaccines.” The links printed on both certificates led to a verification page that said they’d been issued to Xiaoyan Huang. By Wednesday morning, after we tried connecting with Capetian on LinkedIn, the profile had been deleted. A public records search for Lucas Capetian turned up no one by that name.
“Their CEO does exist,” a Sixers spokesperson insisted. “I believe he’s based in Europe.”
Though it was Capetian quoted in the Sixers press release, Color Star was represented by a man named Jarom Heaps at the partnership signing ceremony. It’s not super clear how or why this happened. Heaps, who is vice president at a “merchant bank and advisory firm” called Veyo Partners, would seem like an extraneous proxy, here: According to the 76ers press release, the deal was brokered by a company called Red Phoenix Entertainment, which describes its business as bridging “American sports and entertainment with emerging markets.” Red Phoenix had representatives on the scene of the signing ceremony, including CEO Leif Rogers and communications manager Yao Yao.
This was good for our curiosity! The more verifiably real people there are attached to the deal, the easier it should be to chart a path to Sir Lucas Capetian himself. Except, weirdly, it seems no one on the Color Star side of the 76ers partnership has any interest in talking about it. Phone calls and emails and direct messages directed at Heaps, Rogers, and Yao have gone unanswered and unacknowledged. Color Star’s extraordinarily busted website (generally a pretty encouraging sign that your internet technology company is super serious and real) makes no mention of the 76ers deal. Red Phoenix’s somewhat less-busted website reprints the 76ers press release word-for-word under its news tab.
Just as we were beginning to abandon all hope of communicating directly with anyone, Color Star Director of Communications Douglas Menelly reached out to Defector Wednesday and offered to answer our questions. Menelly’s involvement in Color Star is, itself, somewhat confusing: Menelly is identified as Director of Public Relations & Media at New York-based investor relations firm Skyline Corporate Communications Group, both on the company’s website and on his own LinkedIn profile, which makes no mention of a role at Color Star. Menelly nevertheless downplayed his role at Skyline and told Defector he is primarily engaged with Color Star, where he devotes “75 percent of his time and effort.” This winds up being sort of difficult to fathom. For example: When asked about Color Star’s representation at the 76ers' partnership signing ceremony, Menelly misidentified Jarom Heaps as outgoing Color Star CEO Basil Wilson, claimed no knowledge whatsoever of an individual named Jarom Heaps, was unaware of any business relationship between Color Star and Veyo Partners, and suggested that perhaps the 76ers had accidentally put out the wrong nameplate for Wilson, when it is easily verifiable that the individual seated next to 76ers President Chris Heck was indisputably Veyo Partners vice president Jarom Heaps.
Despite presenting the public face of what right now appears to be a quarter-assed foray into the unregulated NFT marketplace, poor Douglas Menelly eventually comes across as something of a sympathetic character, not least because he is the only person on the Color Star end of this new partnership who has expressed any willingness to talk about it, or for that matter is verifiably corporeal. Menelly seemed ill-prepared to represent his company to Defector, not because of our bad-ass advanced interview techniques but because he knows surprisingly little about his own company. Defector’s conversation with Color Star’s Director of Communications was marked by Menelly’s confusion about Color Star’s business, web presence, and history; incomplete knowledge of the credentials of its incoming CEO, whom Menelly has neither met nor seen; and misapprehensions about the functionality of Color Star’s signature Color World app, which according to SEC filings and Menelly’s understanding, accounts for a full 100 percent of Color Star’s revenue.
Menelly pitched the Color World app as similar to MasterClass, the streaming platform with courses taught by celebrity experts. The Sixers spokesperson offered the same comparison, and added that the partnership might include taped interviews with the Sixers’ president of basketball operations or their CEO that could then run on the app’s “leadership vertical.” A Color Star press release from Dec. 7, 2020 said the app’s Chinese version had 600,000 registered users since its launch in September of that year and promised an international release at the end of 2020. According to an equity research report commissioned by the company, the Color World app generates revenue through subscription fees; the base price to access the platform is $9.90 per user per month with some additional costs to learn from “tier 1” and “tier 2” artists. But a year after the international version of the app was slated to launch, all that’s visible when you download and open the Color World app is a video advertisement for the app. “The company online app, Color World, is a brand new interactive platform for megastar celebrities and fans that combines the concepts of parallel universe entertainment project and NFT,” the ad begins, coherently. The version in the Chinese app store is no more usable; someone we asked to download the app in Hong Kong encountered the same video and couldn’t access any of the promised features. Despite offering nothing to users, and certainly no leadership vertical, the app has something like 200 effusive five-star reviews.
When Defector pointed out the profound shabbiness of Color Star’s two websites, Menelly expressed surprise and disappointment, and described their condition as “pretty embarrassing.” Color Star’s English-language website is heavily borked and essentially non-functional: There’s a bright autoplay video, but clicking around reveals how little work and upkeep has gone into making it useful for selling an education product. Buttons labeled “View Courses” and “View All Courses” lead to the same page of low-quality headshots, arranged in a tile layout, of Color Star partners, with no identifying information or information about the corresponding courses; click on any one of them and the site loads … a slideshow of the same 16 headshots depicted on the page, and nothing else. Menelly seemed caught off-guard by these issues, but assured Defector that “the primary site” is the Chinese-language one, color-star.cn. This website—topped with an enormous image of Shaquille O'Neal—is in somewhat better shape, but it shares with the English-language site and the Color World app itself the quality of seeming less like a product and much more like an ad for a product. Click through “Instructors” and you will land on a broken page featuring a shortened description of the career of retired Spanish soccer star David Villa, with no information about what sort of “course” Villa might be leading. Click on “more” and you will get a deeply upsetting, rapidly cycling slideshow of a single distorted image of what can only be described as Bom David Villa, atop the same text, but reformatted.
Scroll down to “Explore Other Courses”—another auto-cycling slideshow of poorly formatted images—and click on the image of longtime television director Bobby Roth, and you land on another broken page. Two video blocks load nothing; another slideshow, this time aligned vertically, cycles the same two promotional headshots of the director; the same two photos break up a wall of text lower on the page, which provides a summary of Roth’s career and work in Chinese cinema, and then some promises about what his collaboration will mean for Color Star and its Color World app.
“The signing of a contract with a film master like Bobby Roth this time indicates that we are ready for the release of the software. CEO Lu Zongyue said, “This signing is the prelude to our cooperation with global celebrity mentors. More international artists have signed contracts. We have prepared a list of hundreds of tutors. They will successively log on to our online education platform and become our star teachers.”Color Star
Notably missing is what exactly Roth will teach in his online course. Perhaps most weirdly of all, the contact portion of Color Star’s “primary site” presents a New York telephone number and Gmail account as the preferred methods of contact, both of which would seem extremely out of place for an established and successful tech company operating a China-centric education app popular among a paying subscriber base apparently made up mainly of Chinese users. The New York number, when we tried it, was disconnected.
Neither site seems at all built to appeal to or serve the needs of prospective students, at least in part because they just don’t work very well, or at all. This can seem like a fairly rich criticism coming from a blog on Defector dot com—Defector’s own website occasionally freaks out and behaves poorly, in no small part because it is owned and operated by a bunch of sicko blogger idiots and all of its tech-side stuff is handled by an often-overextended contractor. This could’ve been a point of commiseration between Defector and Menelly, except that Menelly insisted to Defector that all of Color Star’s web services are handled in-house by a dedicated team of Color Star employees. “The company’s got all their own designers, developers, um, web interface engineers, everything is in house. They have an entire technical and software development team, all the engineers. They’re all based in Dubai.”
It’s worth taking a few moments to dig around in the history of this Color Star operation. This company proposes to operate a metaverse, and thus to facilitate the refashioning of your human identity, to host as much as you are willing to relocate of your moment-to-moment social engagement away from the physical world, and to occupy a frankly alarmingly substantial part of your very experience of living. Proposing such a thing ought to require some sort of burden of proof, if not a straitjacket. If nothing else, we ought at least to know something about those inviting us to digitize and monetize our infinitely precious lives. Are these Metaverse Lords sufficiently grounded in whatever fields might conceivably make a person qualified to operate, uhh, existence itself? Or are they, for example, a hastily retrofitted construction materials outfit hoping to cash in on a sudden frenzied pan-cultural lurch into blockchain hell?
The Sixers spokesperson pointed out that the company is traded on NASDAQ, which it is; shares of Color Star Technology Co., Ltd. closed Wednesday at $0.52. Certain facts can be learned about Color Star from a trove of boring old filings the company has made over time to the Securities and Exchange Commission since Color Star began issuing shares in 2018. According to a summary found in the company’s 2019 annual report, Color Star began its life way back in 2005, as TJS Wood Flooring, and in 2007 was subsequently incorporated (like so many companies seeking maximally favorable business conditions) in the state of Delaware. A year later, but still long before TJS Wood Flooring became Color Star: Administrator Of The Metaverse, it was renamed China Advanced Construction Materials Group, after something called a “reverse acquisition transaction.” In 2013, China Advanced Construction Materials Group did something called a “reincorporation merger” with a wholly owned subsidiary, and was suddenly operating out of Nevada. At this point the company still at least postured as if straightforwardly operating in the construction industry, and in fact would continue doing so through the end of 2019. In a 2018 filing, the company described its business as “primarily focused on engineering, producing, servicing, delivering, and pumping a comprehensive range of advanced ready-mix concrete materials for highly technical, large scale, and environmentally friendly construction projects.”
But the Big Business Moves were only getting started. In August 2018, an entity called CACM Group NY was incorporated in the state of New York as a wholly owned subsidiary of a company called Huitao Technology Co., with the objective to “expand the Company’s construction material business in the New York [sic].” Later that year, the whole shebang once again underwent a “reincorporation merger” with “a newly formed Cayman Islands company” called, conveniently enough, China Advanced Construction Materials Group. As if this weren't all confusing enough, in June 2019 the company filed notice with the SEC that it had “received the stamped Certificate of Incorporation on Change of Name” from the appropriate Cayman Islands registrar, and had changed its name to Huitao Technology Co. Ltd.
It wasn’t until early 2020 that the company then known as Huitao Technology Co. Ltd. first began dabbling in the education sector. As noted in an annual report presented later that year, Huitao’s concrete business was failing, it says due to “the economic cycle and government policies,” which led to a “deteriorating cash position” and eventually a default on bank loans totaling more than $20 million. In the midst of this downturn, Huitao began diversifying its business, first with the absorption of a company called Sunway Kids, an “education and health service provider to day-care and preschools in China.” Sunway Kids has its own deeply sketchy origin story: According to a filing from Huitao in February 2020, Sunway Kids began in 2012 “as an offshore holding company,” before establishing its own wholly owned subsidiary, Brave Millennium Limited, in 2018, operating under the laws of Hong Kong. In December 2019, Brave Millennium established “a wholly foreign-owned limited liability company” called Chengdu Hengshanghui Education Consulting Co., Ltd. By now your head is spinning. It’s fine! Here is a helpful chart that Huitao put in that 2020 filing, laying out their corporate structure:
It seems that at least one of these entities under the control of Sunway Kids may, in fact, have engaged in the early childhood education business. This appears to have been where Huitao first encountered the online course model and what it then described as “AI and robotic technologies.” In fact, Huitao identified a vaguely skin-crawly pot of gold on the horizon for Sunway Kids and the early childhood education business:
“With the introduction of the national two-child policy in China since 2015, the birth rate has been increasing and thus provides a guaranteed increase in opportunity for the preschool education industry.”Huitao Technology Co. Ltd.
In May 2020 the company found itself back before that Cayman Islands registrar, once again seeking and receiving a stamped Certificate of Incorporation on Change of Name and becoming, at long last, Color Star Technology Co. Ltd. The following day, Color Star completed the sale of its entire concrete business, offloaded as Xin Ao Construction Materials. Color Star retained CACM Group NY, ostensibly so that it could continue operating out of New York, but now described it solely as part of its “online and offline innovative music education” business. A week and a half later, Color Star completed the absorption of a company called Color China Entertainment Limited, which Color Star identified as “an emerging performance equipment and music education provider with a significant collection of performance specific assets and unique experience in working with many renowned artists.” If that seems like another awkward fit with Color Star’s legacy concrete-pumping operation, it at least finally points to how Color Star wound up where it is today, centering star-led music- and entertainment-focused courses as the foundation of an online education business. In July, Color Star’s CEO stepped down into a smaller role in the company and was replaced by a man named Biao Lu, described as “an experienced veteran in the entertainment industry in China.”
In place now were an entertainment industry veteran CEO, an education business with a nominally successful online course template plus experience with “AI and robotic technologies,” and a music education business loaded down with “performance assets” and boasting relationships with “many renowned artists.” There would soon be more upheaval, and you start to wonder where in here the company found time to start developing a digital universe: Biao Lu resigned as CEO less than a year later, in June 2021, and was replaced by Basil Wilson. Wilson lasted a whole six months before being replaced by the mysterious Sir Lucas Capetian.
Whew. It’s been quite a journey, but here we are at last at the real jumping-off point of this flooring company’s long transformation into a, ah, metaverse. As of this moment, you know more about Color Star’s business history than Color Star Director of Communications Douglas Menelly: When asked about Color Star’s pivot from pumping concrete to administering The Matrix, Menelly expressed confusion. “Not that I’m aware of? What do you mean by ‘construction materials?” asked Menelly, before launching into a history of outgoing CEO Basil Wilson’s experience with the “different LED screens” and “different lasers” and “all the different visual effects that go around and support someone like Lady Gaga.”
The Sixers couldn’t give any specifics as to the origins of this strange match beyond that all new business comes in through the franchise’s partnership marketing team. The Sixers spokesperson listened to our concerns about the company and CEO possibly not existing and recommended reaching out to “the PR agency that reps them,” but the address they gave us was for Color Star’s investor relations department.
Before that, we’d called a number listed on one of Color Star’s SEC filings, reached someone who identified herself as Cassie in investor relations, and asked to speak with the company’s elusive CEO. She said Capetian was best reached by email, but an email sent on Tuesday to the address she gave Defector has gone unanswered. Cassie hasn’t answered subsequent calls.
“We're a publicly traded company!" Menelly said. "And, you know, to have things like this where—I find it quite frustrating as well, it's hard for me to explain if we have a shareholder that googles the new CEO’s name, and you cannot find anything about him anywhere.” Menelly, ever the trooper, agreed to try to make Capetian available for questions, but did not sound very confident.
Sir Lucas Capetian remains, for now, a subject of mystery, both for Defector and for Menelly, who could not explain how the honorific “sir” got attached to the CEO’s name in SEC filings and a company-issued press release. Menelly has not yet met Capetian, but plans to travel to Dubai “probably in late January” to meet his company’s leadership. It’s fascinating to think of what he may learn about his company when he gets there.
Stay in touch
Sign up for our free newsletter