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Blockchain Is a New Playground For The Sports Industry. But No Teams Here Yet

13 November 2018 13:13, UTC
Denis Goncharenko

With the emergence of blockchain and crypto, industries tried to test the technology for their needs in many different aspects. Sports industry didn’t avoid that as well. There are problems in the sphere, definitely. One of the biggest concerns is the funding of teams or sportsmen. Another one of the biggest issues is the increasing gap between the professional sportsmen wages, the cost of the tickets and the supporting audience. The demand for transparency and proper distribution of funding was obvious in the industry.

Through the decade, there were different ways of the industries intersecting, with the step-by-step increasing number of partnerships between fintech firms and sports teams. One of the first remarkable milestones was the crowdfunding of the Jamaican bobsleigh team, which raised over $30,000 in Dogecoin so that they could afford to take part in the Sochi Winter Olympics back in 2013-2014. The story was widely discussed, and made an impulse for the two industries to come closer. A similar story followed in 2014 with a campaign to raise over $55,000 in Dogecoin with the sum then used as sponsorship money to wrap the car of the NASCAR driver, Josh WISE. The sponsorship attracted media, and turned out to be another great impulse for the cryptocurrency community.

There were other cases of crypto implementations in the sports industry — the current year has presented a case of a transfer in the Turkish soccer club which was done partly through Bitcoin payment. Another news came from Canadian professional skater Ted-Jan BLOEMEN who claimed to receive sponsorship in cryptocurrency.

Nevertheless, such stories appeared to be single precedents rather than systematic events. Blockchain technology found more implementations in sport-oriented projects such as betting platforms. Sports industry responded with the practice of signing famous athletes as sponsors and brand ambassadors for cryptocurrency firms. This appeared to be quite a doubtful trend — lots of scams mislead the audience by attracting attention to the projects with the help of loud celebrities names, and sportsmen didn’t avoid that notoriously, unfortunately.

Blockchain and cryptocurrencies have ways to save sports industry from crisis, says Dean KIRKLAND, who is known under the alias of Crypto the Wonderdog, and is also a partner of Bitnewstoday.com. Dean and his good friend and co-author Charlie ROJAS discuss this topic in their show on their YouTube channel — both of them are passionate about sports, and would like to see how it returns to the roots of proper connection between professional sportsmen and their supporters.

“A lot of teams, a lot of organizations are going down, colleges teams are feeling at the worst. And from the audience’s point of view it isn’t much better — a common family can’t afford to go to a game due to high ticket prices. The money and prices of the things regarding sports have gotten out of control,” says Charlie. “The situation going on with professional sports as well. Not only as the attendance is falling, it's also the viewership. Audience gets bored or disinterested from the game, they're not willing to watch it. The current business models for sports is disaffecting people. It's getting them not to be interested in the games and building any loyalty.”

The ability of blockchain to boost the sports industry globally

Generally, the problem behind is not new. One part of it is about a huge gap between the celebrity professionals and the mass sportsmen and amateurs — it concerns wages, investments, promo contracts, etc.  And it’s not just the problem in the USA, who’s the world economic leader. Imagine the level of sports ecosystem in the developing countries and you’ll be disappointed as well. Another part is about the consumer behaviour, like Charlie said, the involvement of audience gets low, it is not loyal as before. However, the solutions are always there.

“The methods of teams funding themselves and grading resources no longer work. You can go to just about any college athletic department, you can go to any NFL team, NBA team, they're running deficits, they are not making money, they are not having the viewership they had 10 years ago. Where else, unless you go direct to the fans and say, "Are you willing to fund us?" Blockchain may be the one mechanism that allows that kind of peer-to-peer financing to occur,” Charlie ROJAS continues to express the idea of closing the year-by-year increasing dramatic gap between the sportsmen and the audience. The decreasing viewership is a litmus test which depicts the attitude to the whole industry, so why not try and change something? “Perhaps the single biggest question for the sports business today is whether media rights revenues will hold up as the traditional TV business is disrupted,” — Nielsen Sports global industry trends report kicked off the idea in a straightforward way.  

Well, Crypto the Wonderdog was not a single entity to notice the situation and the possible solution. According to Deloitte report for 2018, the blockchain was included in the list of trends to create changes with “the potential to disrupt the sports industry through their ability to mitigate risk, create new sources of value, and enable new secure transfers of information.” These are the general words, but what exactly can blockchain inflict on the sports industry to disrupt the current situation? Do it in a systematic way, not a single-use case, as it happened before?

Blockchain offers its potential to many challenges the industry is striving to improve. We mentioned that this technology has already being tested in the sports betting and gambling area. It creates new markets where fans can make wages on platforms that provide full transparency in the establishment of odds and the resolution of bets.

Further on, it can be ticket traceability and data capture. Blockchain can provide a more transparent view of the real demand/supply for each event, enable peer-to-peer transfer of tickets without a third party, and more accurately track the life cycle of a ticket, particularly when it changes hands. Another type of implementation is the engagement and reward system for the fans for behaviors beyond attending the sports events. The bonuses in form of digital currencies can drive greater social media use, enable participation in community events, reward engagement with content distribution channels, and strengthen corporate partnerships/sponsorship opportunities.

Blockhain is capable of bringing more to create working and developing systems in the industry, the ones mentioned above being just a tip of an iceberg. Today, there is a completely new and uncaptured field to play at. Getting back to Crypto the Wonderdog, they managed to reach the blockchain enthusiasts engaged in a project aimed at solving the problem of connection between the sportsmen and their supporters. “With the blockchain, you're capable as a fan to be able to actually support not only teams but players themselves through their development. There's a method that might allow fans to become connected to their teams and to their players," Dean KIRKLAND describes the new idea to tokenize the system of sportsmen support. According to the project concept, such system may be developed not just on a charity level, it may also contain a return-on-investment model, and they are working on it. Such projects can provide a great chance for the rookie or amateur sportsmen as well as the whole team to promote to another level of performance, which they couldn't have reached without proper funding.

“Citius, altius, fortius” as a conclusion

We are constantly and regularly writing about the ways the blockchain and cryptocurrencies change the landscape in the world of finances, insurance, legislation, logistics, real estate, etc. So, other industries are to feel the disruptive force of new technologies as well, and sports industry is definitely not the one to avoid that. There are signs of stagnation in the sphere, and it means the changes needed to be done. They were not systematic up to this year, and thus such situation is a great opportunity for entering the market right now and claiming a territory to work at the joint of blockchain and sports industries. Quite an irony that within the industry, based wholly on the principles of competition, there hasn’t been created a competitive ecosystem for new technological ideas implementation yet. But it is already being built right now by those who have the long-term vision, so as they often say at the tournaments, “let the best man win”