How sports teams are using blockchain to recoup 2020’s losses

2020 was a difficult year to be a sports team. With traditional sources of revenue like tickets, food and drink, sponsorships, and in some cases TV subscriptions decimated, finding new and creative ways to engage fans became essential for clubs to survive.

However, these aren’t the only challenges clubs face. With the rise of the digital-native fan, both the sports and esports industries are being forced to explore more creative ways of maintaining fan engagement, rewarding fan loyalty, and ensuring an ROI for sponsors; as well as combating existing issues of fraud and corruption.

When it comes to innovative solutions for solving these challenges, there is one technology in particular that’s catching teams’ eyes… blockchain.

Below, we’ve looked at four of the most interesting innovations in the sports industry in 2020, and what clubs can do to drive revenue and fan engagement digitally and recoup some of last year’s losses.

Giving fans a bigger stake in club decisions

Several major sporting organisations – from top soccer clubs like FC Barcelona and Juventus to the National Basketball Association (NBA) – invested in fan tokens, underpinned by blockchain technology, to engage their fans and unlock profitable new revenue streams. The tokens act as the club’s own virtual currency and can be purchased with fiat currencies like pounds, dollars, or euros.

Fans purchase their tokens to unlock exclusive rewards and can also use their tokens to accumulate voting rights in decisions that affect their club, from deciding the colour of kit, to even picking the teams. Last year, Cypriot team Apollon FC allowed fans to vote on its match line-up and formation, which led to a win.

Offering new kinds of rewards

Aside from voting, these fan tokens can also be exchanged for merchandise, collectibles, or even exclusive matchday experiences. Those who implemented them in 2020, or even those who invested earlier, have already reaped the rewards.

Take FC Barcelona for example, whose first token sale sold out in less than two hours, raising US$1.3 million. With revenue from ticket sales from last year wiped out, this kind of innovation can unlock a critical new revenue stream for teams who are struggling.

The tokens can also work for loyalty programmes, rather than fans paying cash for them. On these platforms, fans can be rewarded for certain things, such as creating and sharing content, or through loyalty programmes that allow them to accumulate points or rewards to spend on merchandise, tickets, and digital collectibles.

These platforms not only help to foster a sense of community for fans, but can also enhance a club’s relationship with sponsors, as loyalty programmes underpinned by a blockchain foundation create a seamless loyalty ecosystem which can include club sponsors and partners. This enables fans to be rewarded for spending money with a sponsor for example, increasing the ROI for sponsors, and boosting profits for teams. What’s more, the transparent and traceable nature of blockchain technology means that both teams and sponsors benefit from a much more accurate and granular level of detail on fan behaviour.

Digital collectibles

Trading cards and collectibles have always been a profitable revenue stream for clubs. But a digital age, a lack of ticket sales, and a growing digital-native fan base (influenced by gaming and esports) have meant that teams need to diversify and find new ways of engaging fans. This means evolving and upgrading a traditional revenue stream into something which is both more profitable and more aligned with the digital native fanbase.

This is where digital collectibles come in. Clubs have already seen some level of success with this. In baseball, for instance, Major League fans can purchase blockchain-based All Star cards at a range of prices, generating new income for the club and appealing to a younger audience of sports fans.

By using blockchain (more accurately NFT technology) to create digital trading cards and memorabilia which fans can buy and trade, clubs can create collectibles with provable ownership and authenticity. This means clubs can create provably-rare or provably-unique digital collectibles (to appeal to collectors and to unlock profitable revenue streams), while fans get increased ownership and can prove the authenticity of their collectibles, which eliminates fraud from the equation. This allows clubs to keep pace with the changing consumption habits of fans and means fans can stay connected to teams, no matter where they are in the world.

This trend is set to continue into 2021, with Liverpool FC already announcing a partnership this month to create tradable cards for professional soccer players, allowing fans to play fantasy football games by using the cards to participate in the platform’s weekly competitions.

Augmenting the viewing experience

It’s crucial to find ways for fans to feel more involved in live games, even if they can’t be there in person.

As a result, it isn’t just blockchain that teams have been using to engage fans digitally during the past 12 months. Clubs are working on several innovative ways to provide viewers with a more interactive viewing experience.

For example, the English Premier League is enabling viewers to choose which perspective they want to watch the game from, including the ball, the referee, or even a specific player, meaning they can see the game from every angle. And others are testing new technology that would allow fans to ‘cheer’ during live games through an app. As fans watch a game, they can push a button to cheer, applaud or start a chant. Their recorded voice would then be piped into a stadium’s existing speaker systems.

With no firm return date to fan-filled stadiums, both fan engagement and finding creative ways to monetise the digital fanbase will continue to be a top priority for 2021.

It’s time for sports organisations to revolutionise outdated processes and revitalise their offering to keep pace with the evolving fanbase.

Clubs that can take advantage of technology stand not only to weather the storm, but to benefit from even more diverse revenue streams when ticket sales return.

Lars Rensing, CEO of enterprise blockchain services provider Protokol

Lars Rensing has been in the blockchain industry for more than four years, initially co-founding ARK. He is now chief executive and co-founder of enterprise blockchain services provider Protokol, which lowers the barriers to entry for blockchain and helps enterprises drive real value from the technology by increasing efficiency, improving cost effectiveness and enabling the creation of new value networks.

Source: EIN Newswire