Sports is an ecosystem and tailor-made for the blockchain-based innovation of tokenization. In professional sports, many players come together: Athletes, fans, media, advertisers, and clubs. Tokenization brings fans and clubs closer together. The more fans invest, the more voting rights they get for decisions affecting the club. All rights can be represented with a unique, digitized and secure token. Tokenization is already being used for assets that are difficult to trade, making them liquid.
We live in a time that is becoming more and more digital, and this change does not stop at professional sports.
Positive changes in professional sports in the 21st century through blockchain and tokenization
Blockchain, as the foundation of various cryptocurrencies, offers the possibility of tokenization. Assets that are otherwise difficult to trade can be tokenized via the blockchain These are a digital representation of the value and can thus be shared as tokens. Inclusion is encouraged, as even investors with a small budget have the opportunity to invest and benefit from real estate or art assets. These are objects of value in which they would otherwise not find an investment opportunity. Especially the top sports of the 21st century, represents an excellent ecosystem.
Tokenization can be used to establish various rights:
- Property rights
Contractual rights, for example in insurance
Rights to payment
Tokenization offers a wide field of possible applications. In top-level sports, it can simplify the access of fans and sponsors to individual athletes or clubs. Fan proximity grows significantly.
Professional sports as an ecosystem
Professional sports represent an ecosystem with fans at its center. Around them are athletes, teams, leagues, sponsors, shareholders, and the media. All these groups have different interests and goals that do not always conform to each other. Here, tokenization can bring a number of advantages to reconcile these interests. Conflicts of interest can also arise within sports and the various leagues. All parties involved, the fans and sponsors as well as the clubs and the media, can derive their benefits from tokenization. Conflicts of interest can be avoided and eliminated in advance, as all contractual rights and obligations are recorded on the chain in an audit-proof manner.
Avoiding conflicts and exploiting advantages with tokenization
In top-level sport as a complex system, it is hardly possible to completely eliminate conflicts. Tokenization can be used in the financial and non-financial areas so that as many fans as possible, as well as sponsors and media, have access. Tokenization can be used to establish rights over varying lengths of time.
In the short term, over a period of one to two years, fans, sponsors and other investors can purchase tokens. The more tokens a fan purchases, the more voting rights they get and their influence increases. Large fans thus have more say, as they stand up for the club’s well-being and have a great interest in it. Voting can be done via app. This is easy to implement and is possible for every participant without any effort. Fans and clubs are brought closer through tokenization and club loyalty increases. FC Barcelona is already an example of this. It sold fan tokens through the crypto exchange Binance and earned a million dollars within two hours. Fans of Juventus Turin are allowed to use the tokens they purchase to vote for which song is played when a goal is scored. Other clubs like BVB are also negotiating and piloting such mechanics. The market continues to grow. Professional sports are also adapting to it and using the new opportunities to their advantage.
Minimizing financial default risk
Clubs no longer rely only on large companies as sponsors and can minimize financial default risk with tokenization. For example, individuals and smaller companies can also purchase tokens, use the tokens to sponsor players and act as sponsors. Blockchain technology is also supported by FC Bayern-Munich. Fans can become more attached to a club with tokenization and be much closer to their idols. They are a sponsor. Since many fans can already invest small amounts, new opportunities arise for clubs. Taken together, large sums of money then come together in a financing round. The money can be used to finance sports facilities, support associations and promote young talent. Smaller clubs have a strong community and great support from fans. However, they often do not have the sponsors needed to finance the right equipment or sports environment.
The blockchain offers the advantage that everything is digitally traceable. The data cannot be changed, and is always verifiably genuine.
In summary, tokenization improves fan loyalty, the liquidity of the club, democracy and the group feeling with a forward-looking technology on the chain.