Cryptocurrency and blockchain technology is poised to disrupt the sports industry, but will it be for better or worse? Some worry that cryptocurrencies like Bitcoin could replace traditional sponsorships. Others argue that cryptocurrency has a long way to go before its impact on sporting events can be measured accurately.
In a world where billions of dollars are lost each year to traditional sports, crypto could be the answer. In this article we analyze which leagues and teams have an opportunity for success with blockchain-powered games.
The “crypto and sports a marriage made in we’ll we ‘ll see” is that cryptocurrencies are the future of sports. They can be used for betting, ticketing, and more. Sports leagues will need to take note.
DigitalBits Foundation’s Managing Director, Daniele Mensi
We’ve seen how NFTs and cryptocurrencies have made inroads into art, music, entertainment, and, most recently, sports. Top leading brands are utilizing digital assets, such as NFTs and branded-currencies, to create new channels of interaction in a time when the connection between sports fans and their favorite teams has fundamentally altered. Blockchain-based digital assets (BBDA) are quickly becoming one of the most important aspects of sports clubs’ long-term viability.
Through the epidemic, sports teams’ and fans’ relationships have radically transformed.
The continuing pandemic’s effects have been felt by many people throughout the globe over the last two years. Almost every company on the world was affected, and many were compelled to make severe adjustments in order to remain safe and sustainable. In terms of income, professional sports leagues and their clubs were among the most impacted businesses. The loss of all game-day ticket and merchandising profits, as well as a significant effect on broadcast income, were the primary causes of their problems. For the world’s premier leagues, the majority of the improvements were simple. The plan called for isolating the players and keeping them in a bubble for the rest of the season while maintaining a strict testing schedule.
While this strategy worked well for other sports, the nature of international soccer presented issues that American leagues did not encounter. Most teams compete in a variety of events that transcend their continent and draw a large audience from mainland China, India, and the Middle East, as well as Europe and the Americas. The pandemic’s troubles were drastically exacerbated by the need for worldwide travel. According to UEFA, Europe’s top-tier teams are expected to lose more than $8 billion in 2020 and 2021 when Covid interrupted their seasons, putting a stop to a long era of consistent financial development. This is mostly owing to European teams’ ability to extend outside their own continent, a feature that is uncommon in North American businesses.
Matchdays are another important aspect of international soccer that is sometimes disregarded. The amount of enthusiasm and zeal shown by supporters is ingrained in local tradition, and some fans had never missed a game before the outbreak. When something so vital to so many people went dark, teams faced a new challenge: how to keep their fans engaged and connected.
Digital Assets and 21st-Century Sports Fans
Leagues and teams have found that integrating the usage of digital assets has been a highly successful and disruptive technique for increasing fan involvement during COVID. A handful of blockchain-based companies have made significant inroads into mainstream sports in the last year. The MLB, UFC, Formula One, and NBA have all formed significant blockchain-based agreements.
With diverse collaborations of their own, Europe’s largest soccer teams have also joined this mass-adoption process, albeit with some significant variations. International soccer clubs have greater flexibility in terms of how they might exploit partnerships due to variances in league structure. With clubs completely adopting the blockchain to battle financial difficulties, the adoption of fan tokens and digital collectibles like NFTs has increased. Fans wanted a piece of the action and to feel like they were contributing to their beloved team even if they weren’t permitted inside the stadium. Fan tokens have progressed to more product-based partnerships that require a higher degree of fan interaction, such as redeeming an experience with a proof-of-attendance NFT.
The growth of fan tokens as a result of these creative collaborations enables fans who own their team’s BBDA to have more in-depth engagement with the club. Some fan tokens allow users to vote on things like what music is played when a goal is scored or what photo is posted on the team’s social media account after a victory.
Investing in Blockchain
As crypto partnerships seem to be taking over the top five leagues, they are not without their detractors, mostly because we are still talking about a new asset class that is now aiming for mainstream acceptance in a way that has never been done before. We also need to keep informing people about the value of NFTs and how to buy and sell BBDAs on decentralized platforms using digital wallets and other technologies that they may not be acquainted with.
Regardless, sports organizations’ participation in the blockchain community extends well beyond the issuance of fan tokens or NFTs. Some clubs are taking their blockchain initiatives a step further by accepting crypto payments for tickets and products, as well as proposing to pay wages in digital currency to staff and players. The financial incentives associated with these collaborations also allow clubs to recuperate some of the recent economic streams that were lost due to the epidemic. According to a Bloomberg article, Europe’s best teams have earned more than $200 million in fan token earnings in addition to their sponsorship responsibilities. Argentina’s Lionel Messi, perhaps one of the world’s most famous players, was even paid a percentage of his signing price in fan tokens, demonstrating the value of crypto-financial collaboration.
There is no end in sight for crypto and sports to coexist.
Despite the negative press and dangers connected with crypto and blockchain collaborations in sports, clubs and leagues have barely scratched the surface of how blockchain technology and cryptocurrencies may be used to boost fan engagement and promote the sport’s development. We’re not likely to see bitcoin depart the field very soon, especially with additional leagues considering a possible ban on gambling sponsorships.
The “crypto companies sports sponsorship” is a question that has been raised in the crypto community. Could cryptos be used to save sports leagues?
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