In the last few years, the sports industry has been going through transformations. The industry has embraced digital technologies among them cryptocurrencies and the whole blockchain space. This has seen the industry leverage on new revenue streams, increase its fan base, strengthen current partnerships and build new ones. Also, it is now possible for the fans to use tokens, allowing them to get exclusive rewards including special VIP treatment in several events.
With the tokens, fans are getting the kind of treatment that bookmakers around Europe give their users in terms of bonuses and offers when they join their platforms. All these capabilities are made possible due to the adoption of blockchain technologies and more so cryptocurrencies. It is a similar trend that has been adopted by betting platforms.A spot check on Germany betting sites indicates that the majority are accepting cryptocurrencies. Betting experts point out that ettors in Germany as well as in other countries which are quick to adopt new technologies will enjoy the benefits that are offered by cryptocurrencies in betting. With the adoption, it’s now possible to use Bitcoin to wager on matches as well as receive betting winnings through secure means.
Sports can get the same benefits that cryptocurrencies provide to the betting sector. In this article, we will be exploring how cryptocurrency and sports interact with a focus on how the industry benefits from crypto assets.
Increase their fandoms and revenue streams
The rise of digital fans and the events of 2020 led to a huge reduction in ticket revenue. This got the sports industry thinking and exploring alternative revenue streams. The industry also had to find creative ways through which fan engagement would be maintained as well as fight against sports fraud and corruption. This creates a new sphere for new players leading to tremendous changes. The introduction of Blockchain Technology has seen the industry take a new approach. It has been effectively assisting sports clubs to monetize their fan bases and strengthen their fandoms effortlessly.
Kate Richardson sees blockchain and the whole crypto space not as the future technology but a 21st phenomenon that should be utilized to its future potential and increase the benefits that sports can get in the era of digital transformation. Prominent clubs and teams are already leveraging the new technologies to unlock their fan bases, increase their revenues among other capabilities presented by the crypto world. Kate Richardson has extensively explored how clubs and teams can increase revenue using new technologies and has made a conclusion that failing to move with the tide only means missing out on the enormous opportunities that are presented by these developments. Her analysis on this and more issues as well as her profile can be accessed here.
Building better fan relationships
A new trend is emerging where crypto-projects are diving into sports sponsorship, from football, UFC, e-sports, and formula 1 among others we are seeing multi-million dollars crypto deals with teams and leagues. In 2021, the deals grew by more than 100% and according to Nielsen Sports, a sports data analytics company; they are expected to reach more than $6 billion in the next five years.
Cryptocurrency experts point out that major coins have largely grown out of attracting huge communities. There is a general understanding in the crypto sphere that a large community helps in marketing a project, attracting developers, helping in raising capital as well as pumping the coin through demand.
In the recent past, several deals have been signed between teams and crypto projects. One of the prominent partnerships is between Manchester United and Tezos, the two parties signed a branding deal worth $ 27 million per year. In the deal, Tezos brand will appear on Manchester United’s warm-up jerseys before matches.
This is not the only deal that Tezos has signed with a sporting entity; the Blockchain technology-based company is also sponsoring McLaren Racing. Manchester City has also announced a deal with OKX where the crypto project will have its brand at the Etihad and Academy stadia. This is the first time that OKX is entering into a sports sponsorship deal, a development that analysts say is an indication that cryptocurrency companies are seeing significant value in the sector.
Other cryptocurrencies sponsorship deals aimed at building a strong relationship with the sports industry include:
- FTX Trading crypto.com and Coinbase for the ad spot at Super Bowl LVI
- Renaming deal where LA lakers arena will be Crypto.com Arena
- UFC deal with Crypto.com that will see the cryptocurrency brand appealing in UFC apparel
- Binance co-sponsoring the African Cup of Nations in Cameroon
- Binance sponsorship of the Argentine Football Association
The intersection between sports and blockchain technology has yielded one of the most exciting innovations; the fan tokens. These are fully fungible tokens that allow the fans access and influence over some matters that their favorite clubs make. The tokens give the holder the right to vote on club affairs such as the selection of kits, the training grounds, or even the charity initiatives to engage in. It provides the fans with exclusive rewards and treatment similar to VIP access and treatment that are offered to premium memberships.
Although there has been an explosion of interest in cryptocurrency and the whole blockchain space, sporting clubs should be conscious of the risks that come with this development. Talk of volatility that has been experienced with cryptocurrency prices. People looking at how to invest in Cryptocurrency have been discouraged by the fall of prices. One instance has been the cryptocurrency Bitcoin price, it has on several occasions shed more than twenty percent of its value within two days, seriously lowering people’s wealth.
Also, the fact that the new space is largely unregulated requires caution while diving in. Lack of stability as another concern requires sports clubs to adopt arrangements with hedge funds that can help save money in case of serious fluctuation. However, despite these shortcomings, crypto-assets present sports entities with the opportunity that can help in growing the industry as well as shielding it from harsh environments that characterize the current global economic space.