The advent of blockchain technology in the sports industry will introduce innovative applications that can transform the entire industry.
Every year, the hype surrounding the Super Bowl can be witnessed all over the US. Super Bowl is a major sports event that is all about celebrities, half-time performances, and action-packed football games. Events like these exhibit that the sports industry as a successful business that generates high revenue from ticket sales, promotions, concession sales, and merchandise. Reports suggest that the estimated size of the global sports industry is worth $1.3 trillion. However, sports revenues are facing a negative impact as fans that attend major sports games are decreasing in number. Several fans can now stream games live on their smartphones. Additionally, eSports are gaining popularity among multiple sports fans, which can be a potential competitor to the sports industry. The advent of blockchain technology in the sports industry can address various challenges such as ticket scalping and drug testing management and improving fan engagement. Various blockchain-based startups are entering the sports market with innovative use cases and services. With the help of blockchain technology in the sports industry, sports clubs can also simplify athlete data analysis and handle sponsorships more effectively.
Blockchain Technology in the Sports Industry
The introduction of blockchain technology in the sports industry will impact the industry sector in the following ways:
Sports sponsorships are one of the most effective ways for athletes and sports clubs to generate revenue. Also, brands use sponsorships to gain popularity. Brands spend hundreds of millions of dollars on sponsorships. In the 2018 soccer World Cup, brands were spending up to $200 million for a sponsorship package. Managing such large amounts can be complicated for sports clubs and brands. Brands and sports organizations can carry out their transactions using a blockchain-enabled decentralized ledger. With the advent of blockchain technology in the sports industry, brands and sports clubs can maintain precise logs of all transactions. Also, sponsorships can be handled using cryptocurrency. Several sports legends have shown interest in blockchain and cryptocurrency. Such athletes and many more might be interested in receiving payments using cryptocurrency.
Reduce Ticket Scalping
Ticket scalping or illegal resale of tickets is a major issue faced by sports organizations. Several sports fans are scammed due to ticket resale. According to a study, 21% of millennials have been victims of a scam while purchasing tickets online. Additionally, over 36.3% people who participated in the study were willing to pay more than double the face value of football playoff tickets. Hence, sports fans may find online ticket purchases increasingly unreliable.
The implementation of blockchain technology in the sports industry can give rise to smart ticket platforms. Smart ticket platforms can track and display the chain of custody of every ticket to buyers. Such records cannot be externally altered and any change will be documented accurately to ensure the integrity of data. With this approach, fans can verify that their tickets are genuine. Also, smart ticket platforms can set restrictions where buyers can only purchase a certain number of tickets at a time. This technique can effectively reduce the impact of bots and scammers that buy large volumes of tickets for resale.
Secure Performance Data
Sports clubs and organizations collect vast volumes of athlete data for performance analysis. Using athlete analysis, sports managers evaluate athlete performance and identify their strengths and weaknesses. Also, athletes can now utilize wearables and IoT sensors that can be installed in fabrics and insoles. These smart devices can collect more precise data during athlete training. Such data can further increase the storage and security requirements. Managing, collecting, and sharing detailed athlete data can get extremely complicated. The adoption of blockchain technology in the sports industry can simplify athlete data collection and sharing. With the help of blockchain-based decentralized network, sports managers can store each athlete’s data securely. Such data can be shared with trainers, coaches, sports managers, and athletes themselves. By leveraging blockchain technology, athlete data can be protected from potential data breaches and duplication. Sports clubs can implement authorization and authentication to restrict data access to unauthorized users and verify the identity of users. Hence, blockchain can offer a secure data storage and sharing medium.
Enhance Fantasy Sports
Fantasy sports leagues are an entertaining way to engage with sports fans globally. The buzz created by fantasy sports helps generate millions of dollars’ worth of revenue. According to reports, the daily fantasy sports industry generated a total revenue worth $335 million in the fiscal year of 2017-2018. The fantasy sports industry is worth more than $7.22 billion including funds spent on draft parties, fantasy-related memorabilia, and food deliveries. However, securing payments from fans isn’t an easy task. Several fans may put off paying until weeks into a season. Then, they might realize that their team isn’t performing well and stop playing altogether. The advent of blockchain technology in the sports industry can introduce decentralized fantasy sports platforms. By leveraging a blockchain-based platform, fantasy sports organizations can ensure that sports teams are unlocked only after fans have paid all their dues. Fantasy sports leagues can also utilize decentralized tokens for teams and players. Fans can purchase other teams and players by exchanging tokens.
Improve Drug Testing
Doping incidents in sports have been making headlines since 1970s. Athletes have been using performance-enhancing drugs such as anabolic steroids, human growth hormones, stimulants, and diuretics. Hence, sports organizations have created stringent regulations to stop doping incidents. For this purpose, sports organizations conduct regular drug testing to find performance-enhancing drugs. In case athletes get caught with performance-enhancing drugs, they get banned from the tournament. However, drug testing, handling, and storage of samples and data can be extremely complicated. There have been incidents where athletes have doubted testing procedures and the generated results. Such situations can create confusion among sports organizations and athletes. Private blockchain networks can record data collected from all stages of drug testing. Blockchain-based record management systems can track prescriptions and test results of all athletes along with data encryption. Hence, the data stored in blockchain networks cannot be altered. With this approach, blockchain-based record management systems can offer precise evidence in doping cases. Therefore, the adoption of blockchain technology in the sports industry can simplify drug testing procedures.
Incentivize Fan Interaction
Sports clubs and brands constantly launch campaigns to improve fan interaction. Fans post pictures of games on social networks to support their favorite teams. Sports clubs can reward fans for their support to improve fan engagement and attract more supporters for their club. Sports clubs can offer blockchain-based tokens to fans for sharing and liking content on social media and attending certain number of games in a row. Fans can exchange these tokens for exclusive club merchandise and free tickets. With this approach, sports clubs can create loyalty programs for their fans. Also, sports clubs can offer exclusive news, player interviews, behind-the-scenes footage from games, and team analytics to their loyal fans.
Simplify Sports Broadcasting Rights Management
Sports broadcasting rights is one of the largest components of the sports industry. According to reports, sports media rights are expected to acquire total revenue worth $23.8 billion in 2022 just in North America. One can only imagine the revenue generated by sports media rights across US. Sports broadcasters pay billions of dollars to broadcast major sports leagues on their channels. With the help of blockchain technology in the sports industry, broadcasting networks can track the rights that they have licensed. Also, broadcasters can utilize blockchain-powered digital identification to generate a unique ID for every owner of broadcasting rights to avoid any chances of confusion. Besides, blockchain-powered smart contracts can enable automated payments to renew broadcasting licenses.
The utilization of blockchain technology in the sports industry will help explore new possibilities in sports management. With the help of blockchain, sports fans can invest in upcoming athletes and underfunded sports organizations. These fans can gain high returns after the athletes or sports organizations generate high revenue.