Web3 and Sports
How fans, athletes and leagues can have enhanced experiences with the communities, players and organizations they love
Preface
As a kid, and throughout my life, the world of sports have been an absolute passion of mine. Growing up in the suburbs of Philadelphia it’s a genuine hereditary trait to have a diehard love for the local teams. Not only have I been a fan, but I feel most alive to this day in my 30’s when I am on a field, court, pitch, pool or arena dedicated to playing a game with a group, or my toughest competitor, my mind.
Nothing got me more jazzed up in my youth than watching my Eagles on a Sunday with my family on TV or having the privilege to go to a game in person… despite all the colorful language that was shared in Veterans Stadium. During the week I would go to the local game store to buy basketball and baseball cards hoping to find my favorite players cards or rare collectibles. Hundreds of thousands of hours of were spent playing video games like Madden, NBA 2K and MLB The Show. The only books I could read were player or coach biographies and I must have watched every NFL Films special there was a thousand times before my family got sick of them.
All of my free time revolved around sports, the players, the teams, the leagues, their stories and how I could someday become a champion like them too. A lot of those interests still hold for me today. Now with the revolution of Web3 technologies I am happy to share that we have the ability to feel closer and connected to the players and sports communities that I love with more of a global reach.
It’s never been so fun to be part of this space, which makes me feel like a kid once again.
Web3 Defined
To keep the definition short, Web3 opens a new paradigm shift where users can own the assets connected to their digital lives and communities. A prime example in how we interact with the internet in Web2 (today) vs. Web3:
With Facebook, Twitter, and YouTube you invite your friends to participate, you generate content together, and the platforms make money. With Web3 you invite your friends to participate, you generate content together, and you all make money.
“[Web3] is an internet owned by users and builders, orchestrated by tokens” - Chris Dixon, a16z.
Web3 value adds include:
- Owning and controlling your stuff (data, assets, credentials)
- Transparent records
- Borderless networks of entities large and small
- Distributed computing and storage to prevent censorship and keep systems and applications running
- Taking control and influence back from large platforms that emerged in the Web 2.0 era (ex: FAANG)
This new model of the web has the power to connect fans, athletes, players, clubs, leagues more seamlessly, and vice versa, without the need for unnecessary third parties standing in the way around the world. The following are examples of how this works for fans, players and teams.
For more of a technical explanation on Web3 read here.
Web3 for Sports Fans
Twenty years ago I would have to go to a trading card shop, a video game store, buy a TV and pay for a game ticket on the phone if I wanted to interact with my favorite teams with third parties. Now with Web3, I can prove my fandom to the open web, trade player cards/videos wherever I am, and pay the players and teams I love directly. Along with having a say in managerial decisions my club is looking to decide on.
Fan Clubs: No more are the days where I have to share my support for my teams and players by just liking their Instagram page, nor just tweeting to prove my fandom. I can prove that I am one of Neymar’s most loyal fans by posting it on the decentralized web via Socios' Fan Token Network which gives more of the profit directly to him than this agent, team or brokers. By buying this token, I have an NFT vouching for me as an exclusive member of Neymar’s fan club. I now have the power to refer to the blockchain to show how early I started declaring my fandom of Neymar, and through this fan club, I can be exposed to private events that only token holders of the Neymar NFT get access to. Other Examples: TSM eSports on FTX,
Digital Trading Cards: Having the cardboard copy of my player was cool, but now I can have the rights and IP to the video highlights and digital player cards of my favorite players on the internet such as Allen Iverson via NBA Top Shot. Other Examples: NFL AllDay, MLB Topps NFT Collection
Decision-Making Fan Tokens: Prior to Web3, I could only play general manager or coach with the virtual versions of my favorite teams and players in video games like as FIFA or Madden, but Web3 enables us to impact real-life player and team decision making processes through our digital world. For example this past summer, Bloomberg reported that soccer superstar Lionel Messi may have made his decision to sign with Paris Saint-Germain in France due to spike in the PSG Fan Token value that netted nearly $30M in total leading up to his decision. That’s fans the power to sway decisions when it comes to contracts or maybe even who starts a game.
Platforms such as sorare.com enable you to not only collect player cards, but you can build strategies, create lineups and earn points based on your players’ real-life performances. The company has mentioned goals of eventually taking the data analytics from these real-life performances to put together enough data to compile their own team in a home country that is to be voted on by the sorare.com community.
Do you have dreams of owning your own team? The KrauseHouseDAO community makes this a reality by allowing you and like-minded friends to own a part of an NBA franchise! May seem crazy, but as of December 2021 KrauseHouse has raised over $4.2M USD for their cause. Other Examples: SX Network for Sports Betting & Prediction Markets.
Web3 for Athletes
Many fans of sport can also be considered to be athletes in their own right, just on different stages. There is a marketplace for you and I to monetize off our ourselves too.
Exercise-to-Earn: Gone are the days of reaching 10K steps a day to end up with a $25 gift card or discounts on a protein bar a year. Web3 gives the opportunity for athletes to make serious profit from their output. Lympo is a company that connects your health data, converts that data into Lympo Market Tokens, that can either be put out to a marketplace to earn value or be traded for an NFT to exclusive events or games. Other Examples: dHealth Health-to-Earn, Embleema, Sweatcoin, Clinicoin, Patientory
Web3 for Professional & Collegiate Athletes
For athletes that can receive compensation for their performance, community engagement, name, image and likeness, Web3 becomes a big benefit. Sports agents are valuable partners when it comes to signing contracts, negotiating on behalf of players and signing them up for sponsorship deals early on in their careers when the players may not understand the landscape. However we are seeing more examples of athletes taking control of their negotiations and interacting directly with teams, sponsors and communities to vouch for their worth. Here is how they can 10x that effort in Web3:
Player Club Tokens: Just as fans can connect to Fan Clubs, players reap a huge benefit when it comes to offering these communities. Typically teams, agents or third parties will take a portion of profits to players for raising money for charity or for putting money towards things the player deems are valuable, but now players have the ability to control this. Cleveland Browns WR Jarvis Landry launched his own cryptocurrency ($JUICE) and Fan Club (Club80) where fans who hold a certain amount of tokens can hang out, playing video games, pay royalties and attend special events with Jarvis directly. More famously Tampa Bay Bucs TE Rob Gronkowski and Kansas City Chiefs QB Patrick Mahomes have created digital marketplaces to sell digital trading cards and highlights of themselves too. Other Examples: Paradigm Sports, Kobe KB24 NFT Project
Player Decision-Making Tokens: On Twitter I posed for Landry to get into metaverse-first experiences such as workout classes or post-game chat rooms with Landry that could be an interesting model for fans to engage with him beyond the game. A platform called Calaxy is helping fans already in this world to purchase athlete-specific tokens that give them access to exclusive content, one-on-one interactions or other tangible items authenticated via Web3.
Merchandise & Memorabilia Sales: The sports memorabilia market is valued at an estimated $5.4B, but it is riddled with examples of fakes, high fees and corrupt sales. Players now have a trusted marketplace in Web3 where both buyers and sellers can track the provenance of a product along with where it is going in distribution all tied to the blockchain. For example, Sacramento King’s G Buddy Hield sold an authentic game-worn jersey on the Ethereum blockchain where the proceeds went to help families suffering from Hurricane Dorian. To be fair, it is more complicated to tie NFTs to physical goods to validate authenticity, but it is much harder than doing it fully virtually with digital cards and videos.
Crypto-Based Contracts: If you believe digital money’s value will continue to go up, well then tokenizing or having your player contract go towards a cryptocurrency is a way to reap some of those benefits. Spencer Dinwiddie was the first player in the NBA to tokenize his contract extension with the Brooklyn Nets in 2019 opening up accredited crypto investors to pay for shares of his contract and that he could decide what crypto to invest in with his token. A potential example was floated around in 2019 that Dinwiddie may have plan to sell a Brooklyn penthouse as an investment property on a Web3 marketplace to his token holders one day too.
Typically though we are seeing more players asking for their contracts to either be paid out specifically in Bitcoin or Ethereum these days such as Los Angeles Rams WR Odell Beckham Jr., Jacksonville Jaguars QB Trevor Lawrence and Detroit Pistons PG Cade Cunningham.
Web3 for Teams, Clubs and Leagues
Brands and memories associated to teams, clubs and leagues are highly valuable to both fans and players alike. Being part of a team or league community in Web3 can make someone feel inspired and more connected to that entity. Not only can you sell collectibles and merchandise to customers in your own borders, but Web3 allows you to seamless connect to sports fans across the world that you may not have been able to reach before due to IP and patent laws that were in the way before.
Team Club Tokens: Feeling as if you are part of the team and brand have been a staple for sports teams when it comes to sales and some have already dipped their toe into these waters. Back in 2017-18 the Dallas Mavericks allowed fans to purchase tickets to games with Bitcoin and Ethereum through the team club token. The Cleveland Cavaliers created a similar partnership with UnitedCoin to be used by fans as a way to play sponsored games and to earn prizes. Along with allowing fans or people connected to DAOs be a part of making unified team decisions in the future.
Merchandise and Memorabilia Sales: Similarly to players, teams and leagues have valuable merch associated to their brand. For example the Boston Celtics recently sold their championship banners as NFTs via the OpenSea platform as part of their Celtics Heritage Collection.
Conclusion
Despite all of the craze and the big money being transacted across the Web3 marketplace, we are still very early in this space. Just as mobile revolutionized the way we interacted with laptops and tablets, Web3 incentives and the marketplaces we are creating pose numerous amounts of opportunity that are sure to be discovered in the future.
I am excited for what this world has to offer and I encourage everyone to try out these concepts so they may become the next entrepreneur to expand the world of Web3 and sports.
Additional Resources:
Me: Unlocking The Modern Athlete Marketplace
Gemini: Major League Sports and NFT Collectibles
ConsenSys: Blockchain for Sports and eSports
Adweek: Sports Organizations Are Scrambling to Get In on the NFT Craze