The Interesting Combination Of Sports And Crypto
One of the sectors that moved into crypto in 2020 and 2021 was the sports industry. You might be thinking Esports or entertainment gaming, but this is actually mainstream professional sports. Both athletes and teams have made their entry into crypto, in very unexpected ways. It was not just in terms of endorsements for a coin or token, but actual holding of the digital asset. While acceptance from the traditional finance sector would be the least expected, it would be more acceptable with professional sports.
This combination is sending shockwaves across the world. Imagine seeing your favorite sports venue with the name of a cryptocurrency exchange. Think about your favorite athlete accepting their salary in cryptocurrency without objection. Now, how about the chance of owning your team’s very own token in the form of NFTs (Non-Fungible Tokens)? This is what has been happening, and it is not behind the scenes but out there for the public to see.
FTX And Crypto.com
The Miami Heat, a professional basketball team from the US NBA league, has entered into a partnership with crypto exchange FTX. In their agreement, the home arena where the Heat plays their games was renamed to FTX Arena starting in the 2021–22 season. FTX has emerged as a major player in the crypto industry, with success in digital exchanges.
Following the FTX/Miami Heat partnership, another crypto exchange, Crypto.com, made waves when it made a deal with the Staples Center. This is the home of the Los Angeles Lakers. In that deal, which is worth $700 Million for 20 years, the arena will be named Crypto.com Arena. This has received some backlash, but for the most part, it is a done deal.
Whether this is a trend or not, it shows that crypto exchanges have clout. Binance and Coinbase are other large exchanges, but they have not made any such partnerships yet (as of December 2021). FTX and Crypto.com are showing their influence, and this is gaining them more exposure that is good for their business. It also brings crypto towards the mainstream since sports have a large audience that is also global.
Pay Me In Crypto!
Several popular athletes have begun accepting or partially accepting crypto as payment. This includes Aaron Rogers, Odell Beckham Jr., Russell Okung, Sean Culkin, and the Sacramento Kings. Other athletes like Trevor Lawrence and Saquon Barkley have made endorsement deals to accept crypto as payment. The most accepted form of crypto payment is in Bitcoin.
Athletes are realizing the value of the top crypto asset, but we don’t know for sure if they fully understand crypto. Even if that is the case, this is an opportunity for those who pay in crypto to explain not only its value but also its fundamentals. It goes beyond being a currency but an investment for storing wealth and a technology for sending money.
Fan Tokens And Collectibles
The 2020’s signal the age of the fan token. This is not a physical token with engravings or logos, but a digital token that comes with additional benefits to fans who own them. Their ownership is verified and secured through the blockchain as an NFT. This idea has gained momentum in the EU, among other places. One such token called Chiliz (CHZ) has issued fan tokens in partnerships with sports teams like F.C. Barcelona, Paris St. Germaine, and Juventus.
The Dallas Mavericks basketball team has also begun selling NFT collectibles through their website. These NFTs are explained by the Mavericks as “unique digital items with proven authenticity” on the blockchain. They have a giveaway of free NFTs in honor of veteran player Dirk Nowitzki. These are limited, thus giving them value over time. When issued as an NFT, it gives verified ownership that also proves the authenticity of the item.
For the developers, this is a good way to bring value to their token. Partnering with a big sports team or league can drive up sales of the token. For sports teams this means additional revenue streams that they can leverage for extra or premium benefits. Think of being able to reserve a special viewing section in an arena by using fan tokens. Other benefits could be access to special content or rewards for attending games.
They’re Shilling For Crypto
Some high profile athletes and sports personalities have also jumped onboard the crypto train. Superbowl champ Tom Brady holds Bitcoin. NBA champ Steph Curry has got into the NFT game. Mavericks owner Mark Cuban has been a supporter of Ethereum and DeFi (Decentralized Finance) protocols and even minted some NFTs. Tampa Bay Buccaneers tight end Rob Gronkowski and NASCAR driver Landon Cassill have teamed up with Voyager Digital. These partnerships are one way crypto can connect with a wider audience among the millions of sports fans.
It is not whether they are doing it for publicity, but if they really care about what they are endorsing or holding. It seems they do have more understanding than the average person to confidently get into crypto.
Synopsis
This is an interesting time to be both a sports fan and crypto holder. The combination comes at a time when crypto adoption is further increasing. This can open the floodgates to more ventures between fintechs and sports leagues. What is important is an understanding of crypto not as a speculative asset, but one that has utility. It can be used for fan rewards and benefits as well as rare collectibles for trading and selling. We will know for sure down the road, but just like the many use cases in crypto it will further evolve.
First Published In The Capital (1/6/22)
Disclaimer: This is not financial advice. The information provided is for reference and educational purposes only. DYOR always to verify any information.
