Fan Tokens Could Be the Next Big Thing in Sports
Fan Tokens Are A Form Of Cryptocurrency
For sports fans, the prospect of receiving rewards in return for owning fan tokens is enticing. While the crypto market is highly volatile, and investing in crypto assets has been considered a risky strategy, this innovation is becoming a part of modern culture.
One major reason for this is that fan tokens allow sports fans to interact directly with their favorite teams, making them a part of an exclusive community. In simple terms, the more FTs a person owns, the greater their influence over the team and the greater their potential for earning rewards.
The first sports team to introduce a fan token was Paris Saint-Germain, a French soccer club. The club currently holds over $440 million worth of fan tokens. In addition, the club may continue diluting its supply indefinitely.
In less encouraging news, however, the NFL recently approved changes to its blockchain rules. Unfortunately, however, it did not approve the promotion of blockchain fan tokens. Thankfully, this does not mean the NFL is not open to these new technologies.
Chiliz, the self-acclaimed world’s leading blockchain fintech provider for sports & entertainment, has struck a partnership with the National Football League (NFL) and the National Basketball Association (NBA). In addition, Chiliz has also struck a deal with the Ultimate Fighting Championship (UFC).
The use of these cryptocurrency-based sports clubs may ultimately lead to a new paradigm for the valuation of sports teams. Moreover, the concept of fan tokens is in line with the macro trends in the sports industry.
Enhanced Sports Fans' Participation
With fan tokens, soccer fans can participate in specially designed activities, such as voting on in-stadium music and social media designs. Each sports club has its specific ideas for fan engagement, but generally, they involve a voting process. For example, FC Barcelona recently asked fans to vote on which artwork they wanted on the club's changing room.
The competition winner received an exclusive Q&A session with the head coach. Similarly, fans of Juventus FC were also able to vote on a new soccer kit, which the club subsequently released. Besides voting, fans can also participate in events sponsored by their favorite football club. One such initiative is the FC Barcelona fan mural competition.
In this competition, fans get to submit their designs, and the four chosen designs will be displayed in the club's changing rooms before matches. In addition, fans can vote for their favorite design, and the winning team's players will see it before every match. The winning team will also receive a trophy for their efforts.
For die-hard sports enthusiasts, fan tokens empower them to get closer to their favorite team or sport. In addition, tokens allow fans to participate in unique activities. This includes participating in fantasy sports, meeting their favorite athlete, and getting exclusive VIP access to special events.
With fan tokens, sports fans can also participate in the lives of their favorite stars in ways previously impossible. And they can be part of an exclusive community, access exclusive activities, and even vote for the team's future.
Exchange FP For Merchandise, VIP Experiences, And More
The idea behind a token fan program is simple. It allows fans to purchase exclusive experiences, such as tickets and VIP experiences, in exchange for their tokens. However, fans exchange the tokens for branded merchandise and other items rather than giving away tickets. These 'fan tokens' can be used at any sporting event, and they are interchangeable. As a result, fans can save money while maintaining a tight connection to their favorite team.
Tokens are issued through a Fan Token Offering (FTO). During the FT, the supply and demand forces are balanced. Therefore, fans need to monitor upcoming fan token announcements to keep up with the latest developments in the industry.
This way, they can purchase fan tokens as early as possible - and when they do, they can exchange their tokens for various items, including exclusive merchandise, VIP experiences, and more. Several leading sports entities have already introduced fan tokens to reward loyal fans. These include several football clubs, MMA supergiant UFC, racing leaders, and esports teams.
Blockchain provider Chiliz is a major player in these new ventures. It recently announced a $50 million investment for its expansion plans in the US. Apart from the huge commercial prospects, these new initiatives also create new opportunities for fans to connect with their favorite team members and athletes.
Changing the Narrative
Fan tokens have demonstrated an immense power to disrupt the top-down narrative in sports by empowering fans with a voice. The UFC is one example. In partnership with Socios, they offer token holders the opportunity to have a say on the way their team plays. This allows fans to interact with their favorite players in media releases and make their opinions known. As a result, an entire sports league will see a spike in engagement from fans who can participate in voting, answering questions, and even interacting with the players themselves.
With soccer's declining revenue in recent years alongside a coronavirus pandemic, major soccer clubs have also joined the trend by issuing fan tokens. In this case, the coins allow fans to participate in team decisions, such as who starts a game. However, the tokens have also divided supporters. While some have embraced this new form of engagement, others dismiss them as a shallow and merely tangential way to get involved. The debate continues, and the future of Fan Tokens in football remains uncertain.
Revenue Generation For Teams
In a future where football is no longer the only sport dominated by sponsors, fan tokens are poised to play a crucial role in the industry. Leading professionals in the industry predict that these new forms of fan engagement will generate a significant portion of revenue for teams in the next five years. They would do this simply by enhancing fans' direct participation.
The Sports Sponsorship Barometer 2021 demonstrates the significance of fan tokens in the future of the sport. However, the rise of fan tokens has sparked considerable criticism. Some fan groups view them as an attempt by major clubs to monetize their fan base.
The Football Supporters Europe group recently tagged Uefa's decision to partner with Socios as appalling. It accused the organization of exposing its supporters to crypto-mercenaries. However, Dreyfus believes fan tokens are about recognition and influence, not money.
While fan tokens are an excellent idea, the structure and usage of this new type of revenue are far from perfect. As long as there are no glaring flaws, this new form of fan engagement could be an effective tool to help sports teams generate revenue. However, the structure is not without its problems. While fan tokens offer a scalable version of the DAO, there are significant challenges. The primary concern is that fan tokens are merely a partial solution to a large problem.
Fan Tokens and the Role of Sports Brands
Socios is currently championing the Fan Token revolution. It is a Malta-based company focused on sports and esports. Socios is powered by Chiliz, a blockchain-based company that powers the Socios platform.
The company has been a major partner of many new sports and gaming entities. It has already partnered with clubs in France, Italy, Germany, Belgium, Switzerland, and Spain. For example, through Socios, fans of football clubs can acquire voting rights on different aspects of club governance.
Driving its FT scaling ambitions, Socios recently signed a partnership with the New England Revolution and the NFL's New York Jets, alongside its existing partnerships with the Indian Premier League cricket franchise and the NBA.
Socios's strategy has already made headlines in the US and Europe. Moreover, those deals may come to have a huge impact on sporting bottom lines. In addition to sports teams, fan tokens could also disrupt the top-down narrative in major sporting events, such as the Olympic Games and even the FIFA World Cup.
