Blockchain Applications: Sports and eSports

Post-COVID Football: Is It a Completely New Scenario?

“Diego used to say that in certain moments he saw his opponents as if they were playing in slow motion, so for him, it was easy to anticipate their movements and jump over them.” A teammate of Maradona on the goal against the English in 1986.

Three months of stoppage, a unique event in the world of football. A restart with empty stadiums. How to restart after this block? By leveraging the potential of blockchain technology. The good news? Affidaty had already taken this into consideration and applied it in the App_y application.

Let’s be clear: the business revolving around football already showed signs of heading towards saturation. First and foremost, it is now clear to everyone (fans and industry professionals) that the struggle of the big clubs for the top takes place not only on the field of play but also in terms of revenue.

Having conquered the territory of TV rights, the top clubs have gone further, the more virtuous ones first, the others because this territory had become insufficient to guarantee the desired growth.

TV rights were the gold mine of the 90s; a mine that time has shown needed to be managed: those who rested on TV rights today are clinging to them.

In this context, the struggle has intensified towards the other two macro-areas of income: matchday revenue and, mainly, commercial revenue. A very intense struggle in a limited territory nonetheless. In this scenario, we are convinced that blockchain technology can provide a new territory to analyze.

The idea

Let’s start by highlighting some useful starting elements to understand together how blockchain can have a positive impact on sports in general, and football in particular, by examining some problems that can be transformed into opportunities:

• Great difficulty for teams in finding new methods to improve and increase revenue: the big ones are getting bigger, the smaller ones cannot emerge.
• There is a strong search for introducing new technologies into a system that is in great need of innovation. UEFA itself pushes for the introduction and testing of new technologies (example: VAR), which shows that there is an openness to their possible use.
• There are no longer football presidents with unlimited pockets, continuous team financing. Financial Fair Play is now law. Financial accounts must now comply with certain parameters. The search for new methods of financing is strong here, so much so that we often read about “Creative Finance” applied to sports.
• Today, clubs interact (minimally) with their fans through social media but cannot monetize them significantly, proportional to the type of team/sports structure.
• There is even a difficulty in interacting tangibly and profitably, especially with fans far from the place of origin of the team in question, for example, if they are in another nation or continent. Such interaction exists but has considerable room for improvement.
• We often witness problems in managing fans, both internally at the stadium and externally, such as with scalping cases. Conventional billing channels are exhausting their thrust. It does not mean that they are exhausted, but rather that their potential contributions to club growth are slowing down. This can apply to companies that currently have a dominant position and even more so for those trying to improve their revenue ranking from rear positions. The static is prevailing over the dynamic.

The post-COVID19 scenario has undoubtedly contributed to putting further brakes on this front. Now, we ask ourselves: why stay and fight in the same arena instead of looking for new territories?

The question that arises at this point is: do they exist? Our answer: yes, they exist. And they are potentially immense: they are the new territories that blockchain technology opens up to us, with its multiple applications. Possibilities that we have developed through the App_y application.

Blockchain applications for football

1 – Profit enhancement

• Tokenization: a tool that can be used to generate new assets, allowing for a new form of ownership. Imagine making a fan a co-owner of certain initiatives, certain objects (for example, those belonging to club museums), but also certain sports rights through tokenization.
• Stadium: support actions for premium sales (boxes, personalized seats), even to convey special initiatives of various clubs, even at the architectural level (such as this initiative of Argentinos Juniors, which associated a special membership with members who contributed to financing a new sports center)
• Engagement: The issued tokens have unlimited fluidity. They could eventually move indifferently within the initiatives involving the team and its sponsors, a sort of unique currency that allows receiving prizes usable within the package of products and services offered by the football team and the sponsoring companies.
• Contest: prize contests designed to strengthen the club’s bond with its fans, but also to expand its brand: contests conceptually “geolocated” aimed at enhancing the image of a player who comes from the markets the club wants to penetrate.
• ICO: an alternative form of financing. Have you ever heard a fan (or said as a fan): “Let’s organize a fundraiser, a donation…” to allow the club to obtain resources to buy a certain top player? Until now, this could indirectly happen: by spending on match-day activities (subscriptions, tickets) or commercial activities (merchandising, etc…) or through financial instruments, in the more advanced cases, for which, however, one must go through channels not immediately accessible to everyone (purchase of bonds, purchase of shares); not to mention that often these resources cannot be directed where the fan would like. What if instead this happened through an ICO studied on the specific market operation?

2 – Cost reduction

• Transaction: managing and automating the numerous transactions, the financial flows deriving from the activities of clubs in blockchain would allow for great savings.
• Player trading/contracts: managing all aspects deriving from negotiations and contracts with players. Think of the savings of resources regarding, for example, the implementation of the various clauses present in contracts. Smart contracts can carry out everything automatically, recording every movement within the blockchain, making it unchangeable and quickly accessible to the parties involved.
• Ticketing: from the reduction/elimination of physical support (printing tickets, their delivery, management, etc…) to the integrable elements at the security level, putting together the guarantee of buyers’ privacy with the club’s need for control.
• Salaries in coins: a type of operation that would financially bring immediate benefits to the club and potential further benefits to those – from players to other employees – who accepted a team coin; and if it were also a way to maximize commitment?

3 – Blockchain Applications in Football: Boosting Esports. Welcome to the Future

“Synchronize your watches. The future’s coming back…” (Quote from Back to the Future, Part II)

3 – Blockchain Applications in Football: Boosting Esports. Welcome to the Future

“Synchronize your watches. The future’s coming back…” (Quote from Back to the Future, Part II)

The world of esports is constantly growing. And although football simulators currently represent only a portion of this new universe, major clubs worldwide have already started to make inroads, realizing its potential (this awareness has also been accelerated by the context imposed by the health emergency). In addition to clubs, other actors related to the world of football, such as journalism or the betting industry, are also involved.

Sponsors, on the other hand, had already shown great sensitivity to the potential of this new business area, which targets a cross-sectional audience compared to the “classic” football audience:

• Involves new generations
• Involves segments of the population not necessarily linked to the passion for football itself, but more to gaming than football itself
• Presents potentially zero geographical constraints (excluding the digital divide, which is also present regarding the consumption of “real-life” sports)
• And finally: if cutting-edge football clubs are increasingly rethinking themselves as “entertainment companies,” who says they won’t expand their brands into esports beyond just football simulators in the future?

The challenge

And so, here’s what may seem like a provocation: if we already know the story in advance, why not retrace it entirely, knowing in advance where to move, and do it now? Player trading, ticketing, journalism, betting… all aspects related to football or part of it. Why shouldn’t they be part of esports too? The blockchain can be the vehicle, the most suitable one for managing an immaterial world that will involve the movement of millions and millions of data (and money); who will take up the challenge? Who wants to be the first entrant? The technology already exists, it only takes that dose of courage and madness typical of great enterprises.

There will be someone who will say “why not?”

Others will be left with “how didn’t I think of that myself?”