CAN BLOCKCHAIN INFLUENCE THE SPORTS INDUSTRY?
Blockchain technology is being integrated into business processes to help bring another level of trust and transparency across global industries. Blockchain is transforming a multitude of sectors including the financial, insurance, healthcare, shipping, supply chain, logistics, and energy. Only recently have blockchain companies started to bring this disruptive technology to the sports industry.
Companies like Jetcoin, Globatalent, and Sportyco are founded on smart contracts - a layer of technology ushered in by the advent of blockchain technology - that allows interested parties to invest in the future earnings of the athlete. This will help young athletes access funding at earlier stages and possibly reach professional levels earlier on in their career. Investors will also have access to a much wider range of investment opportunities that were previously inaccessible. It is an interesting strategy that will begin to play out this year.
Some athletes have even started receiving payments in blockchain cryptocurrencies. Nikolay Rosenthal, one of the Rungsted Seier Capital (DK) star players, has switched his traditional salary payouts exclusively to bitcoin, the world’s first cryptocurrency. This switch was a part of a deal late last year when the team’s financial backer was taken over by Bitcoin Suisse, a bitcoin broker from Switzerland.
Blockchain’s smart contracts build in automation - so when conditions of the contract are met, the athlete’s payment will be automatically released and recorded on a blockchain which gives total trust and transparency to all stakeholders involved in the transaction.
Todd Byrne, a former pro-rugby athlete with the NRL, thinks this is the type of automation can alleviate many legal disputes in the sports industry. Especially when it comes to contract grey areas between athletes and third-party endorsements. In this article with coindesk, Byrne explains that athletes sign third-party endorsement agreements for extra income. These sponsors not affiliated with the team, and the resulting contracts have a tendency to go south when there are disagreements over whether or not the terms of the contract have been met.
Introducing self-executing, blockchain enabled smart contracts to the sports industry will help to reduce these pain points, and introduce another level of trust and transparency into the industry.
At STG we are passionate about the issues Todd Byrne illuminated, and intend to collaborate with the industry to engineer blockchain solutions that will transform the sports industry.