The Opportunity of Ownership

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We are experiencing the advent or rather the presence or the manifestation of a new wave of technology, that is impacting everything in our lives.?

The reality is that, within the world of sports and entertainment, you can find the elements that move the core passion of the audience. You have music, that kind of elicit thoughts and feelings, from the past or even a longing towards the future. And any form of art for that matter. In sports is raw passion for the gregarious nature of what represents your community, your family, your traditions, through a sports team that competes.?

But, in this change of paradigm, in which technology has evolved rapidly, in the sports industry we find ourselves facing, very much unchartered or unknown territory. And in how we handle that, will be the result of the future of our own industry.?

When you look at the space of digital transformation, and look at the evolution of everything digital, you can now cluster the different movements of that space in what we can consider Web 1, which was the unidirectional engagement with the audience, mainly based on information, and a direct flow of what was happening being consumed one way by the audience. Then a couple of decades probably, or that least a decade and a half, we started to see how, what wasn't then known as social media, but what it was the beginning of it, was more collaborative, more based on user generated content (UGC), more of things that could aggregate or congregate people that notice clusters around a specific topic or a specific occurrence. That was accelerated by the explosion of social networks. But in the end, it wasn't something that provided much, that just provide color.?

From the perspective of the user. What do you think? What do you want? What you want it to be? It was what you shared on your social networks and what created those moments of belonging based on the different clusters. Right??

But now we are in a time in which the digital transformation, it's in another level. And it comes very near and close to the generational transformation, in which it's not only about participating -what you could consider what's the core of the social media frenzy-, what people call Web 2 or Web 2.0. Wasn't about participating, was actually getting involved and taking action, and taking ownership of what you believe in, and when you invest your time and money in, that's Web 3, and that's what we are seeing now with the explosion of blockchain technology that has come to life, that now there's the appropriate technology to allow for people to own a piece of what they believe in and what they want to invest their time and in their effort.?

So, in general, the sports industry specially has been a very reactive industry. It hasn't really led transformation, even though in some ways it was the platform for transformation to manifest itself either through media, or broadcast technology, stadium technology -albeit in some markets globally. But it wasn't something that was progressive as to they were leading the charge in terms of building a new space, a new community. And that’s what these new technological spaces -and it has some resemblance to the boom of digital or online sports betting- in which that piece of tech or that space, within the digital space allows for a great economic potential. And with a lot of economic potential, there's a lot of money flying around, and most certainly sooner or later we'll face the music of regulation in the different markets, countries. and regions.?

But the reality now of it is that the process in which sports needs to look at blockchain, Web 3, it's more active. If you want to really lead change, and if you want to really own the process of transformation, in which you are an actor of, you cannot be a tourist. You need to immerse yourself, understand it.?

Right now, we are, from my position here at The Connect, we are looking at different ways in which this new movement about blockchain, cryptocurrencies, is shaping sports or is wanting to shape sports, but the space in which we are right now, commands for a more thoughtful design of the strategy, and then a more thoughtful approach to the market.?

And to paraphrase or quote what I consider is a great mind in this space, Zoe Scaman, of Bodacious: "strategy, first and foremost, it's about problem definition and creative problem solving. But if we're taught that the only tool, we have is a hammer, then we're going to treat every problem as if it were a nail."?

And this comes to reference, is that if the sports industry wants to really take advantage, and give a good use to blockchain technology, cryptocurrency, tokenization of assets, it really needs to understand the potential of the technology and the potential of our own IP and assets, within that world.?

I'm advising some of my clients that are taking steps into this space, to look at it from a differentiated standpoint. Not all companies in the space do the same thing, and even though there are some big companies that kind of, or can do more than one thing, it is in your best interest to try to mitigate potential risks, and especially to try to optimize the potential economic upside of that. If you want to get into the blockchain space, you have the specialist fan token development companies; you have specialist NFT development companies (and the NFTs are a subcategory on its own). You have crypto exchanges, that can help you create your own cryptocurrency, but you need to define that from the strategy perspective in which you need to set the boundaries of where you want to play and look for the best partners.?

So, if you look at fan tokens, and analyze the top companies in the space, you want to look after reliability, and you want to look after the robustness of their business and their technology, especially because what you need to be taking care of is that you are protecting your fans. It goes beyond the deal, you want your fans to be at ease that their investment in time and resources into these assets is not going to waste, at any point. If you want to play in the wider blockchain space on the cryptocurrency space, then looking at exchanges it's very important.?Looking at the top exchanges and looking at what is happening on the regulatory front and understanding how your assets and your IP and your platform actually show benefits to those companies, and how you can be benefited and not affected by their operations. And in the case of NFTs, which is pretty much the driver of the full blockchain chatter around sports and entertainment, in a very simplistic way, what we need to be looking at is how you will run a differentiated, nimble, and potentially scalable licensing program. It's no different than licensing all their assets or their IP. It's just a different conveyor, a different packaging of what you're offering.?

So, in the NFT space you want to look for, again the same thing, robustness of technology, trustworthiness of the developer, but especially creative capabilities. You want to take your most precious assets, which is your good name and your valuable intellectual property and be able to discern a kind of verticalized different IP touch points that you have and create vertical collections under the NFT model. That's a wide licensing approach, and again you need to also identify where you want to take the space; what are you going to do with your audio-visual material? What do you want to do with your photographic material? What happens with archives? What happens with future content? What happens with content about specific actors of your ecosystem? Either the same league -if you're a league- or a club -if you're a club-, or players.?

If you are one of the previous two, what happens if you want to go into the art space and partner up with art collectives that take your IP, and elevate it in a different way? What happens if you want to go to the Phygical (physical and digital) collective space, in which you can have the specific assets that are physical that then you can create tokenized versions NFTs, on those, and how that whole construct will look like? That's at least the safest approach to approach this, and it might sound like it's a recipe for foregoing potentially big checks now, but what you are doing is protecting your IP and being able to look for scalability, repetition, and most importantly, looking for the security and the guarantees that you need to put forward for your audience and your fans and your customers to be committed to that. And in that regard, even before discussing the different economics of it, it's necessary to understand what ownership means. Internally within this space, and from the different audience or consumers that want to own a piece of it.?

The reality is that as IP rights holders the necessary steps need to be taken for you to be able to own -in a good sense- the relationship with your audience and your consumers, and not forego the control of that relationship because that's the lifeblood of your operation. You want to create a community in which you can plug in all these aspects of the blockchain or crypto space and be able to leverage and engage with the community and give them what they want or what they like. The other side of it in terms of ownership, is that what you are providing this audience or these consumers, be it they are hardcore fans of your product, or just taking all the enthusiasts, or just that want to collect this type of content or assets, it's that what you are trying to give them is a piece of your IP and a piece of your operation that lasts forever. That it's in perpetuity. This is critical because the perpetual notion of these assets is what gives them value in the short and the long term. So, my advice is to be able to slow down and look at what you're being offered to define your strategy and go after the partners that will allow you to implement a credible and secure space within this whole industry and community.