Web3 and sports: how blockchain is transforming the industry?

Anyone who thinks that web3 and sport are part of different worlds is mistaken. Sport has evolved, as has the way we consume it, and technology is increasingly an ally of fans each day we pass. And although it is not yet as popular a technology, the main clubs, brands, athletes and sports leagues in the world already have some hand in web3, which aims to revolutionise the way we interact on the internet.

Whether through games, NFTs, fan tokens or other experiences, the sports and entertainment industry has already understood the power of web3 and blockchain. In addition to being a great tool for engaging with fans, it also represents a new source of revenue for sports organisations.

In this article, the Sherlock Communications team brings the main points for you to understand how web3 and sports are already connected, what innovation blockchain technology has already brought to the sector and how the Latin American media has been portraying the topic.

According to a Deloitte report, personalised and digital-connected experiences will be the future of the relationship industry between sports teams and fans, especially when we talk about generation Z. The study shows, for example, that these younger fans are more interested in exclusive content and experiences beyond going to the stadium in person, for example. This revelation reveals a way forward for clubs.

Until the emergence of social media  and fan tokens, clubs’ relationship strategy was 100% focused on gaming operations. The great benefit of most football teams’ loyalty programs, for example, is priority to buy and discounts on tickets. But this ends up leaving out a huge portion of fans, such as those who live far away or have no interest in going to the stadium, but who could be helping the club’s coffers.

Fan tokens then appeared in 2020, when the giant French club Paris Saint-Germain launched its digital asset in football for the first time. After that, it was the turn of several other teams, such as Barcelona, Manchester City, Corinthians, Flamengo, São Paulo, Palmeiras and much more. 

And it wasn’t just in football, but F1, rugby, tennis and MMA teams also developed their fan tokens. All with the aim of being a new point of contact between the sporting institution and the fan. It’s web3 and sport going together.

What are tokens?

If you’re not already familiar with the technology, the fan token works like a team-branded key that allows you to access an exclusive community of experiences and benefits, such as meeting players, participating in the team pulls, obtaining VIP tickets or even redeeming official trips and autographed memorabilia – which ends up being advantageous for fans who want to be closer to their favourite teams. 

This democratisation of sports ownership not only deepens fan engagement, but also provides teams with alternative revenue streams, promoting a more sustainable sports ecosystem.

It is worth noting that the fan token is not a cryptocurrency, as it does not allow you to purchase anything, only redeem experiences. Although many investors buy fan tokens with the expectation that they will increase in value over time and then sell them, fan tokens are not financial in nature, but rather useful.

Transparency and decentralisation are two fundamental principles of web3, which encompasses technologies such as blockchain and tokenization. The blockchain, for example, works as a network of encrypted data records accessible for consultation by anyone – it is 100% transparent. And this transparency can ensure that all actions in the sports ecosystem, from ticket sales to athletes’ contracts, can be monitored and verified by all interested parties (fans, clubs, leagues, brands), without the need for intermediaries. And this is where the principle of decentralisation comes in.

Decentralisation further reinforces the trust of blockchain by distributing control and decision-making power across a network of validators, reducing the influence of centralised authorities and promoting inclusivity within the sports community. Imagine athletes negotiating contracts directly with teams or sponsors, bypassing traditional intermediaries and ensuring fair and transparent compensation. This could be the way. And in case you question that web3 is still a very recent technology, it is worth mentioning that, in February 2024, the French club Paris Saint-Germain became the first blockchain validating football team in the world, demonstrating that the club is not only embracing the future, but also projecting it, now takes on a more active role within the ecosystem.

The topic of web3 and sport in the Latin American press is still not a consensus. While cryptoeconomics and sports business journalists are already showing interest in the subject, the sports and technology press is still reluctant to address the innovations in the sports environment promoted by blockchain.

As they are already familiar with the world of decentralization, crypto journalists view the adoption of web3 by the sports industry with optimism and are very willing to work on stories on the topic. Sports business journalists are also open to understanding the market as we are talking about a new revenue source for clubs.

On the other hand, sports and technology journalists still don’t seem to feel very comfortable working on stories about it. And here we can cite several reasons, such as: the focus of each editorial (while the sports press is focused on the results of the games, the technology press wants to test the latest gadgets launched), distrust because it is a new technology (such as has always happened in the history of humanity) and lack of knowledge and ability to translate the subject for the reader. But nothing that can’t be resolved.

A good PR program that includes the dissemination of content about web3 and sport, such as relevant market data and quotes, as well as great experiences with sports clubs and relationship meetings with opinion makers can help overcome these barriers posed by the sports and technology press.

Here at Sherlock, we have a team specialised in web3 and sports precisely to solve these problems. Based on our experience in the region, there is a huge need to educate the public (both end consumers and journalists). And you can’t do that anyway. For this reason, in our PR program, we have several strategies with educational content.

In addition to producing taylormade content that truly engages newsroom journalists, revealing in practice how web3 technology can benefit clubs and fans, we also believe that face-to-face meetings and physical gifts are a great way to ensure that journalists understand the relationship between web3 with sport. Here we have already held launch events, press conferences, one-on-one interviews and various relationship meetings. All to help translate the power of blockchain in sports to journalists outside the crypto bubble and ensure diverse coverage for our clients.