By Vanessa Malone
Technology has completely evolved the way fans experience sports. Social media, fantasy sports, live streams, forums, in-game betting, and more have all taken the sports viewing experience out of the stadium and into the hands of fans.
Today, these surrounding forces have become permanent introductions to the sports ecosystem. In some cases, these new ways to engage with sports are beating out the traditional way, which in turn may be impacting ticket sales. In fact, 24/7 Wall St. found that the NFL, NBA, NHL and MLB have all seen a decline in total attendance from 2008 to 2018.
The modern-day sports fan expects and craves more ways to personally engage with athletes and teams. This puts pressure on sports organizations, teams, athletes, and related companies to continue to innovate when it comes to fan engagement and delivering enhanced experiences.
One of these innovative concepts was re-introduced this week with the announcement that Brooklyn Nets’ Spencer Dinwiddie was moving forward with his plan to sell a tokenized bond based on his future earnings.
The tokens are going to be offered to accredited investors for $150,000 per token with a maximum of 90 participants.
The deal was initially announced in September but delayed by the NBA. The offering was then supposed to launch January 13th, but is now expected to launch sometime next week after the NBA reviews the modified version of the token offering.
The introduction of blockchain to the world of sports is an incredible way to fuel acceptance and understanding of this generally misunderstood technology. In last week’s blog, we discussed that one way to get the general public excited about blockchain is to provide them with a way to interact with it that makes something they’re interested in better. Sports engagement via athlete investment opportunities seems to be a perfect use case to explore. Using blockchain technology like Horizon’s one-stop-shop, these opportunities can be more seamlessly issued, fractionalized, and traded.
The caveat — just like what happened with the first round of digital securities offerings (DSOs), the opportunities for fans to participate in securities offerings tied to athletes’ future earnings are currently limited to high-net worth individuals.
The good news is that this is just the first step on the path toward the investment opportunities being accessible to the general fan base.
If the idea of fans owning equity ownership in deals typically reserved for high net worth individuals rings a bell, it’s because it echoes the vision behind Regulation A+ (Reg A+). Dinwiddie must have thought so too, as he tweeted his intention to conduct this type of offering in the future.
As a quick recap, in a Reg D offering only high-net worth individuals, or accredited investors, are able to participate. This is the vehicle Dinwiddie is utilizing for his token offering. Reg A+ allows digital securities issuers to broadly market their offerings and accept investments from the general public.
This would mean that athletes would have the opportunity to tap into their fanbase to invest in any future success the athlete may have. As far as fan engagement goes, this is next level. Athletes utilizing Reg A+ would ultimately enable athletes to build a loyal group of brand ambassadors with a vetted interest in the athletes success.
Issuing these offerings on the Ethereum public blockchain adds many benefits over a traditional securities issuance. We get into the details here but the overall perks include involve removing friction, increased transparency, instant settlement, cap-table & shareholder management, and greater compliance.
Utilizing the blockchain opens up a world of opportunities for the future of sports and fan engagement. Stay tuned in the coming weeks for exciting developments on Horizon surrounding the sports trading front.
To learn more about Horizon’s one-stop-shop for digital securities, please visit https://www.horizon-globex.com/.