All aboard the latest bandwagon! Technology is moving apace, creating myriad new opportunities and understandably, given the havoc wrought on our industry by the pandemic, rightsholders have been challenged to find new ways to generate income.
Barely a day goes by without one sports organisation or another announcing a partnership in the NFT, Fan Token or Blockchain space and no doubt there will be many others stampeding towards the Metaverse before too long. But does anyone truly understand why – beyond the temptation of a short-term cheque – they’re doing it? How much genuine due diligence goes into the partner and how much thought goes into the impact on the fans?
The jury is still out on whether these plays are (or will be) mass-market tools that genuinely enrich the fan experience or if they’re just vehicles for Crypto-investors to profit from the naivete of the less-sophisticated who think they’re engaging with their club but in reality are patsies in what often feels like a giant pyramid scheme, facilitated (unwittingly) by the club they support.
Similarly, I have read various pieces in the past few days from agencies exhorting their clients to ensure they have “Metaverse strategies” and even one for Roblox but none actually pauses to explain why, or what value they would bring to the client beyond short term revenue goals or boosting “engagement”. Given many agencies have spent the past decade urging their clients to outsource their engagement strategies (and therefore ownership of their customer data and associated revenues) to the likes of Facebook, perhaps we should not be surprised. Our industry doesn’t seem to learn its lesson – as soon as a bandwagon rolls into town, it unquestioningly jumps aboard, rather than taking the time to invest in a genuinely holistic bottom-line shifting long-term strategic approach. Everyone rushes into the “what?” before defining the “why?”.
These technologies may well have a role to play but none is a silver bullet. There may be some short term upside but at best it’s kicking the can down the road, at worst it is actively detracting from fundamental objectives, such as customer retention.
The issue here is that we are moving into a bear market. Consumer spending is being shackled by rising inflation and imminent tax rises. There is less and less liquidity in the corporate market and – especially in football – with the betting industry seeking to regulate itself before it has regulation imposed on it, there are revenue gaps. Luckily for them that breach has been filled by a plethora of new players in the burgeoning Crypto market, with, it appears, very few questions asked. It’s short term cash, it keeps the lights on, thank you very much.
Blockchain, NFTs et al are not going away and whilst there are no doubt some scrupulous players in the market, at the moment crypto is wholly unregulated and has a real air of being another South Sea Bubble – “19th century hucksterism with an internet connection” as one commentator has described it. But because there is cash available and it feels kind of sexy, more and more are rushing to join the party. When PSG announced Lionel Messi’s arrival there was much fanfare about his package being partly paid in fan tokens. Cue a surge from fans wanting to buy in (at the peak of the market), leaving those with more sophistication with healthy profits and the well-meaning naifs holding the baby when demand falls. A quick search of many other similar schemes shows exactly the same trend.
It would perhaps be more palatable if the “benefits” these fan token schemes were offering fans amounted to more than voting on what colour to paint the team bus or who should appear on this week’s wallpaper. “Fan engagement” ironically appears somewhat tokenistic.
We have no doubt clubs mean well in striking deals with these companies. Whilst more due diligence should be done, the reality remains that whilst they are under pressure to bring in revenue, short-termism rules and if everybody else is doing it, people won’t want to miss out. At a time when sport desperately needs to be investing in deepening its customer relationships, the temptation of immediate cash returns are jeopardising the longer-term play.
What is frustrating is that if they only took a step back, sports organisations could have it both ways. Those customer relationships are their most potent commercial IP but maximising its value means taking a longer-term view and genuinely treating them properly rather than making a quick buck and hang the consequences,
There is no doubt that the opportunities made available by Blockchain technology in particular will have a part to play in the future of the sporting commercial model, especially in the ticketing sphere. Heck, there may even actually be a place for a Metaverse strategy but unless it’s all contextualised into a broader approach which understands what will genuinely make a difference to the business long term, sport will always be looking out for the next bandwagon to jump onto to save it from its eternal hamster wheel.