Op-Ed: How Bitcoin Could Change How We Interact With Sports
Major sports teams around the nation are offering their season ticket holders special reward points. Could blockchain technologies be more effective? And what would we gain from using them?
The coming months are poised to be a big one for Bitcoin and sports. Already, a few different major sports teams have announced that they will be adopting bitcoin payments in some way. NASCAR has been having a long affair with cryptocurrencies. Biggest of all, at least in the United States, is that Bitpay has purchased the rights to a NCAA College bowl game, naming it the Bitcoin Bowl.
But can cryptocurrencies and blockchain technologies be fused with sports in a deeper way than advertising and hot dog purchases? Can cryptocurrencies be used to enhance the fan experience in anyway?
The New York Jets have recently announced a new fan reward program, which will reward season ticket holders with points every time they scan a card. The points can be redeemed for exclusive items and experiences only the Jets can offer. Things like autographed memorabilia, tickets to sit in the owner's box, flying with the team to an away game and even Super Bowl tickets.
The aim of the program is to add value to the extremely unpopular PSL policy. PSLs or Permanent Seat Licenses are sold by some high-demand sports teams as a way to reserve the right to buy season tickets. Fans often have to wait for years on waiting lists, and when their numbers are finally called they are expected to shell out thousands to tens of thousands of dollars, for a PSL, which will give them the “right” to purchase season tickets at face value. In the Jets case, the most expensive PSLs cost $25,000 each but the team is hardly alone in selling high priced. The San Francisco 49ers sell their most expensive PSLs for $80,000.
Photo: New York Jets
PSLs are often framed as an investment by the top brass at the Jets (and by other teams around the sports landscape that use PSLs). The idea being that season ticket holders can sell tickets of games they don't want to go to in order to make their money back. PSLs can cost up to six figures on the secondary market, and are never lower than four figures.
There are a few problems with this. First, fans bought the season tickets because they likely wanted to go to those games, with only eight regular season home games played per season in the NFL, there are only a few opportunities to make the PSL money back. Second, when the teams perform poorly (and the Jets have had their fair share of hard seasons) it can be hard to unload those tickets at a price significantly over face value (and remember, PSLs don't stop you from having to pay for the tickets). Third, the team seems to be talking out of both sides of its mouth. Generally, selling tickets anonymously in second hand markets is frowned upon, since those tickets could go to fans of the opposing team.
The reward program is designed to address these issues. Season ticket holders will be given a physical card they scan for all their games, rather than the paper tickets fans are used to. When fans go to the games, they will scan that card instead of tickets and will receive points for showing up to the game. The number of points awarded can be affected by the fans themselves, penalties that the other team commits that are often attributed to fan noise levels (false starts, delay of game, etc.) can increase the number of points earned. If the season ticket holder wants to sell their tickets, they still can. The purchaser will simply print out their copy of the ticket through StubHub (or similar service) and the season ticket holder will not receive his or her reward points.
This doesn't prevent season ticket holders from selling their individual tickets, but it does encourage them to attend the games. Additional points are awarded for showing up 15 minutes before Kickoff, buying concessions, and a variety of things not yet announced.
Eventually, these points will be built up to form a quasi-economy, with fans bidding with their points for items sold exclusively by the Jets. As an admitted Jets fan, I can say a better reward for fans would be a few healthy cornerbacks, but this is still an interesting program.
Also, I'm going to continue to refer to the Jets in this article in order to help with the visualization of it and because they have the new rewards program. But it could be done by nearly any sports team.
It is easy to imagine how Jets Points could be a cryptocurrency. Simply release the points as a colored coin on the blockchain, and let the Bitcoin blockchain secure it. They could just as easily release it on NXT's asset exchange or through Ripple's gateway. The end game would be to turn the Jets cards each season ticket holder is getting this year into wallets. New coins could be minted every game and distributed to the PSL holders that attended that game. Essentially, you would be mining the coin every time you attended a game as a PSL holder.
That is how is could be done, but is there a need for it? Would it actually enhance the experience in anyway, or am I simply trying to fit a square cryptocurrency peg into a round sports hole?
The most obvious and by far the largest advantage to turning Jets Points into Jets Coins is that it would add some legitimacy to the idea that buying PSLs represent more than tickets to the game, they also represent a financial investment. There is already a fairly healthy second market for PSLs. But, if the Jets Points were an actual cryptocurrency, a cryptocurrency that only PSL owners could receive from the source but could then be sold on the open market, now PSLs are cash generating machines even when you go to the games.
The Jets would sell exclusive items that would have instant monetary value but could only be purchased with Jets points. This would give Jets Coins (or whatever they end up being called) instant value. If a valuable piece of memorabilia was released, say a Jersey worn in a game by Joe Namath, hundreds of thousands of Jets fans would want it, and would be willing to pay PSL owners for the Jets Coins needed to purchase it. Essentially, the Jets and their fans would have their own currency and it would be the ones that supported the team the most (monetarily) that would reap the benefits. But it would also give Jets fans who live too far away, a new avenue to obtain memorabilia in a safe way, or to purchase once in a life time opportunities, like dinner with Jets owner Woody Johnson.
Photo: Ed Yourdon
Another advantage would be the monetary opportunity this would present for the Jets. Pump and dump schemes are everywhere in the altcoin market. Once you can create money out of nothing (other than a little computing power) you only have to get enough people to believe in it to give it some value, before it becomes profitable. With exclusive items that hundreds of thousands of people want to buy being sold exclusively for Jets Coin, it would instantly gain real tangible value.
In addition to raising the value of the PSLs, there would be nothing stopping the Jets from occasionally selling Jets Coins themselves. They would have to be careful, because every time they did it, it would cause the value of coins held by PSL owners' to drop accordingly. They could offer to sell it only to fans who are on the season ticket waiting list, which would of course encourage more people to job on the list and increase the value of the PSLs even further.
Cryptocurrencies and sports might not seem like the most ideal fit. Fans of each team make up their own sub-culture, and with that comes products that, for the most part, only the fans are interested in. If the Jets keep selling things that people want for Jets Coin, then Jets Coin will have value. The more exclusive the item, the higher the value. Why not give that sub-culture its own sub-economy? Why not let fans choose what to do with their rewards? Why not give them something tangible and real for their thousands of dollars rather than glorified SUBWAY reward cards?
I don't know if a major sports team will ever embrace bitcoin to this degree. If it happens at all, it won't happen until after Bitcoin hits mass adoption. Still, when major faces around bitcoin talk about altcoins and colored coins filling individual niches, it is easy to see how a team's fanbase, a fanatic sub culture within a sub culture within a sub culture (Sports Fans -> NFL Fans -> Jets Fans) could easily fit into that paradigm.
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