Could cryptocurrency play a part in the future of sport allowing fans to claim club benefits?
Dr Michael Naraine, from Deakin Business School, said Blockchain has largely untapped powerful potential for new sources of revenue for sports clubs.
He explores its potential in a new paper, 'The Blockchain Phenomenon: Conceptualizing Decentralised Networks and the Value Proposition to the Sport Industry', published in the latest edition of the International Journal of Sport Communication.
"Imagine if you could own a Cats Coin or a Tiger Token through the Blockchain system to buy tickets and merchandise or hold onto the cryptocurrency as demand grew and it increased in value," Dr Naraine said.
He said clubs could raise equity for new facilities by selling tokens to the public through an initial coin offering (ICO) in exchange for an established currency.
Token owners could then buy tickets or merchandise or on-sell or convert their tokens back to established currency once the token's value increased through growing demand.
"Sport-based tokens, based in the Blockchain system, have great potential to generate revenue and expand customer base," Dr Naraine said.
For a team to derive substantial value from an ICO, there would have to be considerable thought and planning on how to enhance the value of token ownership, making it attractive to fans and currency speculators.
"For example, token owners could receive a physical certificate denoting a certain status, they could use their token to buy tickets, use tokens to go further up the membership wait list, or even have access to exclusive content and experiences," Dr Naraine said.
"As the token rises in value, the club benefits from increased revenue because although the ticket price may remain token price static, the actual token they receive from the transaction is higher - bringing in additional revenue."
Dr Naraine warned a knowledge and skills gap, such as the potential use of Blockchain in the sport industry, could cause clubs to be left behind.
"Too many sporting clubs and organisations were too slow to engage strategically and cleverly with the business growth potential of social and digital; sporting clubs that fail to at least explore the new frontier and potential of Blockchain do so at their own risk," he said.
Originally published on Deakin Media.