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Web3 is the game changer for athlete monetization beyond the pitch
Disclosure: The views and opinions expressed herein are solely those of the author and do not represent the views and opinions of the crypto.news editorial.
In 2022, the sports industry has generated a valued $403 billion in revenue, projected to increase to $680 billion by 2028. Despite this growth, financial benefits for athletes are predominantly enjoyed by the top percentile.
While lucrative contracts and endorsements are common among the elite, most athletes struggle to secure financial stability at the end of their careers. Craig Brown of NKSFB’s Sports Business division highlights a worrying trend: 78% of professional athletes experience serious financial difficulties within three years of retirement. This begs the question: How can Web3 address and help change monetization models for athletes during and after their careers?
Sports industry revenue worldwide in 2022, with forecast for 2028 (in billions of US dollars) | Source: Statesman
Traditionally, athletes have relied on earnings from contracts, endorsements and endorsements. This model presents challenges not only after retirement but also for young athletes at the beginning of their careers. This includes college athletes who may not have access to payment opportunities due to current regulatory or market constraints.
The short lifespan of professional sports careers means that the financial security they offer is often fleeting. Additionally, many athletes, particularly at the collegiate level or in less commercialized sports, experience difficulty obtaining substantial sponsorships or contracts, leaving them financially vulnerable during and after their athletic careers. These challenges present the need for a more sustainable monetization model that can provide security and stability from the start of an athlete’s career until retirement.
Enter web3, which offers athletes the opportunity to start earning from the beginning of their career and continue generating income even after retirement. This technology is changing the athlete monetization space, offering platforms that support sustainable income streams well beyond their active years. Web3 can provide much-needed solutions to these challenges through blockchain, smart contracts and tokenization.
Web3 allows athletes to tokenize their personal brands and earnings into digital assets, which allows them to maintain a continuous income stream. For example, athletes can tokenize a percentage of their lifetime earnings or brands associated with their personality, which fans and investors can purchase, ensuring their athletic success pays dividends well into the future.
For example, NBA star Spencer Dinwiddie symbolized his contract to allow fans to invest in his future earnings. Likewise, football legend Lionel Messi and tennis star Naomi Osaka have ventured into releasing their own NFTs, offering fans unique digital collectibles tied to their achievements.
Smart contracts for reliable royalties: These contracts automate and secure royalty deals from endorsements, merchandise sales, and media appearances. These payments are automatically triggered whenever their name, image or performance is used, providing a stable income derived from their peak professional years. The potential for web3 to transform financial reporting in sports is profound. Smart contracts, for example, ensure that athletes and artists are compensated fairly and promptly for the use of their image. This is not only critical to maintaining a stable income after a heyday, but it is also critical to protecting and leveraging your professional legacy.
Additionally, the application of smart contracts unlocks innovative ways for fan engagement. They offer exclusive access to digital collectibles, personalized experiences and direct interactions with sports and entertainment heroes. Such advancements enrich the fan experience, enabling deeper connections and more meaningful interactions between fans and their favorite athletes.
Despite the potential of web3, its integration into today’s world presents some challenges. The inherent complexity of blockchain technology and its interfaces may discourage widespread adoption, requiring significant training for athletes, fans and management teams to effectively use these new tools. There is also a steep learning curve associated with technological literacy, which requires investments of time and resources from all parties involved. Additionally, the volatility of cryptocurrency markets and the evolving regulatory landscape introduce financial and operational uncertainties. Furthermore, environmental concerns related to the energy-intensive nature of some blockchain operations pose challenges in terms of sustainability and public perception.
Looking to the future, integrating sports with gaming through web3 technologies can open up another avenue for athlete monetization. This could lead to the gamification of athletes’ careers, allowing fans to interact with their favorite sports stars in a virtual environment, using them as characters or players in online games.
Adopting VR and AR technologies could allow fans to train with digital avatars of their favorite athletes, receiving real-time feedback and suggestions, which enhances personal connection and adds an educational component. As these platforms evolve, they can host virtual events where outcomes and interactions directly increase an athlete’s earnings through microtransactions and token exchanges.
This interactive approach would transform passive audiences into active participants, creating a new dynamic sports economy where every interaction has tangible value.
Web3 is proving to be more than a new way for athletes to earn money; it also strengthens their bonds with fans. As the sports industry adopts web3, this is not just a temporary change but a fundamental change. It is transforming the way athletes manage their careers and secure their futures. From this perspective, web3 isn’t just another revenue option: it’s becoming crucial for athletes aiming to maintain success well beyond their peak competitive years, ultimately bringing the fans in all of us closer to the players and to the beautiful game we love.
Matt Bailey
Matt Bailey is the CEO and founder of GameOn Entertainment Technologies. Matt is an Australian entrepreneur with over 15 years of experience in sports, gaming and web3. After working for ten years at renowned organizations such as Brooklyn Nets, Barclays Center, Cricket Australia and CSM Sport & Entertainment in Australia and the United States, Matt founded GameOn Entertainment Technologies. Since its inception in 2018, GameOn has raised over $10 million in funding, participated in the Techstars accelerator, and partnered with Comcast, NBCUniversal, and key players in the blockchain space such as Polygon, Hedera, and Arbitrum. The company also collaborates with sports leagues such as LALIGA, PFL and Karate Combat.