Last week something happened that massively flew under the radar.
The Spanish soccer team Getafe FC was purchased by a web3 group intending to use a Decentralized Autonomous Organization (DAO) — giving fans some stake in the game.
This model is slowly creeping across all sports, continents, and leagues.
Ownership in sports is EVOLVING right before our eyes.
Let’s Dive In 👇
Direct to the Source
Sports is going through what I like to call a “weed-whacker moment”.
What does that mean?
Innovation is helping to remove all the unnecessary red tape and bureaucracy that has slowed down improvement for years.
One of those being — the middlemen of the middlemen.
I’ve seen it firsthand in endorsement deals many times — for a big-time athlete to sign a deal, there are often 7 people somehow involved — all wanting a slice of that deal between the athlete and brand.
There are too many hands in the cookie jar…
And this painful dynamic often forces the “good” people out and allows the “shady” individuals to stay around.
It’s especially a problem in name, image, and likeness (NIL) — where young kids want to make money and end up signing agreements that are almost predatory.
Athletes Want More
Thanks to the internet and access to more knowledge, athletes have become more aware of their TRUE value.
In the past, they thought they were at the top of the food chain. But today, they look at the owners with some jealousy.
The classic, “if they’re paying me $50M/year, how much am I really worth?”.
As we saw in Agencies Are Transforming, athletes today want different from their supporting cast.
They want ownership, not just endorsements and rented opportunities.
This is exactly why after Giannis Antetokounmpo signed a $225M deal with the Milwaukee Bucks, he became a shareholder in the Milwaukee Brewers.
At the base of sports we’re trying to remove stakeholders and connect the athlete directly with others, but interestingly…
Sports at the macro level is actually trying to bring more hands to the table.
Here’s what I mean:
The DAO Model
Ownership for startups, teams, leagues and traditional companies is starting to change.
Look at some of these:
- Krause House – attempting to buy an NBA team and already bought a BIG3 organization, raised over $5M in NFT sales
- LinksDAO – has plans to buy a golf course and has major partnerships with Topgolf, Callaway, DraftKings, and more, raised over $10M in NFT sales
- Sail GP – the only league making team ownership available to anyone through their DAO model.
The idea is that active participants should have an upside stake as well — can be referred to as members, NFT holders, subscribers, etc but they’re all the same thing.
Fans want to be OWNERS and decision-makers, not just cheerleaders.
Think of it this way…
Why should certain people be entitled to ownership, just because they have a lot of money or social status?
We saw this play out in pickleball.
Lebron James, Kevin Durant, Tom Brady, and other athletes put on this “show” to act like they play pickleball. But the real reason is they wanted to buy a team (they see the financial upside).
So the “elite” get all the monetary benefits — and ALL the regular folks + pickleball enthusiasts get is a new pickleball league?
PickleDAO noticed this disconnect and formed an entity to create the “people’s team”.
Not only are they pooling money together through a DAO to buy a professional pickleball team, but they’re also doing a ton of cool things to add value back to the pickleball ecosystem across the country.
The thought is this…
All the people that helped grow the game should have a chance at real ownership (however small it may be) to continue improving the upside potential and receiving added benefits on top of that.
The DAO model is here to stay, either learn about its power now or be forced to learn about it in 5 years once you’re behind the curve.
And even at the league level, ownership is a topic of debate.
Ownership or TV Deals?
Top sports leagues are juggling direct-to-consumer fan relationships with billion-dollar media deals from Disney, FOX, Apple, and Amazon.
The question becomes…
- Do they sell directly to the fans with their own network and streaming platforms?
- Or do they lean on their media partners?
Interestingly, the answer seems to be both.
For example…
After signing an 11-year $110B media deal, the NFL still rolled out its own streaming service (NFL+) shortly after.
It will interesting to see what the NBA’s next media contract looks like as their current one is set to expire in 2025.
Leagues aren’t going to ditch billions in media deals just yet.
But in all seriousness…
How much could the NFL make if the only option to watch games was through their own platform NFL+?
Going Forward
Nearly everyone in sports is starting to prioritize ownership over the borrowed ability of endorsement.
We’re seeing it with:
- agents
- athletes
- startups
- companies
- teams/leagues
- and everything in between
The shift is this…
Intention > attention.
Consumers are pulled in so many different directions that attention is overrated anymore.
But intention is powerful.
Just as robots are removing middlemen in manufacturing, innovation is removing middlemen in sports.
One more thought…
Team ownership shouldn’t be limited to a handful of billionaires, but rather a movement of individuals that want to be a part of the greatest professional leagues in the world.
Fans breed life into the organizations they cheer for, so isn’t it reasonable to accept a shared portion of the ownership and upside?
That’s the dynamic DAOs are attempting to create.
And think about this…
$850 million out of the $1.4 billion in costs for the new Buffalo Bills stadium is coming out of taxpayer money — that’s over 75%!
But when the family that owns the team sells — they’ll receive all of the upside benefits at the expense of taxpayers (who won’t receive a penny for their forced contributions).
I don’t think the DAO model in sports is merely acceptable — but actually mandatory.
Ownership will look different in the future.
