The effects of COVID-19 continue to move around every part of the world’s financial, health, educational, economy, and private institutions. This has not left out the Sports industry as they have also felt the effect of the COVID-19 pandemic.
Matches have been postponed, Leagues have been modified and many competitions coming to an abrupt end. The UEFA Champions League had to follow a straight knockout in order to end the Annual showpiece.
Most Leagues are now adjusting to the effects of COVID-19 especially with the absence of fans on matchdays. Club Owners, sponsors, league broadcasters and governing bodies are now battling to survive the COVID-19 impact.
The financial impact of COVID-19 on the sports ecosystem has affected
- Sponsor relationships – Jurisdiction COVID-19 laws prevented Napoli from playing Juventus which resulted in Juventus being awarded a 3 nil win. The major question is how everyone clubs, leagues, and other individuals make their relationship with broadcasters, sponsors, and partners stronger.
- Club and League Operating Model – Most clubs are now urging their player to take paycuts with Arsenal, Barcelona, Juventus, and many others championing the paycut cause. This has led to dispute and players being ostracize from first team. Leagues have also considered financial relief funds for the lower leagues like the Premier League. The Premier League back in April voted to advance funds of £125 million to the EFL and National League as it is aware of the severe difficulties club throughout the football pyramid are suffering at this time.
- Fans– No-one ever believed there will be a time when most football teams will be forced to play in an empty stadium. This is the norm now and it has affected every part of the matchday income from hospitality to match tickets and other normal activities carried out in the stadium.
Commercial revenue from licensing, merchandising, advertising sales, investments have been hit as many of this revenue are based on performance driven payment schemes such as team performance, marquee transfers, and other things. COVID-19 has ensured some of these cannot be delivered which means nulled sponsorship programs.
If football clubs are unable to fill stadium, their sponsorship will start declining and no reasonable sponsor will pay for zero returns. The sponsors want fans attention and direct interaction with the football game. There will be a fall in merchandising demand and other licensing products.
Some clubs have the financial muscle to weather through this doesn’t mean most clubs can do the same. Sponsorship and commercial revenue is a major source of income for football clubs and the governing bodies as it accounts for 28% of total revenue in the Premier League. This shows that sooner or later, the so-called top clubs will feel the impact if COVID-19 continues.
Crypto to the rescue
The impact of COVID-19 has made football clubs and governing bodies to rethink their business models. They have seen the need to improve their digital footprint and get extra income from the digital world.
The simple viable solution to this is exploring the world of cryptocurrency.
Football clubs should have fan tokens that can be purchased for a variety of activities. We have seen Chiliz come up with partnership with many football clubs like PSG, Juventus, As Roma, Atletico Madrid, and Barcelona. We need more than that. Football clubs should launch their own Crypto token that will be backed with activities like
- Virtual Meetups – Token holders can have the power to see a live video session of their favorite players, behind the scenes, or even feel the dressing room experience. The virtual meetup can come in the form of a bidding where the highest bidder get to experience their favorite player moment live.
- Club decisions – Certain decisions can also be thrown to the token holders to vote on. This can come in form of Proof of Stake tokens where the decision with the highest vote wins and get implemented. The decision may include choice of campaign bus, choice of celebration route, choice of charity, choosing jersey design and many others. Your token power gives you a club in some of the club matters.
- Earn rewards – Rewards such as signed jerseys, club merchandises, to occasional stadium visits can be gotten by the token holders.
It may look minute at first but with club fans running into their millions, it won’t be long to have a fan token worth hundred millions of dollar. A club like Arsenal, Real Madrid will definitely sellout their ICO in minutes of launching. This can act as an extra source of income for the club as they whether through the storm of COVID-19.
Imagine being able to select who your club plays in their pre-season friendly match. That is how beautiful it is.
There are platforms like Hive where the token can be built upon at a very lowcost with almost instant transaction. It will be great to see football clubs go into Crypto to mitigate the effect of COVID-19.
Platforms like Hive and Scorum can also pitch some great ideas to lower leagues clubs suffering hard from the COVID-19 pandemic. This will be a win-win situation for both parties involved as the clubs can easily pay their player wages from the fan tokens earnings and even have extra funds to purchase players.