The Tokenization Playbook for the Sports Industry



Gardener, Co-founder (and CEO)
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Are you working in the sports industry and curious about tokenization and blockchain? Then you made it to the right place. Whether you are running or working for a sports club, managing or representing (or are yourself) a professional athlete, or working for a professional league, this guide is for you.

During the last few years, I mainly worked in the blockchain space. Early this year, I started to focus on tokenization in professional sports (and launched Liquiditeam with a few great people). With this Tokenization Playbook for the Sports Industry, I hope to condense our learnings into a compact, useful resource.

It was especially important to me to make sure it is accessible to all professionals in the sports industry, regardless of their background. Tokenization is an interdisciplinary domain. Some of the plays in here would traditionally be regarded as marketing, some as IT, and others as finance projects. I tried to keep technical lingo at a minimum so that people from all traits can follow.

The main question this publication sets out to answer is:

How can the sports business leverage the newly emerging, socio-economic technology called tokenization in order to achieve various strategic goals?

In case that the terms tokenization and blockchain confuse you, I recommend that you first read my article on tokenization in professional sports in which I introduce the subject.

Professional Sports Need to be Tokenized

And if you want to broaden your general understanding, Shermin Voshmgir, the director of the Interdisciplinary Research Institute for Cryptoeconomics at WU Vienna, has you covered with the introduction of her new book.

Now, without further ado, let’s open the first page of the playbook.

Tokenization Plays in Professional Sports

In the following section, I outline the basic concept of each tokenization play, give you an overview of its Xs and Os (i.e. I explain how you actually execute it), and I tell you for which player type — clubs, athletes, leagues — the play is suitable. Last but not least I point you to the players who are currently working on the respective play, so you will either find examples from sports organizations and/or relevant startups. Some plays, however, are so new that there aren’t any public examples yet (or we didn’t come across them), in which case it’s remarked accordingly. Of course, the plays are not mutually exclusive. To the contrary: many of them can be combined within a single service or application.

Gen Z & Millenial sports fans require professional sports organizations to develop new engagement strategies

I. Fan Engagement with Tokenization

Like most businesses that compete in today’s attention economy, the sports industry needs to be highly adaptive to changing habits of their audience. The number of entertainment options has exploded thanks to digital production means and, in the age of streaming, they are always available. In this new reality, sports organizations across the globe are investing heavily in fan engagement, i.e. solutions that help them to activate fan interest and remain relevant to them. Tokenization is an interesting tool in the kit of everyone working on this challenge.

In one sense, tokenization can be regarded as gamification on steroids. Traditional gamification techniques attempt to steer people’s behavior by building mechanisms that stimulate our internal reward system (dopamine etc.). Token-based systems can do the same, except that you can layer external rewards with a real (monetary) value on top of it to combine intrinsic and extrinsic motivational stimuli.

In the traditional gamification model you might, for instance, give your fans points for certain actions such as participating in a quiz during a live game or sharing content online. These points are a nice motivational tool — especially when fans compete for the top spot on the “fan of the month leaderboard” — but are eventually worthless. In contrast, in the tokenized scenario you reward the fans with tokens that have real value and which they can turn into cash, discounts, merchandise, or digital collectibles.

The added benefit, besides increasing your fans’ level of engagement, is the data you generate and which you can use to further finetune your overall fan engagement strategy.

The play’s Xs and Os:

First, you need to identify and define the various fan behaviors that you want to reward. Thereupon you design and implement the mechanisms by which you want to track and reward user actions. The latter will usually be done with a digital application that you can either custom-built or procure.

Who should run this play?

  • Clubs/Teams/Franchises
  • Athletes maybe
  • Leagues maybe

Which players are actively working on this play?

Sports Memorabilia. Photo source: HENCE THE BOOM on Unsplash

II. Digital Collectibles

Collectibles and memorabilia have a long history in sports. For generations, fans have been collecting baseball cards (in US sports) or Panini stickers (in European football), autographs, jerseys or other items related to their favorite clubs and players. Over the last decade, virtual goods became a multi-billion dollar industry, mainly driven by the gaming market.

So far, the virtual goods market has two major problems: if you buy a virtual good — e.g. a cool outfit for your video game character — you don’t actually own it in most cases. Instead, it is just an item that was created by the game developer and you pay to use it. This means you cannot take your outfit with you to another game. And when the developer decides to shut down the game, your item will vanish as well. The second issue is closely related: you cannot ensure that an item marketed as rare is actually rare. The publisher can create as many copies as he wants to.

Blockchain technology changes this and creates the technological foundation on which verifiably unique or rare digital items can be created, properly owned by the buyer, and even traded on secondary markets. The gaming industry is already taking note as this development has the potential to markedly change current industry dynamics (though some real barriers shouldn’t go unmentioned).

The sports industry, too, is already launching its own first experiments to gain experience in the world of digital collectibles. It’s an obvious fit with a proven market. The one question that currently remains open: what is the perfect user experience going to look like? Will digital collectibles be a static experience similar to traditional trading cards or will they be more interactive, gamified experiences? It’s reasonable to assume that they will merge the concept of collectibles with new ideas. The NBA’s Top Shot project, for instance, wants to tokenize highlight clips from games and allow players to pit their highlights against each other.

The play’s Xs and Os:

Most of the time, digital collectibles are likely going to be a licensing play with a third-party building an application and the rights owner — either the league, club, or player — selling a license to use the official content. That said, there are potentially some opportunities for clubs to develop a solution that caters towards hardcore fans, e.g. by creating collectibles around legendary players and important historical events.

Who should run this play?

  • Leagues
  • Clubs/Teams/Franchises maybe

Which players are actively working on this play?

III. Tokenized Crowdfunding: STOs

Today’s dynamic, fast-moving world poses new challenges constantly. Thus, many sports businesses are continuously looking for new sources of fresh capital. They need to invest — in star players, the fan experience, digitization, amongst many others — in order to stay competitive in the current environment. Similarly, pro athletes are looking for new ways to reduce their personal risk — e.g. of career-ending injury — as well as for new business opportunities such as creating their own brands and direct-to-fan businesses.

Whether you are a sports club executive or athlete: Have you ever thought about asking your fan base for financial support? Or did you even consider turning your fans — as well as other stakeholders — into proper investors? Fans are already at the center of the professional sports ecosystem & economy. The next step is to enable them to express their affiliation in the form of investments. That’s where tokenized crowdfundings come into play.

Crowdfunding is a well-known concept by now: instead of relying on big (institutional) investors, you finance a project or a company by asking the crowd — i.e. everybody who may be interested — for the financing. There are various different crowdfunding models and platforms, such as Kickstarter and Indiegogo for funding new products/projects, Crowdfunder and FunderNation for company fundraising, or Fairplaid which allows German sports associations (e.V. = eingetragener Verein) to collect donations.

The newest kid on the block is the Security Token Offering or STO in short. In his dedicated piece on STOs in professional sports, my co-founder Jonas explains:

During an STO, a legal entity is issuing a token representing a security, i.e. a regulated financial instrument. Instruments that lend themselves well to be tokenized include ownership rights to an asset, profit participation rights to future revenues or rights to be paid where the token is representing a debt instrument.

The major differentiator between traditional crowdfunding approaches and STOs lies in the fact that the latter is structured around a regulated financial security. Thus, it can be used to execute high-volume funding rounds — which sets it apart from most crowdfunding models which make use of the so-called crowdfunding exemption that allows funding rounds only up to € 8 million.

Moreover, the digital format eases the formation of secondary markets — which in turn could create a public market for a new, very interesting asset class: professional sports club or athlete security tokens. Last but not least, the digital form of the financial instrument allows issuers to create new and exciting features that create additional value for token holders. If you want to learn more, I recommend this excellent piece:

Security Token Offerings in Sports? A Pitch for Many Winners

The play’s Xs and Os:

After identifying your financing needs, compare and evaluate the available fundraising options; besides considering traditional factors such as the cost of capital, also look at variables such as the size, composition, and wealth of your supporter base as well as your owned media reach. If an STO seems like an attractive option, you can assemble a team with the required expertise in finance, legal, and tech. Together, the team can design the financial and legal structure of your issuance, design the parameters of the asset itself — including all non-monetary benefits you want to grant your “fanvestors” — and plan the technological implementation.

Who should run this play?

  • Clubs/Teams/Franchises
  • Athletes
  • Leagues maybe (e.g. they might coordinate the effort between all clubs to create a tokenized league)

Which players are actively working on this play?

Your fans. But what do you know about them? Photo source: Nicholas Green on Unsplash

IV. Tokenized Fan Identity

The fan, the mysterious creature? Many professional sports organizations lack robust data on their most important asset: their fans. That is problematic because data is the basis for successful fan engagement, marketing, and sales strategies in the digital realm. Relevant data about who your fans are, their preferences and behaviors is essential to finetune services and offerings.

Tokenization opens up the door for various fan identity plays that, depending on your goals and priorities, could be an interesting option:

Blockchain-based identity systems

Verified identity data

Almost on the opposing end of the spectrum is this version of the identity play. When issuing a tokenized security, the issuer has to comply with various regulations and, as a result, every investor will be asked to go through a so-called KYC (Know Your Customer) process, in the course of which users have to demonstrate their official ID and potentially other steps like video verification. As a result, clubs who go down this path receive verified identity data of their most engaged (=willing to invest) supporters.

The play’s Xs and Os:

Execute this play by first defining your goal: which identity data do you need to what end? Once that is clear, match this with the different models and options at hand. As identity plays will usually exist in a context — no fan will hand you data to no other avail than you having the data — you then need to define the data generation pipeline and implement it accordingly.

Who should run this play?

  • Clubs/Teams/Franchises

Which players are actively working on this play?

? (We are not aware of any standalone, sports-focused identity services; it’s mostly a feature integrated into other services)

V. Ticketing with Tokens

A paper ticket. Photo Source: Bob Walker on Flickr

A token can represent any kind of right. A ticket is, essentially, an access right. Given this, and considering the various interesting properties they come with, it’s not surprising to see ticketing solutions built on blockchain technology.

There are many reasons why blockchain-based ticketing solutions could be interesting. By applying the same principles as we did in the Fan Identity Data section, it is possible to create strong personalization with tokenized tickets. That is, tickets correspond to a wallet that is associated with a verified identity. Using so-called transfer restrictions, it’s possible to ensure that nobody without a known identity can get ahold of a ticket. If security and access control are high on your priority list, this is certainly something to consider.

Another advantage of blockchain-based ticketing is that it becomes possible to control the secondary market — as we all know resellers are a big issue on today’s ticketing market. Using the technology’s capabilities, it’s possible to implement all kinds of reselling models and enforce the rules strictly. For instance, you could set a maximum number of tickets a ticket owner could resell or a maximum markup that resellers are allowed to ask for. Of course, it would also be possible to implement commissions to the original seller on all secondary market sales per default as well.

Another interesting property of blockchain ticketing: because every ticket is a unique token, ticket forging could also be a thing of the past. If you are interested in a detailed explanation, including an overview of existing solution providers, this article is a decent starting point.

The play’s Xs and Os:

The first step to venture into blockchain-based ticketing solutions is a make-or-buy decision. As there are already plenty of companies — startups as well as established ticketing businesses — that are building solutions, it’s likely you will want to procure it. The supplier selection should be based on a solid understanding of the requirements and capabilities you are after. Once you have clarity on that end, you can start comparing potential suppliers. It should be noted, that a critical technical due diligence is in order, because all solution designs make certain tradeoffs (e.g. scalability at the cost of trustlessnes) which you ought to understand.

Who should run this play?

  • Clubs/Teams/Franchises
  • Leagues

Which players are actively working on this play?

How will we pay at concession stands in the future? Photo source: Brian Halvorson on Wikimedia Commons

VI. In-Stadium Payment Systems

If you have been observing the intersection of crypto and sports, you have likely come across news about several sport clubs accepting cryptocurrencies such as bitcoin, litecoin or ether. While that is certainly something clubs can experiment with, it is not really a strategic tokenization play because you merely offer a new (very niche) payment option to the most out-there part of your fanbase. Thus, I would rather classify it as a nice exercise for practicing purposes.

More interesting, though, is the subject of tokenized in-stadium payment systems. In recent years, many sport stadiums — such as my local Allianz Arena in Munich or the Signal Iduna Park in Dortmund — have introduced stadium cards to manage payments. Fans have to top them up and can then use them to pay for concessions and merchandise. But in the age of mobile devices, such payment systems seem outdated.

While an obvious option might simply be introducing contactless (credit/debit card) or mobile payment options (e.g. Apple Pay), there is merit to stadium-specific systems. Besides going cashless — and thus speeding up the sales processes and limiting cash-associated risks — a modern digital in-stadium payment system can also help clubs to get a better understanding of their fans by way of data generation. This also opens the door to convenient loyalty programs similar to frequent flyer miles programs.

Blockchain-based systems are not the only technology you can use to implement in-stadium payment systems, but they come with some interesting properties: fans could actually own their stadium tokens, they could transfer and trade them, and even decide to accept them for other services (imagine paying your hairdresser with your favorite basketball team’s crypto token). And if personal data is not high on your priority list, you can implement a privacy-friendly system as well.

The play’s Xs and Os:

First, define clearly what you want to achieve with your in-stadium payment system. This gives you a good idea of the technological capabilities you are after. Then, evaluate whether or not a token-based system makes sense for you at all. If the answer is yes, sketch out, in a high level of detail, the system’s functionality. This may go well beyond payments, e.g. if your goal is to incorporate a loyalty scheme. With this information, you can start looking at the landscape of potential partners and suppliers.

Who should run this play?

  • Clubs/Teams/Franchises
  • Stadium owners/operators

Which players are actively working on this play?

? (We know that some players are working on this behind the scenes but there is no public information available)

Seats in a sports stadium. Photo source: Nacho Capelo on Unsplash

VII. Tokenized Personal Seat Licenses

Personal Seat Licenses, short PSL and in Europe also known as debentures, have become a common instrument to (partly) finance the construction of new sports stadiums. A PSL grants the holder the right of preemption for a specific seat in a stadium or arena. Andrea Bianconi, lawyer, tokenization expert and my fellow at Untitled INC, recently wrote an excellent piece about tokenizing PSLs. He writes (emphasize removed for clarity):

In more simple terms, for those not familiar with topics such as blockchains and cryptoassets, this technology makes it possible to literally “pack” into a digital container/instrument (i.e. the token) the PSL contractual agreements, match tickets, rights to access special events and fan engagement options, and substantially any other contractual right.

The token could be then stored in a digital “personal wallet” by its owner (in his mobile for instance) and could be easily exchanged with other persons directly (peer to peer) fast and securely. This technology makes also possible that some contractual terms and conditions — say for instance the fact that the PSL has some transfer restrictions — can be directly programmed (i.e. encoded) in the token and automatically enforced.

For an in-depth look at the topic, read the entire piece here:

Stadium Financing and Tokenization as a Viable Alternative

I love sports and I thank my dad for teaching me its precious values. I have done it all my life since I was 5 or 6 and…


The play’s Xs and Os:

This play is to be run whenever you are considering the issuance of Personal Seat Licenses. If PSLs are an option for you, then you might want to evaluate whether going straight to a tokenized PSL can create additional value for you and your fans. Brainstorm which benefits and features you could add to the tokenized version. Then present your ideas to a sample of fans. Find out if they find the features useful. Would they increase their willingness to pay? If yes, scout the market of potential technical implementation partners, request proposals, and compare the cost to the cost of a traditional PSL issuance (including program maintenance cost).

Who should run this play?


Which players are actively working on this play?

? (We are not aware of a dedicated player; however, we dabble with the idea at Liquiditeam)

VIII. Tokenized Governance Solutions

As I highlighted in my recent article on tokenization in the sports ecosystem, fans are increasingly discontent with their teams’ management:

Many fans are increasingly frustrated with the clubs they support. In the face of an increasingly commercialized sports world, more and more fans feel as if they were merely the product in the sports economy (which, to be fair, they are). Thus, many commercialized teams have a more distanced relationship with their supporter base than ever before.

Most fans would like to have more influence over the decisions their clubs are taking. Tokenized governance systems could allow them to do just that. The simplest application is a tokenized voting: set up correctly, each token holder has a verified & unique identity on the blockchain. This enables, at the most basic form, votings that are much more robust than traditional online votings because voting with fake identities becomes a lot harder.

What exact decisions would be in scope of such a system? This, of course, is at the discretion of the issuer. It can range from non-binding votings — i.e. rather a feedback than a governance system — to binding decisions. The latter may range from trivia (design of next season’s jersey) to important matters (next season’s budget for player salaries), as the organization sees fit.

One version of token-based voting systems is called stake-based voting. In this version, it’s not one vote per token holder but one vote for every token. This way, larger investors get more weight on decisions. There are also more complex forms of tokenized governance systems that come with pre-defined voting routines, several classes of rights and other interesting features. For a glimpse at those, I recommend this and this piece (and this paper by Marcella Atzori if you want to go really deep on the admittedly nerdy subject of decentralized, blockchain-based governance).

To be sure, tokenized governance solutions don’t have to be geared towards fans (even though it is at a large scale where they provide the most added value over other governance tools such as board meetings). They can also be used to give governance rights to whichever stakeholders including, for example, sponsors or members of the association. And even leagues could use tokenized governance to govern their own affairs.

The play’s Xs and Os:

The basis for this play is understanding what you want to govern, i.e. the governance object, and what influence you want to delegate to your token holders. Once you are finished with that, you need to define the exact parameters and mechanisms of the governance systems, e.g. the voting method, frequency of votes or definition of event types that will trigger a vote. Finally, you implement the governance process — which will usually include a software roll-out.

Who should run this play?

  • Clubs/Teams/Franchises
  • Leagues

Which players are actively working on this play?

IX. Tokenized IP Rights & (Micro-)Licensing Systems

Sports content in the digital age. Photo source: Geralt on Pixabay

As media consumption habits shifted online and towards social media, the way millennial and Gen Z fans follow their sport is also changing. They watch and share highlight clips in their social feeds, they follow their stars on Instagram, and their favorite creators might not write for a sports magazine but be YouTubers, podcasters, and publish on subscription websites. Creators and media companies, hence, are looking to reach their audience on all channels with engaging content. Of course, actual content from games fits the bill. Case in point: the NBA was the first league to really adapt to the new media landscape and gave creators a lot of freedom to use league content — the result being enormous popularity amongst young fans and a very strong presence in social media. This creates challenges and opportunities for rightsholders and the way in which they license their content.

In the face of our changing media and content landscape, it is not surprising that blockchain technology and tokenization are met with interest by the copyright and IP community. Tokenizing content licenses is a potential answer that could enable a diversified rights & licensing landscape that is well-adapted to the digital & social media age. Using tokenization could, for instance, enable licensing of even small content nuggets — think a highlight dunk or the clips of individual plays that analytics services like Cleaning the Glass are using — in ways that benefit both the rights holder and the user.

Tokenized licensing schemes could, for example, automatically account for the environment in which content is used (e.g. for-profit or not-for-profit), actual viewership numbers, or even the age of the content. This way, a highlight clip from the same night, used by a professional site and creating lots of views for it, could be monetized adequately while the blogger or fan on social media could still use it free of charge. Over time, the price could decrease as the clip ages and loses its relevance — unless, of course, when it turns out to be a highlight for the ages.

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Of course, such micro rights and licenses could even be made tradeable, thereby creating an exciting new market. Imagine you could acquire the rights to all Lionel Messi goals, Tom Brady completions, or Steph Curry 3-pointers and earn money when they are shown (dollars when on TV, cents for 100,000 views on social media). While not going to materialize soon, it’s clearly a fascinating outlook.

Rightsholders will explore the avenues of tokenization as the current licensing models and practices become ever more complex in the face of a highly fragmented, digital media landscape.

The play’s Xs and Os:

The licensing & IP rights play is a long-term strategy. To this day, there are various experiments and startups in the field but no clear standards, neither in terms of process, practice, or technology. As such, it might not yet be viable to go straight to implementation (if your rights ecosystem is rather closed and tightly controlled, it might be simpler to get started). However, an analysis of the field and a scenario development exercise certainly make sense today because the development towards maturity progresses continuously.

Who should run this play?

  • Leagues
  • Clubs/Teams/Franchises

Which players are actively working on this play?

X. Tokenized Revenue Distribution Schemes

Most professional sports leagues have some kind of revenue distribution model. As I wrote about in a recent piece, there is an ongoing struggle over influence and power between teams, league officials, and athletes in sports leagues across the globe. Differences in opinion regarding how revenues should be distributed — and eventually the size of each individual actor’s slice of the pie — are a key trigger for these conflicts. Besides the political dimension, operating and managing these systems is expensive because it requires a lot of administrative work. Tokenization offers a toolkit to both automate a lot of the execution and implement a transparent and well-balanced revenue distribution system.

A balanced system should reward competitive success as well as the attention — and, thus, revenues — a specific club or individual athlete generates for the sport/league. Also, the system should account for the fact that less popular clubs (and athletes) need to exist and be sufficiently financed in order to have a marketable product.

In a tokenized system it would be possible to completely automate a transparent revenue distribution scheme. Revenues could be automatically distributed between league, clubs, and potentially athletes, using data from various sources to account for each entity’s contributions (e.g. generated attention, revenues) as well as other factors (e.g. competitive success, support for smaller markets). The distribution algorithm could be governed by all stakeholders — maybe too in a transparent, trustless, and tokenized system.

The play’s Xs and Os:

While theoretically possible to start running this play today, there are still a few hurdles. Most importantly: for now, most revenue is earned in traditional cash transactions that aren’t based on blockchain-based systems. While there are already some solutions to handle proper currency on blockchains, none of these operates at scale and it would require too many workarounds to implement a system as outlined above. Still, the promise of efficiency and transparency is real and the systems will improve over time. Even though it’s an experimental subject, I do recommend a minimum amount of preparation in the form of some scenario development.

Who should run this play?


Which players are actively working on this play?

Tokenization Plays by Player Type

For the sake of clarity and comprehensibility, I created the following table that shows the respective tokenization plays each group of sports industry actors (”Player Type”) can choose from.

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Final Thoughts and Conclusion

Full-size graphic see above

The ten plays can be roughly categorized as fan experiencefinancial or commerce plays. This illustrates the broad applicability of tokenization strategies across organizational boundaries. Hence, our advice is to take an inter-departmental approach when developing your tokenization strategy.

Furthermore, it’s apparent that market readiness varies between the plays. For some plays, the technology to implement it already exists as of today, in some cases even as a readily available service. Some of the other plays, however, are currently either in the experimental or ideation stage. The latter plays strike us to be the options with more long-term transformative potential.

Overall, the takeaway is that a) the intersection of sports and tokenization is quite busy at the moment and b) there are some very interesting opportunities for all actors in the sports business. Taking the maturity-level into account, we think that organizations in the industry should at least perform a strategic assessment of the options and begin to build foundational capabilities and know-how.

Playbook Maintenance

Because tokenization is a highly dynamic field, the playbook is a living document. I plan to update it regularly so that it reflects all relevant new developments in the market. So, in case you miss a play or are aware of an actor that I didn’t mention, please let me know. I created a thread for this specific purpose over on Reddit — but the comments here work as well.

Update History
Update 04/06/2020: added link to playbook maintenance thread and additional case (NACL prize money distribution)
Update 18/02/2020: added additional market participant
Update 31/01/2020: added additional market participants

About Liquiditeam

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A short product video

At Liquiditeam, we develop token-based financing and fan engagement solutions for professional sports clubs and athletes. If you want to learn more, explore our comprehensive webinars and workshopssubscribe to our newsletter, drop us a line at, or follow us on Twitter.

Liquiditeam is an Untitled INC venture.


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