Investing in Michael Jordan & Arts On The Blockchain
Off the Blocks | Vol 94, November 19, 2019
|Nov 19, 2019|| 7|
At Proteum, we partner with entrepreneurs to develop and deploy innovative products and solutions built with blockchain technology - advising them on building sustainable companies in a rapidly changing investment, regulatory and tech landscape.
Sports, Entertainment and Blockchain
Traveling through Europe the past week, it has become increasingly clear that digital technologies are permeating through the physical world at an increasingly higher rate. Nowhere is this more apparent than the world of sports where franchises are trying every play in the book to attract and retain fans across all sports, soccer, basketball, motorsports, tennis, etc. In this world of glamor and glitz, startups are starting to play a role in creating new fan experiences both on and off the field. One such company is Globatalent that is enabling franchises to find revenue opportunities outside of the sporting event itself. In Barcelona, I caught up with my friend, Sunil Bhardwaj, CEO, Globatalent for a fascinating conversation on how he sees the opportunity with sports, entertainment, and blockchain evolving in the next few years. Below is a guest post by Sunil and an introduction to his London based company.
Can you imagine a time when you could have invested in Michael Jordan before his debut in the NBA?
Now I would be a billionaire, but what does it mean to invest in a future pro athlete? It means a lot of things, firstly that you can help a human to achieve their dreams. It means you can promote a society with values as sports promotes teammates, effort, selflessness, sacrifice, and consistency. Finally, it provides access to anyone to invest in an industry that right now they are not able to be a part of and since Globatalent appeared, this asset class was only available for private equity, venture capitalists and highly connected sports management companies.
Investing in athletes means that you can own a percentage of their future incomes during certain times of their career plus the benefits just explained before. Awesome, right?
The biggest sports management agencies in the world are handsomely paid for managing the careers of athletes. The 43 firms ranked by Forbes, have collectively negotiated an astonishing $51.7 billion in current professional athlete contracts, netting them $2.7 billion in maximum possible commissions, an increase of more than 45% from just five years ago. The top agency made $414M in fee commissions representing players in different sports.
On the other hand, an NCAA player is not allowed to get paid while universities are making millions on sponsoring and TV rights. The players themselves get a miserable grant that allows them to study. So, rather than staying for 4 years at the university, how can we not expect these players (who are willing to spend one or two years at the university) to turn pro and move as quickly as possible to play in the NBA, NFL, etc as they can make millions of dollars right away.
In Europe, young athletes don’t even think of going to the university if they are playing soccer in youth teams of top soccer clubs. They want to make all the effort to become professional and some at the age of sixteen are making more money than their parents do.
Most of these guys are under the control of managers agencies and some of them are very professional but others …. it is a different story and one that is at the heart of the genesis of Globatalent.
In the 21st century and in the era of digital collaboration Globatalent has come to change most of the old ways of this traditional industry of sport.
By being able to help athletes and clubs to monetize their assets and therefore fans will be able to buy those assets and own a percentage of future income from them. However, we have added an extraordinary change as well by allowing fans to trade the assets from the athletes in our peer to peer exchange, adding liquidity to this process.
Therefore coming back the example of Michael Jordan I could buy assets from Michael Jordan that represent 1% of his income for the next 10 years and wait for my yearly payment or by selling my Michael Jordan asset in the Globatalent exchange. I can diversify my holding s by investing in another asset by another athlete. Note that these are all uncorrelated investment opportunities.
So being a global company, Globatalent provides a unique opportunity to involve fans from all over the globe to be part of this $3 Trillion business industry.
Now some significant news from the world this week:
Tokens | What the Ethereum "Transaction Flippening" Means: A “flippening” of sorts has happened on the Ethereum blockchain. Data revealed in a Coin Metrics report this week notes that, for the first time, the number of ERC-20 transactions has surpassed the number of transactions done in ETH itself. And as popular as those tokens are, they could be on the verge of giving way to the newer class of non-fungible tokens. The surge in transactions involving these types of smart-contract based tokens could be evidence that the Ethereum network itself is at last finding its footing with users, as evidenced by a variety of actual use cases. [… Read More on Decrypt]
EU | Exploring DLT and Blockchain for Alternative Finance – A Collection of Case Studies: The European Crowdfunding Network today published a first report on the use of DLT and blockchain for alternative finance during the global blockchain conference Convergence in Malaga. To understand the ways in which blockchain can most effectively be used for alternative finance the report clustered the results into the following use cases:
Online payment and identity services
Peer-to-peer investing and investment services
Investing | Family Offices Finally Accept the Benefits of Investing in Bitcoin: Although Bitcoin’s volatility is well-documented, this has not stopped investors from adopting cryptocurrencies as a way of effecting a diversified investment strategy. Interestingly, the volatility narrative is somewhat losing its potency as Bitcoin slowly establishes stability. VanEck published a study that highlighted some of the factors that aided Bitcoin’s ascendancy as a viable investment product. One of these factors is the digital asset’s correlation to major market indices. In the study, VanEck noted that Bitcoin’s apparent disparity from established and emerging markets makes it a suitable portfolio diversification option. […Read More on CoinTelegraph]
Banking | US Crypto Firms Will Soon Have Another Banking Option: Things may be about to get a little easier for firms working with cryptocurrency in the U.S. U.K.-based Cashaa, which describes itself as a banking service platform, is about to launch bank accounts for stateside crypto firms denominated in U.S. dollars. The new accounts will be open for applications from Nov. 25, with Cashaa saying they offer full banking features with access to all nations globally, bar sanctioned jurisdictions. Crypto industry companies in the U.S., as well as other jurisdictions, have traditionally struggled to find banks that will serve them. Even if they do, accounts may be closed without notice or warning over the perceived risks of cryptocurrencies. As such, there are relatively few crypto-friendly banks allowing firms to conduct normal daily business as other more traditional industries would expect as standard. [… Read More on CoinDesk]
France | Parisian Blockchain Incubator The Garage Opens: The Garage, a Parisian blockchain incubator started by Starchain Capital’s Cyril Paglino, Dune Network’s Fabrice Le Fessant, and The Family’s Oussama Ammar, opened doors recently. It requests five percent equity—or five percent of capital—and in return promises to “do everything to make you succeed”, and offers “access to the best blockchain ecosystem in Europe.” The Garage promises to help its community with a variety of tasks, including product, engineering, press relations and marketing and gives entrepreneurs up to 60% equity in companies that it’s developed in-house. [… Read More on Decrypt]
The Malta AI & Blockchain Summit. Photos: Chris Sant Fournier
The recent Malta AI & Blockchain Summit presented a number of topics involving the protection of personal data, the swift creation of transactions on a secure decentralised system as well as the capacity to revolutionise the way art is created.
‘Blockchain and the Arts’ was a segment that welcomed experts from across the globe and invited them to speak about their areas of expertise within the blockchain niche, linking it to the arts in the form of music, painting, graphic design and other areas of expression.
Young people create a lot, blockchain and timestamping within the blockchain can simplify the process.
Maria Carola, CMO, Guarda Wallet
Proteum is a global blockchain investment and advisory firm that works with public, private and start-up companies to help them transition into the world of blockchains and decentralized applications. We help companies strategically build their ecosystem and unique capabilities so that they can own and control their future. ProteumX, our accelerator program, invests in and accelerates the time to market for startups and emerging ideas based on blockchain solutions.