The blockchain to identify the best opportunities

First, these innovative technologies can be leveraged to identify, by both clubs and sponsors, the most cost-effective contracts for each form of business, in terms of affinity and economic value.

Large sports clubs can make the most of smart contracts. The advantage of not having to manage and control the correct performance of the clauses preparatory to the termination of the contract (thanks to the blockchain), translates into a huge saving of time and expense.
The stipulated sponsorships can be much more detailed also from a geographical point of view: hyperlocalising the investments, from an economic point of view, is considerably more advantageous.
Speeding up processes and reducing costs are the first two steps towards the future of sponsorship, and the resulting benefits could also benefit the individual athletes they are aimed at.

Smart Contracts and sponsorships of the future

The first key step in establishing a contract, entered into a distributed registry, is to find the most appropriate sponsorship format. Clubs and sponsors identify the partner that best meets their business needs from a database. Once the eligible parties have been identified, the negotiation phase begins, in which the key conditions for the parties to sign the agreement are established. Only once these conditions are determined, the contract will be registered on blockchain and will acquire legal validity. Sponsors, in this way, can identify the most suitable clubs in a timely, selective and cost-effective manner. The same applies to clubs.

Another advantage is found in the possibility to establish a priori thresholds of expectation: for example, the definition of a minimum turnout of participants at the event below which the sponsorship is considered ineffective. If the assumptions set out in the contract are not met, the next stage of the contract will not take place. For example, if attendance at an event does not meet the established criteria, the sponsor may pay a proportionately reduced payment. Conversely, in the optimistic event that the thresholds are abundantly exceeded, clubs can receive increased rewards. It is up to the blockchain to transparently monitor the successful outcome of negotiations.

Blockchain for athletes and clubs, culture and entertainment

Today, contracting through distributed platforms and smart contracts is primarily leveraged by clubs and businesses.
In the not too distant future, however, the model could be extended to individual athletes as well as those in the arts and culture sector. Artists, journalists and those who benefit from copyright, through smart contracts, can sell their products avoiding labels and therefore interacting directly with their audience.

Small sports clubs, which are struggling in the traditional sponsorship market, may find interesting new opportunities through blockchain. For example, the technology can help local sports by facilitating the selection of local businesses for clubs in the same geographic area. In this way, profits would grow for “smaller” realities that can take advantage of the investments of local businesses.

Another area of application is advertising space on the sidelines at sporting events. These, often, remain unsold due to the very long time required for the negotiation and conclusion of agreements, as well as due to the high costs of the long chain of intermediaries. Failure to sell space translates into a substantial economic loss. Through blockchain technologies the time of negotiations can be shortened considerably, and up to a few hours before the event it becomes possible to sell advertising space. And through the elimination of third-party figures, costs can be significantly reduced, while increasing the transparency and security of the partnership.

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[:it]L'articolo The Smart Contract in the sport and the entertainment proviene da Chainon.[:]

The advantages of Smart Contract

The main advantages of Smart Contract are:

– independence from intermediaries
– immutability of the code
– economic saving
– simplification of operations
– great precision and reduction of the margin of error.

How Smart Contract works

The practical operation of the Smart Contract consists in the translation of a traditional contract into a code capable of systematically verifying the existence of certain conditions preparatory to the implementation of other consequent conditions. In other words, only when condition A is met then it is possible to proceed towards the implementation and development of condition B. Smart Contracts, therefore, aim to check and subsequently transcribe, according to the “if/then” logic, the conditions agreed by the contractors and defined by the articles of the contract.

The first phase of drafting is the only one that requires monitoring and IT support. In fact, the translation of the contract into code requires the assistance of an expert who has the necessary technological and legal background. The individual clauses of the contract are signed at the stipulation stage. The self-executing process, at this point, guarantees immutability and thus makes it impossible to revoke the transaction as well as unforeseen, arbitrary changes and modifications after the fact.

The blockchain, in a perspective of synergy between the two technologies, is the ideal technical support for Smart Contracts, as it facilitates the creation of consensus between the parties. Not only that. In the stipulation of traditional contracts, the intervention of an intermediary is always necessary to guarantee and protect the contracting parties. In the case, instead, of smart contracts, the blockchain can be automatically resoloutory, being essential characteristics of its functioning the immutability and the control by all the components of the network, of the data that are inserted each time.

Evaluation and validation: the PoW mechanism

The evaluation and therefore validation of the contract will be the work of the platform users through the PoW (Proof of Work) mechanism. Within the contract the specifics and details can be as many as necessary to meet the needs of all parties. At the basis of the contract there are rules determined by both parties, which govern all exchanges, protecting transactions against any possibility of modification or intervention by external agents. The resolution of any disputes must always be foreseen and predefined at the time of the stipulation, regulating also the procedure for the eventual dissolution of the contract.

The marriage between Smart Contract and blockchain, therefore, can facilitate the initial phase of the negotiation: the protection of the parties is extremely simplified and guaranteed, allowing to consult an intermediary figure only in the phase of translation of the agreement into a string of code. Subsequently, it will be an app that will oversee the proper conduct of the operations required by the code. The app notifies the parties in a timely manner that one or more crucial clauses are fulfilled. The two parties then give their consent to proceed with the next steps.
All the operations take place in an automated way; for this reason they do not require the control of a correct execution by an external super partes controller.

The presence of an IT and legal expert

The critical issues that can be encountered in this contractual methodology lie in the need to use an IT expert. This specialist must be able to correctly transform the agreement into a cryptographic code (the code string), in the initial phase of negotiations.
The appropriate legal preparation of this professional figure is aimed at ensuring that possible divergent interpretations of the articles are avoided in subsequent litigation. For the proper conduct of the various stages of the agreement, any possible hindrance or misunderstanding must be avoided.

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To subscribe to this first smart contract were Volleyball League, the consortium that brings together the teams participating in the men’s volleyball leagues of Superleague, Series A2 and Series A3, and ChainOn, the first marketplace for buying and selling sponsorship and media rights in sports and entertainment that operates through the use of proprietary algorithms, blockchain and artificial intelligence.

The legal representatives of the two parties remotely signed a smart contract, or digital contract. By virtue of this first, historic, smart agreement, ChainOn has become an Official Innovation Partner of the Volleyball League.

The agreement provides free access until the end of the year to the www.chainon.it marketplace for the league and its 53 member clubs, which will then be able to submit their sponsorship deals on the platform.

To mark the occasion, the ChainOn/League Volleyball Innovation Award was established, which will be given to the league club that has most distinguished itself during the season in the area of innovation.

As part of the agreement, ChainOn was featured on the courtside LEDs at the 2022 Italian Cup Final Four that saw the Perugia team triumph.

The signing of this agreement, which took place on Chainon’s platform, opens the door to a new scenario for sponsorships, sports and otherwise.

How ChainOn works and its features

ChainOn is a peer-to-peer (P2P) trading marketplace , based on the use of blockchain and artificial intelligence, which, in the ambition of its creators, wants to revolutionize the market for sponsorship and media rights.

The
blockchain
is a very secure cryptographic system and allows “smart” contracts to be drafted that can be negotiated with the same guarantees as traditional ones: in very little time (days, not months) and automatically managing variable consideration. All with a much reduced cost of intermediation compared to the traditional offline market.

The platform www.chainon.it is online as of March 4, 2022. It is a restricted-access “showcase” in which investors (companies) and sellers (clubs, federations, athletes, intermediaries) have access to a growing database of sponsorship opportunities. Investors and sellers can meet virtually, exchange information, negotiate and conclude digital sponsorship contracts.

Will blockchain also take hold in sports sponsorship and media rights?

The world of sponsorship has often lagged behind technological progress. But a service such as the one launched these days requires-as Giovanni Palazzi, Ceo and Founder ChainOn, states. New paradigms, based on the transaction speed, the possibility of demobilizing the stock of unsold sponsorship rights (a market estimated to be worth about 100 million euros a year in Italy). All with commissions that today on ChainOn are 1 percent of the sale value, compared to the average 15 percent charged with traditional brokerage. All without counting the additional savings in search, negotiation, contracting and management costs.

A digital marketplace like this overcomes some of the traditional limitations of the sponsorship marketplace as we have known it to date, which in my opinion have greatly limited its development:

• First and foremost, the implementation, negotiation and management (including any litigation) of contracts. The implementation and negotiation of the sponsorship contract alone can be very complex. How many times have I been busy for weeks with the contracting party!?!! The innovative solution offered by ChainOn is the Smart Contract, a digital contract with legal validity that simplifies the process and also allows for: the breaking down of national borders for signing and payments; the security of collections on due dates; the possibility of automation of performance-related fees; and the rapid handling of disputes through online arbitration.
• opacity, because a marketplace is necessarily characterized by transparency-both of supply and prices.

What are the opportunities for investors (companies) and sellers (clubs, federations, athletes, intermediaries)?

Among the main opportunities that an offer like this promises I highlight these four:

1. make a large database of sponsorship (and later media rights and licensing) opportunities available to investors and rights sellers;
2. suggest to vendors the product sectors and companies that may show the most interest in their offerings, identifying, for example, companies that sponsor in his or her region with a specific spending cap, or identify sponsors that have been contracted by a competitor;
3. show potential buyers the partnership opportunities with higher Return on Investment (ROI) in a given area or which entities sponsor a competing company;
4. thanks to technology, sponsorship rights will be able to be turned into digital tokens exchange able on the Internet for cryptocurrencies. A Token allows an investor, for example, to expose three minutes of an advertising message on the LEDs of a sports competition. After purchasing the token, the buyer can either advertise his product or resell it again at a higher price than the purchase price. Tokens are a lever to broaden supply and demobilize significant amounts of resources.

What’s next

Today I am unable to say whether ChainOn’s selling proposition will be a success, but it could represent a revitalization opportunity for sports at every level. This is a revolution from which even smaller clubs and even grassroots sports associations could benefit, as they will be able to access the platform and publish their sports sponsorship deals in blockchain, to propose them to even much larger investors than those with whom they usually collaborate.

But the revolution promised by ChainOn is not limited to sports: in the future, the system may also be extended to the world of entertainment and culture.

I personally expect that blockchain can, at least in the medium term, decisively change the process of buying and selling sponsorships that we currently know.

Blockchain will be able to enable supply and demand matching, negotiation, and contract signing in real time with very high savings on commissions through disintermediation, benefiting smaller sellers in particular. All of this is done by streamlining processes and reducing costs.

Let the revolution begin….

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Alexander Donato

Senior Advisor | +20 years experience in Marketing and Sponsorship Management | Sports Manager

[:it]L'articolo Blockchain, smart contracts and AI poised to revolutionize the sponsorship market proviene da Chainon.[:]

The strengths of Chainon, born from STAGEUP and Par-Tec S.p.A., are mainly three: professional services, efficiency and safety. With the new platform finding your partner will become easier, faster, transparent. The digital marketplace Chainon impacts on a market that today moves 800 billion dollars. The sports segment alone reached the value of 488 billion dollars in 2018. Not only that. It fits into a context of great acceleration of the ongoing digitization processes, and reinforced by the global health emergency. Just think that the value of the only digitization processes related to sport in the World, which today are worth 11.9 billion dollars, will reach, in 2025, 35.7 billion, with an increase of +222%.

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