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Jul 12, 2023

Ticketing: Crypto, NFT markets dinged but sports still eyes blockchain ticketing, fan experience solutions

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"Credenza" is both a word most used by mothers-in-law and the name of Sandy Khaund's blockchain fan experience company.

Credenzas are often associated with storage; where is that bowl sitting that you drop your car keys in when you get home? In this case, Khaund's Credenza is storing a person's identity, as well as the assets, actions, and attributes specific to his or her unique identity, a kind of "live CRM" as he referred to it, that could help sports teams serve their fans better and more efficiently.

Khaund's project is one of the blockchain-powered efforts plugging along in the background of the crypto winter and the NFT market's plunge in interest, relevance and value — it was widely reported that the NFT market had lost 97% of its early 2022 value by last winter. Fan experience-related blockchain efforts centered on universal identity, like Credenza, and blockchain ticketing projects are still of interest to the sports world despite the tech's sudden fade into the background and AI's equally sudden seizure of the zeitgeist. The Professional Fighters League, Formula One and SI Tickets have all recently launched NFT ticketing programs on blockchains.

"I said this 12 months ago, six months ago, and I’ll say it again: I’ve never been more bullish about the blockchain," said Khaund, who sold his blockchain ticketing company called Upgraded to Ticketmaster in 2018. "The public love that we saw two years ago was unsustainable, and I think we all knew it."

With almost no fanfare, Khaund has created Credenza, which has raised around $2 million total from investors. Its main product, Passport, serves as connective tissue across all the digital and real-world fan experience touchpoints, like ticketing, concessions, merchandise, sports betting and ingress.

Passport, which runs on the Polygon blockchain, gives each fan a blockchain address and QR code unique to them that identifies all the stored value they’ve accumulated as a fan, whether assets (a coupon from a sponsor or exclusive offer from the team), actions (their purchasing history or away game attendance), or attributes (are they a season-ticket holder? Is it their birthday?).

For Passport to be most effective, it would require integration with the team's various partners, whether online retail merchants, concessionaires or point-of-sale devices, to gather the data to create the complete profile of each fan. It only takes five lines of Java code to make any website, including a team's or league's, Passport-enabled. And any (team-issued) cellphone, scanner or point-of-sale device can be made into a Passport QR code scanner, enabling the device to instantly know the pertinent info about that particular fan and react accordingly. Khaund is working with the St. Louis Blues on deploying Passport for the 2023-24 NHL season.

"It's live CRM," he said. "It's what you do online, but now you’re bringing it in live."

Improving something already in existence is also the modus operandi for True Tickets, which isn't building a new ticketing company powered by blockchain, but rather creating an enforcement engine for rights holders that can be coded into the ticket at creation and integrated into any ticketing system.

True Tickets has been adding blockchain technology to tickets for five years. It's found willing experimenters in the theater and performing arts industries, an event sector that isn't dominated by any one major ticketing company. True Tickets is partnered with Tessitura, which handles the actual ticketing; True Tickets’ role is to append rules — decided on by the theaters and promoters — to the tickets that Tessitura sells. In some cases, that includes "ethical resale," or encoding a conditional transfer fee, critical as the not-for-profit arts community has long rejected the secondary market, according to Matt Zarracina, co-founder and CEO of True Tickets.

Zarracina's company has had numerous conversations with sports teams and leagues, especially the latter. They’re often interested in whether True Tickets could provide a common rules system applied to multiple ticketing providers for one league. No takers yet, though.

"It's the first time it's gone from theoretical to practical," Zarracina said of the Tessitura deal. "A lot of blockchain and NFT, there is always this future vision. But to achieve a future vision you have to have something practical that you get into market and see how it works. We want to learn from it and explore other possibilities and capabilities."

One result of the crypto winter seems to be increased pragmatism around blockchain, especially ticketing. Pet Berisha, author of the Sporting Crypto Substack newsletter, recently questioned the intentions of the big ticketing players that are interested in blockchain, while pointing out that blockchain ticketing still has not been tested at scale in the sports world.

"Blockchain itself is not a singular technology, it's actually comprised of multiple other technologies," said Zarracina, and some aspects of that tech will permeate whatever solution comes to market.

Thus, SI Tickets will be another valuable test case to track. It's one of the largest sports-adjacent brands to roll out blockchain ticketing with its Box Office product. Running on the Polygon blockchain, Box Office enables event organizers to create NFT tickets without wading into the technology's backend details. In this case, blockchain gives event organizers the ability to change the ticket (which lives in either the SI app or the fan's digital or crypto wallets), whether its form or content or any number of other options, before, during, or after an event.

"We think this becomes the onboard for everybody who has maybe been intimidated by blockchain and the experience those markets have created," said SI Tickets CEO David Lane.

Sports Illustrated sees huge opportunity. SI Tickets is starting with small event organizers, but Lane said they would like to become a primary ticketing option for bigger sports clients. Lane pictured the Knicks winning an NBA championship and Knicks ticket holders immediately receiving a commemorative SI magazine cover.

"We believe there are opportunities out there, on-chain, for SI, and so we are actively looking at those opportunities," he said, "but as a whole, not just with what SI Tickets is doing."

Bret McCormick can be reached at [email protected]. Follow him on Twitter @Bretjust1T.

A big day for the Buffalo Bills; Another big day for Rose Zhang; Jody Allen still not engaging on team sales and from intern to Big Ten COO.

SBJ I Factor presented by Allied Sports features an interview with Danita Johnson, president of business operations for D.C. United and a member of Sports Business Journal's Forty Under 40 class of 2023. Johnson talks with SBJ's Abe Madkour about learning how to sell and to not fear change, becoming an effective manager, the importance of empathy as a leadership trait, and what to look for when evaluating job candidates. SBJ I Factor is a monthly podcast offering interviews with sports executives who have been recipients of one of the magazine's awards, such as Forty Under 40, Game Changers and others.

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