a DAO owned pro sports club; what could go wrong?

a case study thread 🧵

the conclusion will surprise you

@krausehouse became the world's 1st DAO to buy a pro sports team, the 
Ball Hogs

luckily the ownership group was open minded to bringing a native DAO into the ownership group

they built a novel structure of NFTs to facilitate the deal

every league (best thought of as a collection of owners that appoint an exec to operate) & owner think about ownership differently

the phrase we've heard from the NBA to EPL to MLP is the same: "one throat to choke"

the owners collective want to be able to hold a single individual accountable to make changes to protect the collective

why does this all matter?

fan ownership isn't a crazy idea

but it is complicated

every fan wants to be special

but special how? is it luck? is it meritocratic? is it by spend?

the @bostonceltics (obligatory F Boston) went public in '86 only to go private again in '02

fun fact: they opened at $18.50 & closed at $27

there were mixed feelings about the approach. there we gimmicks like a "Boston Celtics Owner Barbershop" that didn't go over well w/ the majority owners

more details:

the @bostonceltics (obligatory F Boston) went public in '86 only to go private again in '02

fun fact: they opened at $18.50 & closed at $27

there were mixed feelings about the approach. there we gimmicks like a "Boston Celtics Owner Barbershop" that didn't go over well w/ the majority owners

more details: https://www.barrons.com/articles/SB1045870898333098143

not widely known, but the EPL allows for up to 10% of the club to be owned by just about any structure the majority owner would like

but owners have a cautious relationship w/ their fans, their tolerated when the club wins & vilified when they're losing

most fans want them to dump capital to win, but each owner has different "1b" goals with the club

"ownership" of any assets is actually 3 things:

- access
- equity
- governance

while all 3 are amazing, plenty of market demand exists for remixes of the 3:

Airbnb = Capital for access
Robinhood = Capital for equity
Governance Token = Capital for governance

the Ball Hogs are an experiment in Access

my fav story is of bayesianballer
 
a KH Jerry who loved analytics, started building scouting reports for the Ball Hogs… now he sits on the bench as an assistant coach 🤯

his scouting reports evolved into rotation analytics then into draft analysis & now a valued member of the club

in fact, Brian Scalabrine was even roasting him on the latest broadcast (which hit 4.3m viewers) that he's the "money guy" 😂

point is — here's a random KH contributor who had real talent & no path to a unique pro basketball experience; entirely earned with a collective ownership group

fractional ownership CREATES fandom

I'm the 1st to admit, I didn't watch the BIG3 before we became owners

if I did, it was prob Beasley highlights — but only if the algo served them to me

being a fractional owner creates your fandom

what clubs that aren't the Cowboys, Yankees, Lakers, ManUtd, don't realize is that if they want to drive the next order of magnitude fans; they'll need to bring fans deeper

here's the thing, DAOs are the primordial soup for the next generation of fractional ownership

I've been beating my head against a wall for 3 years w/ our lawyers to get a structure that works for owners / leagues / fans

it's really fucking hard

we need something new to emerge from it that can handle the reality of the tradFi world w/ the upside of DeFi

👨‍🍳