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

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

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?

"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

👨‍🍳