What's factoring into the growing trend among professional athletes and sports teams to use bitcoin as a means of exchange?
The Sacramento Kings of the National Basketball Association (NBA) recently made headlines when their owner Vivek Ranadive announced that in the near future, anyone in the organization (players, coaches, and staff members) who wants to will be able to receive a portion (or all) of their salary in bitcoin. Soon, any player on the Kings who wants to be paid in bitcoin will easily be able to do so, despite the past difficulty other professional athletes have encountered being paid in bitcoin.
Pay Me In Bitcoin!
Enter Russell Okung, a Carolina Panthers Offensive Tackle in the National Football League (NFL) who famously tweeted, “Pay me in bitcoin,” in May 2019. Okung made headlines in December 2020 as the first professional athlete in any major U.S. sport to be paid in bitcoin. Technically, Okung was not directly paid in bitcoin: he converted half of his 13-million-dollar salary to bitcoin through a company called Zap. The company owns Strike, the exchange product that enables the conversion, which also allows individuals to easily convert funds from fiat to bitcoin. Soon, anyone will be able to be “paid in bitcoin” like Okung, as Strike has announced early access to this paycheck conversion program. When Okung did this, it set a new precedent for other professional athletes to do the same.
When Okung converted $7.5 million of his salary to bitcoin on December 29, 2020, the price of bitcoin was approximately $27,318.00. Bitcoin’s price has more than doubled since then, meaning he has made a large profit. His total salary including bitcoin profit would make Okung one of the highest paid offensive tackles in the NFL and one of the top 25 highest paid players!
Not Paid In Bitcoin Directly
To reiterate, Okung’s salary was not paid directly in Bitcoin. In 2019, NFL Quarterback Matt Barkley tried to persuade his NFL teams (the San Francisco 49ers and the Cincinnati Bengals) to pay his contract in bitcoin, but he was also unsuccessful in his pursuit. It is tough being the first to do something. My theory of why these requests were historically met with negative responses stems from the need for the teams themselves to carry bitcoin on their balance sheets. If you don’t have bitcoin on your balance sheet, how can you use it to pay your employees? Just 4 months ago, it was unrealistic for a company to have bitcoin on its balance sheet, accept revenue in bitcoin, or pay its employees directly in bitcoin, but it is becoming more prevalent as time passes.
Companies With Bitcoin On Their Balance Sheets
Bitcoin has recently had a high rate of institutional adoption. When Okung converted his salary to bitcoin at the end of 2020, only a handful of companies had bitcoin on their balance sheets (e.g., MicroStrategy, MassMutual, Galaxy Digital Holdings). Since then, MicroStrategy hosted a “Bitcoin for Corporations” event in February 2021, which was designed to educate corporations on how to add bitcoin to their balance sheets. In total, 6,917 companies attended the conference.
The notion of companies using and transacting in bitcoin is becoming more mainstream, which in turn is accelerating the rate of Bitcoin adoption in the corporate world. In 2021, we have seen the first S&P 500 company add Bitcoin to its balance sheet (Tesla), and recently, Time Magazine announced that it too will hold bitcoin on its balance sheet and be paid in bitcoin for a new crypto video series. According to bitcointreasuries.org, 53 publicly traded companies now have bitcoin on their balance sheets.
Bitcoin In The Sports World
The Sacramento Kings have a longstanding claim to being one of the most bitcoin-forward teams in professional sports, becoming the first team to accept bitcoin in 2014. Several other professional sports franchises are starting to adopt and accept bitcoin as a means of exchange. For example, in mid-March 2021, the Oakland Athletics, a Major League Baseball team, announced that they would accept Bitcoin for season suites (which seat up to six people). The team’s administration decided to accept a single bitcoin for the full-season suites no matter how much bitcoin fluctuates in value. “We’re going to hold it. We’re believers in it, and hopefully it continues to go up. Maybe we can sign some big free agents with some of the proceeds… who knows?” said Dave Kaval, the team’s president.
The Dallas Mavericks of the NBA started to accept Bitcoin as payment for game tickets and merchandise via BitPay in 2019. “We want our fans who would like to pay with bitcoin [to have] the opportunity to do so,” said the owner of the Dallas Mavericks, Mark Cuban. If teams start accepting bitcoin as revenue and include it on their balance sheets, direct payment options for their players will be far more accessible.
The Sacramento Kings Will Allow Their Players, Coaches, and Staff To Be Paid In Bitcoin
The Sacramento Kings are set to become the first major sports franchise to offer a bitcoin payment option to all players and staff. “I’m going to announce in the next few days that I’m going to offer everyone in the Kings organization, they can get paid as much of their salary in bitcoin as they want, including the players,” said team owner Vivek Ranadive. This means that any Sacramento Kings player who wants to be paid in bitcoin will be able to directly (with no conversion).
The Kings are able to do this in large part because they have been accepting bitcoin as payment for tickets and merchandise for 7 years now. The price of bitcoin in 2014 was under $1,000.00, which is far lower than the price today. If other trailblazing athletes such as Russell Okung and Matt Barkley keep demanding to be paid in bitcoin, other teams will first have to first buy and hold bitcoin on their balance sheets before they are able to pay their athletes directly in bitcoin. Imagine the fiscal gymnastics that the LA Lakers would have to perform on their dollar-denominated balance sheet should Lebron James make the same “Pay me in bitcoin” demand. The concept may not be so far-fetched: we have seen the impossible (for Okung) translate into acceptance (at least for Sacramento Kings players, staff, and coaches) in less than 4 months.
“Life moves pretty fast. If you don’t stop and look around once in a while, you might miss it.” - Ferris Bueller’s Day Off
The Four-Minute Mile
Okung’s breakthrough story of being “paid in bitcoin” and the Sacramento Kings’ recent announcement allowing their employees to be paid in Bitcoin remind me of Roger Bannister and the running of a 4-minute mile. Most people know the basic story, but in case you don’t, here is a refresher: running a mile under 4 minutes was thought to be impossible before Roger Bannister accomplished the feat on May 6, 1954. But then, 2 months later, John Landy became the second athlete to run a 4-minute mile. The feat went from impossible to accomplished by two different athletes in 2 months!
Impossible To Possible
When the impossible becomes possible, suddenly, that mental barrier resisting the achievement is no longer there. This was true with the 4-minute mile, and it is also true for athletes wanting to be paid in bitcoin. From Okung having to convert his dollars to bitcoin 4 months ago to the Sacramento Kings announcing direct bitcoin payment of salaries, we are watching the future unfold in real time right before our very eyes.
Look where Bitcoin adoption has come in just the past 4 months, let alone the last 4 years. Bitcoin itself has only been around for 13 years, and it has already become the fastest asset to achieve a trillion-dollar market capitalization. If the price has risen from $1.00 per bitcoin in 2011 to $60,000 in 2021, imagine where bitcoin adoption will be in another 10 years. Adoption is happening in real time. Their choices regarding bitcoin will determine which side of history these teams are on.