How NFTs Disrupt the Sports Industry | by Tendai Tomu | July 2022
Sports NFTs offer new ways for enthusiastic fans to support and interact with their favorite athletes.
Highlights
- NFTs have become mainstream with sales exceeding $ 27 billion in 2021. Despite all these successes, the full uses of NFTs have not yet been fully explored and exploited.
- Sports teams can give fans their NFTs that give holders special club benefits, from getting players’ autographs and jerseys in limited editions to exclusive discounts on match tickets.
- New and future athletes who need funding can use NFTs to bridge the gap. This can be useful in sports such as motor racing, where the cost of taking up the sport can be huge and limiting.
Non-fungible tokens (NFTs) have seen exponential growth in recent years, and have disrupted and brought the necessary innovation to various industries such as art, games, music and sports.
We can now agree that NFTs have become mainstream, with sales of $ 27 billion in 2021, including Crypto Punk # 8857 which sold for $ 6.63 million, as well as Beeple’s Weekdays, the first 5000 days, which was auctioned off for more than $ 69 million.
But with all these leaps and successes that NFTs have achieved over a short period of time, the full use cases of NFTs have not yet been fully explored and exploited.
Many critics have argued that along with value, NFTs should provide some form of benefit. The recent cryptocurrency and Terra Luna failure have revealed some of the shortcomings of projects in the crypto area that seem to be good at providing huge amounts of funding, but which are underperforming when it comes to performance. Even Binance Co-Founder and CEO, CZ, has recently urged the crypto community to go back to building real products that people use.
One of the areas that NFTs have begun to invade is the sports world. Sports NFTs gives loyal fans new and exciting ways to support their favorite athletes and teams, and at the same time, sports organizations will benefit from a new revenue stream by issuing digital collectibles.
Understand Sport NFTs
Non-fungible tokens (NFT) are a form of digital assets that are built and run on a blockchain. They are often referred to as crypto / digital collectibles. Each NFT is unique in its own way and can either be completely digital or designed to represent a tokenized version of a real-world object. If you are interested in learning about NFTs, check out this article where we have explored the subject in detail.
Sports NFTs are one of the latest uses of utility NFTs that the technology and sports industries are currently exploring. These NFTs offer new ways for sports fans to interact with and support their favorite athletes and teams. An easier way to understand sports NFTs is to imagine them as traditional basketball or football player cards, but in digital form.
With blockchain technology, such physical cards are transformed into various forms of NFTs that sports enthusiasts can collect – memories, gifs, video highlights, game tags and much more. In addition, they are tradable on NFT marketplaces, including leaders such as OpenSea.
Sports NFTs can also be made to serve as a form of fan club membership that gives holders exclusive benefits and perks, such as access to meet-and-greet events with athletes. This has already begun to happen in other fields outside the sports world.
One such well-known NFT collection that offers its holders benefits is the Bored Ape Yacht Club (or BYAC). Such benefits include real-life events with celebrity guests and artists. BYAC counts celebrities like Justin Bieber (BAYC # 3001), Neymar Jr (BAYC # 6633) and Kevin Hart (BAYC # 9258) among its celebrity collectors.
How sports fans benefit from NFTs
Deloitte Global, the world’s leading auditing and insurance company, predicts that NFTs for sports media will generate more than $ 2 billion in transactions in the 2022-22x for 2021. The auditing firm estimates that between 4-5 million sports fans globally will have bought or been given an NFT sports collector object by the end of 2022. This means that the contribution of NFTs to the sports field will be difficult to overlook.
Sports NFTs offer new ways for enthusiastic fans to support and interact with their favorite athletes. As NFTs continue to evolve, there are several practical applications for sports NFTs, all of which are poised to transform the industry in exciting ways. Loyal fans can demonstrate their passion by holding sports NFTs, while sports clubs and their athletes can offer fans long-term value through NFTs growing tools.
Digital collectibles
Sports collectibles are new ways for fans to collect player cards and even video highlights from games. One of the most popular collections is the NBA Top Shot, a collection platform for basketball that is officially licensed by the NBA. The platform uses blockchain technology to make conventional sports trading cards digital and lets fans trade video clips of legendary NBA game highlights. For example, a video showing LeBron James imitating the famous Kobe Bryant can was auctioned off for nearly $ 400,000 in 2021.
Digital access tokens
In addition to being treated as digital collectibles, NFTs can be integrated into live sports games as virtual access tokens. For example, fans willing to pay for NFT tickets can unlock VIP videos from stadium player cameras, or listen to behind-the-scenes conversations between the team and coaches.
NFTs also share a close relationship with another innovative development in the same blockchain area, the meta-verse, an embodied Internet that is expected to grow at an exponential rate over the next few years. Metaverset enables virtual users to seamlessly move their digital identities and assets in the form of NFTs across different virtual worlds. NFTs enable digital elements in the metaverse to be uniquely identifiable, purchaseable and interchangeable on NFT marketplaces.
In sports, fans can take advantage of such innovations to interact with favorite athletes as well as other supporters directly in the metaverse. Fans can even use NFTs to sponsor their favorite players. The use of NFTs for ticket purposes can be combined with metaverse and used to allow foreign fans who can not participate in the games personally participate in unique viewing experiences.
Some sports teams may issue fantokens in addition to NFTs that give holders special club benefits, from getting players’ autographs and jerseys in limited editions to exclusive discounts on match tickets. For example, the Portuguese football club FC Porto entered into a partnership with the flagship crypto exchange Binance to issue fantokens and NFTs in 2021.
Gaming
One of the new uses for NFTs is in online sports betting (eSports) as a fantasy sport. For example, Sorare is a fantasy football game that is fast becoming popular with players, and it includes NFTs in the game. The way the game works is that fans can buy, collect and exchange NFT playing cards that are used to manage a virtual team and compete in tournaments. Based on the football players’ performance in real matches, the NFT cards will receive or lose extra points. Sorare has partnered with world-class football clubs such as Barcelona, Liverpool and Real Madrid to bring players onto their NFT cards.
How can the sports industry benefit from NFTs
NFTs are revolutionizing the whole concept of sports memorabilia by letting fans own ownership of favorite players’ cards and even game video clips. They provide an opportunity for sports clubs and teams to build and maintain long-term relationships with fans.
NFTs are also changing the way sports organizations interact with their followers, allowing teams to increase fan engagement by offering exclusive membership privileges and sometimes even a mechanism for weighing in on important governance decisions.
Personal branding for athletes
Individual athletes can issue their own NFT collections to actively engage with their fan base. Like trading cards, NFTs for athletes act as a connection between the player and their devoted fans. For example, fans can enjoy NFTs modeled after their favorite players, and they can even use the NFTs as social media profiles and posts to show off their colors.
With NFTs, athletes can still maintain their intellectual property rights to their works and performances by issuing NFTs themselves. As NFT creators, they can receive royalty fees from the resale of their NFTs, which can provide reasonable leeway and wealth when they retire.
For example, Binance recently announced in a press release that they had signed a multi-year NFT partnership with the Portuguese footballer Cristiano Ronaldo. The partnership involves creating a series of NFT collections for sale exclusively on the Binance NFT platform. The first collection will be released later in 2022 and will feature designs created in collaboration with Ronaldo.
A new revenue stream for athletes and sports leagues
The issuance of NFTs can also provide an additional revenue stream to athletes and teams. Traditionally, a sports business has most of its revenue from ticket and merchandise sales, media rights and sponsorship. By using NFTs, sports teams can choose to tokenize game tickets, stream live games to token holders or organize exclusive NFT holder events in the metaverse, even during a pandemic.
New and future athletes who need funding can use NFTs to bridge the gap. This can be useful in sports such as motorsport, where the cost of taking up the sport can be huge and limiting. A good example of such an innovative fundraising intervention using NFTs is Apex Doodles.
Apex Doodles is a project that allows karting fans to follow the journey of a young and upcoming Formula 4 racer and artist, Oscar Joyce. Benefits for holders of Apex Doodles NFTs include access to an invitation-only Discord channel, souvenir airdrops, including physical parts of Oscar’s maps, as well as potential Oscar-winning meet-and-greetings.
Stay tuned for our upcoming interview with Oscar, as well as the launch of Apex Doodles Genesis NFTs which will soon go live on OpenSea.
Conclusion
The number of new and exciting NFT applications in the sports industry has increased rapidly, and this trend is likely to continue. NFTs and other related digital assets introduce new ways for teams to connect with their loyal supporters, as well as unlock new sources of revenue. While sports fans still enjoy ownership, trade and use of their unique physical sports memorabilia, today’s sports NFT use goes far beyond just being digital collectibles.
