What do NFTs have to do with golf? Our latest podcast explains | Golf news and tour information
At the Presidents Cup, the PGA Tour announced an agreement with Autograph, a company founded by Tom Brady, with Tiger Woods on its advisory board, to host NFT platforms for athletes and professional leagues. The deal has been in the works for several months, and it will be several months before the official launch, but the basic headline here is that “digital collectibles” from the Tour will be available for purchase as early as next summer.
If you’re like many people, you have only a vague idea of what anything in the previous two sentences meant. This week’s Local Knowledge podcast focuses not only on the Tour’s deal with Autograph, but on NFTs in general, how they fit into the professional sports landscape, and how they can play a role in different parts of golf – and not just the top rankings .
NFT stands for “non-fungible token”, and the key word there is “fungible”, which in an economic context simply means “exchangeable”. A $10 note is fungible because it can be changed for two $5 bills, and a gold bar is fungible because it has a market value and can be exchanged into dollars or euros or pounds. But what about a painting by a famous artist? Sure, you can assess the value of the paint used and the canvas and the frame, but none of that comes close to measuring the actual value of the painting, whose artistic merits mean it’s worth far more than the sum of its components. It is non-fungible.
In the world of blockchain, cryptocurrencies are fungible. If I own one bitcoin, I can exchange it for US dollars today at the current market value. But an NFT is non-fungible, because it comes with a commodity—like the artist’s painting—whose value is determined by quality and desirability, and exists outside the value of the code that composes it. Hence non-fungible token.
As more of our lives take place online, NFTs may not be going anywhere anytime soon. First, they act as status symbols, and in that respect are no different than a Rolex watch, which is more about owning a Rolex than effectively telling the time. For another, as copyright law catches up with NFTs and digital spaces become more critical to our lives, it may be that owning an NFT actually becomes something like owning physical property in the analog world.
It is easy to imagine how this plays out in the sports world. When we talk about “digital collectibles”, it can mean anything from artistic renderings of big moments, or – in the case of sports leagues – photographs and highlights. The NFL and NBA have deals with a company called Dapper Labs, and MLB works with Candy Digital. In these cases, you can “own” certain games, or images, for a price, and because these leagues all have unions, the profits are shared between all players. Individual players can launch their own NFTs, but the caveat is usually that it can’t involve on-field moments, since those highlights are owned by a league.
When the PGA Tour’s NFT platform launches, profits will tilt towards the players who bring in the most revenue, in line with recent guidelines put in place to stop defections to LIV Golf. As with the other leagues, however, the Tour’s Autograph platform will be the only place anyone can own an on-court collectible from a Tour event.
When discussions with Autograph began, there was a bull market for NFTs. Candy Digital, MLB’s partner, was valued at $1.5 billion, while Dapper Labs, home of the NBA and NFL, reported $700 million in sales in 2020, double the previous year. In total, the NFT market was worth around $17 billion in early 2022. Then, with the crypto crash, everything changed; today that market was valued at $470 million, down 97 percent, and NFT sports sales had fallen across the board.
Today, it is uncertain whether that value will rise again. The faithful point to the boom-and-bust cycle of cryptocurrencies in general, insisting a resurgence is on the way, while others believe the floor has fallen out permanently. The future of NFTs is unclear, but there are signs that they may be relevant to golf in ways that go beyond the volatility of the markets. LinksDAO, for example, is a group trying to crowdfund the purchase of an actual top-100 golf course via NFTs. All innovations of this nature require a leap of faith, and that’s where we are now – the critical moment where anyone looking to dip a toe in the NFT waters must decide if they have a place in golf’s future.
