In recent times, non-fungible tokens (NFTs) seem to have exploded into the scene with several mainstream adoptions. The NBA launched an NFT project called the Top Shot, a Taco franchise in Canada sells Taco NFTs, the recent Ballon d’Or awards dished out complementary NFTs to winners while Gucci, McDonalds and Coca-cola have all launched NFT collections.
NFTs have no doubt come a long way. From simple profile pictures to art and music, to sports, tacos and even car washes, these digital assets are selling like 17th-century exotic Dutch tulips — some for millions of dollars. The eye-watering prices of these digital assets which come in unique identities that cannot be replicated have begged the question, “Are NFTs worth the money — or the hype?” Some critics have argued that they’re a bubble with pop inevitability, like the dotcom craze, while believers say they are here to stay, and that they will change both ownership and investing forever. Whatever side of the coin flips, what we know for certain is that NFTs have greatly impacted several industries and particularly the sports industry. NFTs revolutionized the world of entertainment enhancing fan experience and generating revenue for sport franchises.
NFTs have garnered much attention in the sports industry in recent years. A Deloitte report predicts that sports NFTs could generate more than $2 billion in transactions in 2022, about double the figure for 2021. Deloitte also estimated that 4–5 million sports fans globally will have purchased or been gifted an NFT sports collectible within this time.
How Do NFTs Enhance Fan Experience in Sports?
Sports NFTs offer more exclusive ways for enthusiastic fans to support their favorite teams and players, and interact with them. As the market grows and matures, there will definitely be more practical applications for sports NFTs, all set to transform the industry in exciting innovative ways. Ardent fans can celebrate their passion by holding sports NFTs, while sports clubs and their athletes can offer fans long-term value by creating more utility for their NFTs.
Sports collectibles are new NFT customizations for fans to collect player cards and picture and video highlights from games. One of the most popular collections here is the NBA Top Shot, a basketball collectible platform that uses blockchain technology to make conventional sports trading cards digital. It is an NFT marketplace that allows fans to buy, sell and own video clips of legendary NBA game highlights. For example, a LeBron James video clip where he was emulating the famous Kobe Bryant dunk was sold for almost $400,000 in an auction in April 2021.
Virtual Access Tokens
Beyond sports collectibles, NFTs can be integrated into live sports games as virtual access tokens. For instance, fans that are willing to pay for NFT tickets could unlock VIP videos from the stadium’s player cameras, or listen in to behind-the-scenes conversations between the team and coaches. Fans may even interact with different sports players and fellow supporters directly in the metaverse, or use NFTs to sponsor their favorite players. The NFT tickets will also allow overseas fans that are unable to attend the games in person to participate in this unique viewing experience.
In some cases, NFTs are used in online sports gaming like fantasy sports. Sorare, for instance, is a popular fantasy football game that incorporates NFTs into the gameplay. It partners with world-class football clubs like FC Bayern Munich and Real Madrid C.F to bring players on its NFT cards. Fans can buy, collect, and trade these player cards to manage a virtual team and compete in tournaments. Based on the football players’ performance in real matches, their NFT cards will receive or lose extra points.
NFTs in Sports
It is now clear to us how much the sports industry can exponentially boost revenue and fan engagement using NFTs so let’s take a look at the NFT activity within the industry.
NBA Top Shot
One of the earliest sport forays into NFTs was when the NBA launched its Top Shot platform in 2020 as an NFT marketplace that allows people to collect and trade video clips, known as “moments”, from National Basketball Association and Women’s National Basketball Association games. These digital collectibles are stored on the blockchain and are comparable with a digital version of a trading card. You can buy, sell or trade these “moments” just like you can with other NFT collectibles. All moments NFTs are minted on the Flow Blockchain with a link to a special-event video, although the videos themselves are stored off-chain. The project is a collaboration between the NBA, the NBA Players Association and Dapper Labs.
Moment NFTs are grouped into tiers representing their status and scarcity. There are five “Moment tiers”:
- Common: Common Moments are the most available NFTs as the circulation count often starts from 4000-plus. These are readily available in either packs or the marketplace.
- Fandom: This tier is the most exciting collection experience for fans. The circulation count is driven by dynamic demand rather than by a specific mint number. This tier of NFTs can be found during special promotional activities.
- Rare: The originality of these Moments is marked by neon corners on the front. Rare tier Moments have a circulation size from 250 to 2,022.
- Legendary: Legendary Moments are the most prestigious among all the tiers. The circulation count ranges from 50 to 125 with neon corners. Because of their scarcity, these are the most sought-after Moments.
2022 Ballon d’Or Awards
At the recently-held 2022 Ballon d’Or awards ceremony, 5 winners were given digital copies of their awards as NFTs. These NFTs can be traded on nft.ballondor.com alongside other collections like the Fragments of Pyrites. Utilities for these NFts will be released on the 3rd of November.
Chiliz, Chain Link and Partners
Chiliz, the leading digital currency for sports tokenization and world leaders in blockchain-based fan engagement, rolled out the feature to mint Non-Fungible Tokens (NFTs) this March. The NFTs will specifically be for partners on their fan voting and rewards app Socios.com and will leverage on data securely provided by Chainlink’s decentralized oracle network. Current Chiliz partners include major football clubs like FC Barcelona, Juventus, Paris Saint-Germain, Atlético de Madrid, Galatasaray, A.S. Roma, CA Independiente, and back-to-back Dota 2 Esports champions, OG. Chiliz is targeting 50 IPs by the end of 2020 from sports, esports, and the entertainment industry. Also, in early February, Chiliz made their first major move into branded collectibles by announcing a partnership with blockchain ecosystem developer Enjin to mint Ethereum-based collectibles for partners on Socios.com.
In September this year, FIFA announced its very own NFT platform for soccer-themed digital collectables ahead of the 2022 World Cup which would be built on the Algorand Blockchain. The platform called the FIFA+ Collect platform launched later that month and features “affordable, inclusive and accessible” NFTs that will depict notable soccer moments, imagery as well as arts. FIFA also hopes to convert moments from the 2022 world cup edition and subsequent ones into valuable digital collectibles.
The world’s premier mixed martial arts organization – UFC – together with Dapper Labs,makers of NBA Top Shot and NFL All Day launched its NFT collectible product, UFC Strike. The all-new collectible experience became available to fans on January 23 and marked the first time MMA fans had the opportunity to own the most epic, talked-about fight moments in the history of UFC.
NFL All Day
The NFL All Day which is very much similar to the NBA Top Shot project was launched much later in 2021 as a digital collectible marketplace that lets NFL fans collect video highlights in the form of NFTs and connect with other like-minded fans from around the world. The marketplace features four different tiers of NFL All Day Moments (just like the NBA Top Shot):
- Common (About 92% of all Moments): The basic primer of any NFL All Day Moments collection with mint counts between 4,000 and 10,000.
- Rare (About 8% of all Moments): Mid-tier moments with mint counts of 499 to 1,200.
- Legendary (About 0.17% of all Moments): Very rare and highly desired Moments. Only about 200 Legendary Moments exist with mint counts of fewer than 99.
- Ultimate (About 0.01% of all Moments): This tier comprises the rarest Moments with a mint count of one to 10.
Several athletes have gone on to launch their own NFT collections. Lionel Messi partnered with Ethernity to launch his “Man of The Past” NFT collection while Cristiano Ronaldo partnered with Binance to launch a series of NFT collections over a period of years. Other athletes that have partnered with NFT marketplaces to launch their NFT collections include:
- Aguero and Sandbox
- Andy Robertson, Luke Shaw and SporteNFT Marketplace
- Rooney and Block Asset Co amidst a host of others
How Do NFTs Benefit the Sports Industry?
NFTs revolutionize the concept of sports memorabilia by allowing fans to own their favorite players’ cards and even game video clips. They present an important opportunity for sports clubs, teams and athletes to cultivate and maintain long-term relationships with fans.
NFTs also alter the way sports organizations interact with their followers, allowing teams to boost fan engagement by offering exclusive member privileges and sometimes even a mechanism to weigh in on important governance decisions.
Personal Branding for Athletes
As we have already seen with some, individual athletes can issue their own NFT collections to build and engage their fan base. Similar to trading cards, athlete NFTs establish a connection between the player and their devoted supporters. For example, fans can enjoy, own and flex mementos of their favorite players across social media platforms for personal satisfaction or more extensively, for bragging rights.
Furthermore, athletes can maintain their intellectual property rights by issuing NFTs themselves. As NFT creators, they can receive royalty fees from the resales of their NFTs, which could be a an important source of passive income after they retire.
New Stream of Income for Sports Leagues
Issuing NFTs can also bring an additional revenue stream to sports teams. With NFTs, club and team managements can choose to tokenize game tickets, streams of live games, access to athletes or events in the metaverse, literally anything you can think of. This invariably brings in revenue for them.
The range of NFT applications in the sports industry has been expanding recently, and this trend is likely to continue. Digital assets introduce new ways for teams to connect to their loyal supporters and unlock new sources of revenue. As long as sports fans continue to enjoy NFT-bonded exclusive offers and teams get creative with their NFT utilities, NFT use cases within the sports industry will continue to test new boundaries.
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