Non-fungible tokens (NFTs) have seen exponential growth over the past few years, disrupting and bringing needed innovation to various industries like the arts, gaming, music, and sports.
We can agree now that NFTs have gone mainstream, with sales eclipsing $27 billion in 2021, including Crypto Punk #8857 which sold for $6.63 million, as well as Beeple’s Everydays, The First 5000 Days, which was auctioned for more than $69 million.
However, with all these leaps and successes that NFTs have earned over a short period, the full use cases of NFTs are yet to be fully explored and exploited.
Many critics have argued that together with value, NFTs should provide some form of utility. The recent crypto crash and the Terra Luna fiasco have exposed some of the shortfalls of projects within the crypto space that seems to be good at raising huge amounts of funding but underdelivering 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 utility NFTs have started to invade is the sporting world. Sports NFTs are giving loyal fans new and exciting ways to support their favourite athletes & teams and at the same time, sports organizations are set to benefit from a new revenue stream by issuing digital collectibles.
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 way and can either be entirely digital or made to represent a tokenized version of a real-world item. If you are interested in learning about NFTs, check out this article in which we have explored the subject in detail.
Sports NFTs are one of the latest use cases of utility NFTs that the tech and sports industries are currently exploring. These NFTs offer new ways for sports fans to interact with and support their favourite athletes and teams. An easier way of understanding sports NFTs is to imagine them as those traditional basketball or football player trading cards but in digital form.
With blockchain technology, such physical cards are transformed into different forms of NFTs that sports enthusiasts can collect — memorabilia, gifs, video highlights, game badges, and much more. In addition, they are tradable on NFT marketplaces, including leading ones like OpenSea.
Sports NFTs can also be made to serve as a form of fan club membership giving holders exclusive benefits and perks, such as access to meet-and-greet events with athletes. This has already started to happen in other fields outside of the sporting world.
One such famous NFT collection that offers its holders perks is the Bored Ape Yacht Club (or BYAC). Such perks include real-life events with celebrity guests and performers. BYAC counts celebrities like Justin Bieber (BAYC #3001), Neymar Jr (BAYC #6633), and Kevin Hart (BAYC #9258) among its celebrity collectors.
Deloitte Global, the world’s leading audit and assurance firm, predicts that NFTs for sports media will generate more than $2 billion in transactions in 2022–2X the figure for 2021. The audit firm estimates that between 4–5 million sports fans globally will have purchased or been gifted an NFT sports collectible by the end of 2022. This means that the contribution of NFTs to the sporting field is going to be hard to overlook.
Sports NFTs are offering new ways for enthusiastic fans to support their favourite athletes and interact with them. As NFTs continue to develop, there are more practical applications for sports NFTs, all set 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 utilities.
Sports collectibles are new ways for fans to collect player cards and even video highlights from games. One of the most popular collections is NBA Top Shot, a basketball collectible platform 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 clip showing LeBron James emulating the famous Kobe Bryant dunk was auctioned for almost $400,000 in 2021.
Digital Access Tokens
Beyond being treated as digital collectibles, NFTs can be integrated into live sports games as virtual access tokens. For example, 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.
NFTs also share a close relationship with yet another innovative development in the same blockchain space, the metaverse, an embodied internet that is expected to grow at an exponential rate over the next few years. The metaverse enables virtual users to seamlessly move their digital identities and possessions in the form of utility NFTs across different virtual worlds. Utility NFTs make it possible for digital items in the metaverse to be uniquely identifiable, purchasable, and exchangeable on NFT marketplaces.
In sports, fans can take advantage of such innovations to interact with their favourite athletes as well as fellow supporters directly in the metaverse. Fans can even use NFTs to sponsor their favourite players. The use of NFTs for ticketing purposes can be combined with the metaverse and be used to allow overseas fans that are unable to attend the games in person to participate in unique viewing experiences.
Some sports teams may issue fan tokens in addition to NFTs that give holders special club perks, from getting players’ autographs and limited-edition jerseys to exclusive discounts on game tickets. For example, the Portuguese football club FC Porto entered into a partnership with the flagship crypto exchange, Binance, to issue fan tokens and utility NFTs in 2021.
One of the emerging use cases for NFTs is in online sporting games (eSports) such as fantasy sports. For example, Sorare, is a fantasy football game that is fast gaining popularity among gamers, and it incorporates NFTs into the gameplay. The way the game works is that fans can buy, collect, and trade NFT player cards used to manage a virtual team and compete in tournaments. Based on the football players’ performances in real matches, the NFT cards will receive or lose extra points. Sorare has partnered with world-class football clubs like Barcelona, Liverpool, and Real Madrid to bring players onto its NFT cards.
NFTs are revolutionizing the whole concept of sports memorabilia by allowing fans to have ownership of their favourite players’ cards and even game video clips. They present an opportunity for sports clubs and teams to build and maintain long-term relationships with fans.
NFTs are also changing the way sporting 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
Individual athletes can issue their own NFT collections to actively engage with their fan base. Similar to trading cards, athlete NFTs act as a connection between the player and their devoted fans. For example, fans can enjoy NFTs modelled after their favourite 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 could provide reasonable leeway and wealth for when they retire.
For instance, Binance recently announced in a press release that it had signed a multi-year NFT partnership with Portuguese footballer Cristiano Ronaldo. The partnership is to essentially create 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 Stream of Income for Athletes and Sports Leagues
Issuing NFTs can also bring an additional revenue stream to sportspersons and teams. Traditionally, a sporting business made the bulk of its revenue from ticket and merchandise sales, media rights, and sponsorships. Using NFTs, sports teams can choose to tokenize game tickets, stream live games to token holders, or organize exclusive NFT holders-only events in the metaverse, even during a pandemic.
New and upcoming athletes who require funding can use NFTs to bridge the gap. This could be helpful in sporting disciplines like motor racing, where the cost of taking up the sport can be enormous and limiting. One 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. Perks for holders of Apex Doodles NFTs include access to an invite-only Discord channel, souvenir airdrops, including physical parts of Oscar’s kart as well as potential meet-and-greets with Oscar at races.
Be on the lookout for our upcoming interview with Oscar as well as the launch of Apex Doodles Genesis NFTs going live soon on OpenSea.
The number of new and exciting NFT applications in the sports industry has been rapidly increasing, and this trend is likely to continue. NFTs and other related digital assets are introducing new ways for teams to connect to their loyal supporters as well as unlocking new sources of revenue. While sports fans are still enjoying the ownership, trading, and wearing of their one-of-a-kind physical sporting memorabilia, today’s sports NFTs use cases go far beyond being just digital collectibles.
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