How Are NFTs Impacting the Sports Industry?
Main Takeaways
Sports NFTs give loyal fans new and exciting ways to support their favorite teams, while sports organizations can benefit from a new revenue stream by issuing digital collectibles.
Beyond attending live sporting events, fans can also directly interact with athletes in virtual environments, for example, during metaverse meet-and-greets or AMAs.
Non-fungible tokens (NFTs) have seen substantial growth in the last few years, revolutionizing various industries like arts, gaming, music, and sports. Billions of sports enthusiasts worldwide have been introduced to multiple NFT use cases. How exactly do these digital tokens change the sports world?
What Are Sports NFTs?
Non-fungible tokens (NFT) are a type of digital assets that run on a blockchain and are often referred to as crypto collectibles. Each NFT is a unique asset that can either be entirely digital or represent a tokenized version of a real-world item. If you’re interested in learning about NFTs, check out this Academy article A Guide to Crypto Collectibles and Non-fungible Tokens (NFTs).
Sports NFTs are one of the latest use cases of NFTs. They offer new ways for fans to support their favorite teams and interact with them. You can think of sports NFTs as those traditional basketball or football player trading cards. With blockchain technology, these 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 the Binance NFT Marketplace.
Some sports NFTs also serve as a form of fan club membership that gives holders exclusive perks, such as access to meet-and-greet events with athletes.
How Do NFTs Enhance Fan Experience in Sports?
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.
Sports NFTs offer new ways for enthusiastic fans to support their favorite teams and interact with them. As NFTs mature, 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 NFT’s growing utilities.
Digital Collectibles
Sports collectibles are new approaches 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 uses blockchain technology to make conventional sports trading cards digital. It is an NFT marketplace that 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 sold for almost $400,000 in an auction in April 2021.
Virtual Access Tokens
Beyond digital 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.
Some sports team would issue fan tokens in addition to NFTs, to give holders special club perks, from getting players’ autographs and limited-edition jerseys, to exclusive discounts on game tickets. For example, in 2021, FC Porto partnered with Binance Fan Tokens to issue fan tokens and utility NFTs.
Gaming
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.
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 opportunity for sports clubs and teams to cultivate 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
Individual athletes can issue their own NFT collections to 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 mementos of their favorite players and display them on social media to show off their colors.
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 reasonable leeway and wealth for when they retire.
New Stream of Income for Sports Leagues
Issuing NFTs can also bring an additional revenue stream to sports teams. Traditionally, a sports business’s revenue mainly comes from ticket and merch sales, media rights, and sponsorships. With NFTs, teams can choose to tokenize game tickets, stream live games to token holders, or organize holder-only events in the metaverse, even during a pandemic.
Conclusion
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. While sports fans still enjoy owning, trading, and donning their one-of-a-kind badges, today NFT sports use cases go far beyond digital collectibles.