Non-functioning tokens, or NFTs, and digital assets are one of the top ten trends in the sports industry, according to consultancy Price Waterhouse Coopers’, or PwC, Sports Outlook 2022 report for North America. From changing sports technology infrastructure to driving fan engagement, the report lists three key use cases for NFTs and their likelihood of shaping the future of sports.
The first use case is collectible NFTs – assets used to sell collectible, verified and restricted digital content. This refers to traditional memorabilia such as player trading cards or tickets from historic matches that can be digitized, minted and traded on the blockchain. The report added that these collectibles may eventually be rendered and shared by metaverses.
The “most famous” example of a collectible NFT collection is the NBA Top Shot from Dapper Labs. The marketplace tokenizes highlights or the “best” plays in NBA history, and recently ranked second, after the Axie Infinity game, for most NFT transactions within the blockchain gaming industry with $827 million dollars in 2021. Another popular example is retired NFL quarterback Tom Brady’s NFT collectible marketplace Autograph, which recently raised $170 million in Series B financing.
Second, subscription members or STM, NFTs can be considered another big use case. Giving season ticket members verified tokenized passes would enhance the experience of an already loyal fan. STMs used to having access to additional special content and stadium experiences may also receive special edition collectible NFTs for the games they attend. And sponsors can also benefit if the teams they sponsor allow them to ensure that customers who lose their physical tickets don’t lose any additional benefits.
Finally, virtual access tokens are expected to be in high demand for fans who would rather pay more for a virtual experience and may not be able to attend games in person. Described as a new version of season tickets, virtual access tokens could give owners access to more behind-the-scenes benefits, such as player cameras, bank cameras, or even virtual access to the locker room. Some football clubs that have had success with their fan tokens so far are Paris Saint-Germain and Manchester City, which give fans the right to influence non-strategic match day decisions, such as walk-up music.
PwC explained that ticket sales, media rights and sponsorship are currently the biggest sources of income for teams and leagues. It expects tokenized tickets, NFT media rights, and sponsorship of digital or metaverse events to fuel industry growth, and states that the sale of digital assets could also become a “serious” revenue stream. The report added that to make this possible, however, teams will need a tech stack connecting their new digital sales data to existing customer databases, and a strong legal team to handle the legal and tax implications.
These trends are all on the rise, especially as partnerships between NFT marketplaces and sports associations grow in popularity. Recently, Solana NFT marketplace Magic Eden announced an upcoming NFT collection in partnership with Overtime, the sports entertainment platform, to increase fan engagement during the 2022 NCAA Men’s Basketball Tournament.