In his monthly crypto tech column, Israeli serial entrepreneur Ariel Shapira covers emerging technologies in cryptocurrency, decentralized finance (DeFi), and blockchain, as well as their role in shaping the 21st century economy.
Hardcore sports fans first got a taste of how digital assets could become the next sports memorabilia phenomenon in June 2020, with the launch of Dapper Labs’ collection of non-fungible NBA Top Shot Moments (NFT) tokens.
Since then, the professional sports industry has actively benefited from the NFT craze. This is not a bad thing at all, considering that NFTs solve the issue of digital ownership once and for all. There is no reason why sports cannot enjoy the democracy that this technology brings. However, there is also potential for sporting giants — franchises, leagues, foundations — to take advantage of fans the way crypto companies have profited from gullible investors in the past. This kind of opportunism must be stopped before it becomes the norm.
Most likely, fans will not tolerate this.
Exploiting fan loyalty
Franchises and major sports leagues are worth billions of dollars, and the industry as a whole is worth $620 billion. The foundation of this immense wealth has been built on the backs of die-hard sports fans, who have deep emotional ties to the players, teams and athletes themselves. From $15 for a beer to $1,000 for tickets and expensive cable sports packages, fans have long been accustomed to achieving their loyalty. Monetization is a normal and healthy part of the business, but it should be within the bounds of honest business, not the kind of monetization we’ve seen in other crypto trends so far.
The New Jersey Devils became the first NHL team to try to capitalize on the NFT hype last year by releasing their own NFTs in celebration of their previous championships. The Devils, as one of 32 NHL franchises, were able to capitalize on that credibility and recognition. Selling branded merchandise like jerseys to celebrate past tournaments is more than acceptable and has always been the norm. But when multibillion-dollar professional sports organizations create NFTs that play on fans’ emotional bonds by capitalizing on their past glory without offering any benefit, they will likely come across as fervors in bad taste.
Related Topics: What are the main sports that athletes get paid for in cryptocurrency?
Taking advantage of NFTs to make more money, of course, makes perfect sense from a short-term business perspective, but bypassing them could hurt fan relationships in the long run, especially given the reputation that NFTs have after it was revealed that 80% of NFTs were are scams, or scams, according to NFT’s leading OpenSea marketplace.
NFTs of real value
So, what does “going away” mean in the context of NFT-issue sports teams? Perhaps the best answer is “you’ll know it when you see it”. When the Chicago Bulls start selling the NFT to some silly T-shirt monkey for half a million dollars, most fans would think it’s a shameless cash grab. The best way to avoid this perception is to launch NFTs that offer tangible value or benefit to fans beyond the trophy. Just as with other crypto projects, the key is actually solving the problem, not just releasing a product that literally does nothing but looking good and being on the blockchain, and then selling it for an absurdly inflated price.
Italian football club Como 1907 has found a way to take advantage of NFTs that already provide an experience for their fans. Partnering with Mola, an Indonesian media service specializing in live sports, Como 1907 sold NFT which included a pair of lifetime season tickets to watch matches at home, two first-class flights to Como from anywhere in the world, and a full three-day trip. With tours, Michelin-starred dining, theater night and more.
Related Topics: Beyond Collectibles: How NFTs Are Revamping the Ticket Industry
Through initiatives such as these, NFT rewards fans for their loyalty with a discount, in full line with the vouchers and coupons used in various industries in the past few decades. NFTs are used in this way to monetize loyalty, yes, but in a manner that is courteous and respectful – and perhaps most importantly from a business perspective, they are more scalable because they do not benefit from short-term hype.
Professional sports teams have endless opportunities to take advantage of NFTs that don’t include trying to tap into the passion of their fans. A totally different and creative approach to tap into which NFTs they can use in the future involves exploring young talent. As youth sports organizations continue to increase their levels of competition to prepare young athletes for professional levels, platforms like Leap can be leveraged to speed up the process and reach a larger pool of talent.
The youth sports discovery platform features social and game elements to help young athletes, especially from Desa