Key Insights:
- Crypto exchanges, NFTs, and sport have had a blossoming relationship this year.
- More sports teams and sporting icons are turning to NFTs to drive fan engagement.
- While regulatory scrutiny will persist, NFTs and sport will be forever entwined.
Over the last 12-months, the digital asset market has seen a seismic shift in demand for NFTs and interest in the Metaverse.
While regulatory and government scrutiny over NFT marketplaces continues to grab the crypto news headlines, the relationship between NFTs and sport has blossomed.
PwC Talks Sports NFTs and the Future of Digital Assets
PwC recently published its ninth edition of the Sports Outlook for North America. One area of focus was NFTs and digital assets.
The report explored three use cases and how NFTs and digital assets can influence fan engagement and improve earnings. These included collectible NFT sales, season ticket member (STM) NFTs, and virtual access tokens.
Collectible NFTs are the digital equivalent of trading cards, with teams, individuals, and entire leagues licensing them.
Major sports franchises within the United States have established NFT marketplaces for fans to collect digitalized memorabilia and trading cards in particular.
In partnership with Dapper Labs, these include the NBA Top Shot, the NFLALLDAY, and UFCStrike.
Major League Baseball (MLB) chose not to partner with Dapper Labs, instead opting for several NFT marketplaces to support buying and selling MBL sports cards. These include Candy Digital, OpenSea, and Topps.
The success of NBA Top Shot has been well-publicized, with the most expensive NBA NFT, a LeBron James collectible, going for $230,000. Outdoing LeBron James, we reported a 1952 Mickey Mantle NFT going for $471,000 on the OpenSea marketplace.
Season ticket member NFTs cater to ticket holders, providing access to content around the stadium and in the real world.
While STM NFTs would target a smaller market initially, distributed NFTs to season ticket holders could also become collectible NFTs. Losing season tickets would also not be an irreversible event.
For PwC, the 3rd use case is related to virtual access tokens. Combining the Metaverse and digital assets creates a new market segment for fans.
Perhaps the most enticing proposition of all is the prospect of combining the digital assets with the Metaverse. NFT and STM NFT holders could attend half-time team talks, be courtside, on the touchline, or in the pit. Fans could also have direct access to athletes before, during, and after games. STMs could even attend away games from the comfort of their own home.
The views of PwC are aligned with sports already exploring the Metaverse and driving greater fan engagement.
Last month, we reported on Manchester City Football Club, aiming to be the first football club to enter the Metaverse. Manchester City FC follows in the footsteps of Tennis Australia, which took Melbourne Park and the 2022 Australian Open to the Metaverse in January.
The hype surrounding the Metaverse is so significant that JPMorgan projects a $1 trillion Metaverse.
NFTs have yet to catch up with real-world trading cards. Physical cards still draw significantly higher prices. In early 2021, a 1952 Topps card of Mantle reportedly sold $5.2m at auction, setting a record. In April 2021, ESPN reported a Rookie Patch card featuring James’ autograph and a swatch of his Cleveland Cavaliers shirt also went for $5.2m.
For NFTs and fans, the Metaverse could be the game-changer. Both Decentraland (MANA) and The Sandbox (SAND) have seen increased demand for virtual land in recent months.