The report says that digital assets can fundamentally alter the way fans consume sports and interact with their favorite teams.
Non-fungible tokens, or NFTs, and digital assets are one of the top ten trends within the sports industry, according to the report by consultancy Price Waterhouse Coopers, or PwC, “Sports Outlook 2022 for North America.” From transforming the technology infrastructure of sport to driving fan engagement, the report lists three main use cases for NFTs and their likelihood to shape the future of sport.
First Use Case: Collective NFTs
The first use case is that of collectible NFTs, that is, assets used to sell limited edition, authenticated, collectible digital content. This refers to traditional memorabilia, such as playing cards or ticket stubs from historic matches, which go through a process of digitation, minting, and trade on the Blockchain. The report adds that what could come next is their display and sharing in metaverses.
The “best known” example of a collectible NFT collection is Dapper Labs’ NBA Top Shot. The marketplace tokenizes highlights or “greatest” plays in NBA history and has recently ranked second, behind only the game Axie Infinity, for the most NFT transactions within the Blockchain gaming industry at $827 million in 2021. Another popular example is retired NFL quarterback Tom Brady’s market for NFT collectibles, Autograph, which recently raised $170 million in Series B financing.
Second Use Case: Season Tickets
Season Tickets (STM) are possibly another great use case. Providing season ticket members with tokenized verified passes would elevate the experience of an already loyal fan. STMs used to have access to additional special content and in-stadium experiences could also receive special edition collectible NFTs for the matches they attend. In addition, sponsors could benefit if the teams they sponsor allow them to ensure that customers who lose their physical tickets do not miss any added benefits.
Third Use Case: Virtual Tickets
Lastly, it is likely to find a demand for virtual tickets from fans who prefer to pay more for a virtual experience and are unable to attend matches in person. Described as a new take on season tickets, virtual access tokens could give owners access to more behind-the-scenes benefits, like player cameras, bench cameras, or even virtual locker room access. Some successful football clubs so far with their fan tokens are Paris Saint-Germain and Manchester City, which give fans the right to influence non-strategic decisions on match day, such as what entrance music to play.
PwC explained that ticket sales, media rights, and sponsorship are the biggest current sources of revenue for teams and leagues. The report sees tokenized tickets, media rights in NFTs, and sponsorship of digital events or metaverses driving the growth of the sector, and says that the sale of digital assets could also become a major source of revenue. For this to happen, the report adds, teams, will need a technology stack to connect their new digital sales data with existing customer databases, as well as a strong legal team to handle regulatory and tax implications.
All of these trends are on the rise, especially as partnerships between NFT markets and sports organizations grow. Recently, Solana’s NFT marketplace Magic Eden announced an upcoming collection of NFTs in collaboration with sports entertainment platform Overtime to enhance fan engagement during the 2022 NCAA Men’s Basketball Tournament.
By Audy Castaneda