The report claims that digital assets can fundamentally change how sports fans consume and interact with their favorite teams.
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Nonfungible tokens, or NFTs, and digital assets are one of the ten major trends within the sports industry, according to the consultancy Price Waterhouse Coopers’, or PwC, Sports Outlook 2022 report for North America. The report lists three major uses for NFTs, and how they will shape the future of sport: altering the sports technology infrastructure or driving fan engagement.
The first use case for NFTs is collectible — digital assets that are used to sell rare, authenticated, and collectible content. This includes traditional memorabilia such as trading cards of players and tickets stubs from historic matches that can all be digitalized, minted, and traded on blockchain. These collectibles may eventually be displayed and shared across metaverses, according to the report. The NBA Top Shot, a collectible NFT collection from Dapper Labs, is the “best-known”. The marketplace tokenizes highlights or the “best” plays from NBA history, and has recently ranked in second place, after the Axie Infinity game, for the 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 funding.
Secondly, season ticket member, or STM, NFTs could be considered another big use case. Season ticket members could be given tokenized passes that can be verified to enhance their fan experience. Special edition collectible NFTs could be given to STMs who have access to special content or stadium experiences. Sponsors could also benefit if they allow their customers to lose their physical tickets.
Lastly, virtual access tokens for fans who prefer to pay more for a virtual experience and may not be able to attend games in person, are expected to be in demand. Virtual access tokens are a new type of season tickets. They allow owners to access more behind-the scenes perks like player cams, bench cameras, and even virtual locker-room accessibility. Some soccer clubs that have had success so far with their fan tokens are Paris Saint-Germain and Manchester City who give fans the right to influence non-strategic game- day decisions, such as walk-up music.
PwC stated that sponsorship, media rights, and ticket sales are the most lucrative revenue streams for leagues and teams. PwC expects tokenized tickets, NFT Media Rights, and sponsorship of digital or metaverse event to drive the industry’s growth. It also stated that digital asset sales could become a significant revenue stream. According to the report, in order for this to happen, teams will need a tech stack to connect their digital sales data to existing customer databases and a strong legal team to deal with tax and regulatory implications.
These trends are all on the rise, especially as partnerships between NFT marketplaces and sports associations increase in popularity. Recently, Solana NFT marketplace Magic Eden announced an upcoming NFT collection in collaboration with Overtime, the sporting entertainment platform, to enhance fan engagement during the 2022 NCAA men’s basketball tournament.