NFTs, otherwise known as non-fungible tokens, are the latest trend to be thrust into the focus of the media due to its association with sports.
An NFT is a digital asset which has a unique code the prove its authenticity and can be connected to any digital asset like an audio file, animation or illustration. It is something which is unique, like a piece of art or one-of-a-kind trading card.
The code itself its registered on a blockchain which is like a digital ledger that is usually known for controlling the use of cryptocurrencies.
NFTs can be purchased in an off the shelf manner or through auctions and the buyer then holds the asset in their digital wallet on a device like a smartphone or laptop. The tokens can then be sold or traded in the hope of generating a profit.
Many people are buying in to these NFTs and some are going for huge amounts of money. Mike Winkelmann is a digital artist who made $69 million at Christies for one of his digital artworks. It makes him one of the top three most valuable living artists due to his following of fans of digital art.
When people are putting this much money into different digital artworks, obviously not all at this level of price, but the value continues to be high for a lot of the most well-known pieces like the Bored Ape Yacht Club NFTs.
What makes the genre have strong opposition is the fact that you can purchase these NFTs and own the rights to an image, though this does not stop others using it. Others can copy and share and put your NFT as their profile picture on twitter, you cannot stop this, but it doesn’t change the fact that you own it.
For those in favor of the NFT uprise, it can be considered similar to how you can buy a copy of the Mona Lisa, but only one person can own the original.
In one of the most diverse industries, the sports NFTs has become a new revenue stream with teams and franchise from around the world have the opportunity to capitalize on.
Deloitte considered that in 2022, one of the most common and lucrative uses of NFTs would be through limited edition video clips, sporting moments or player cards. This can be of players at the club, past or present, as well as video of players or actions within games that are important to a player or the club as a whole.
With regards to the player cards, the value of these will obviously depend on the profile of the athlete. Players like Cristiano Ronaldo, Lebron James and Tom Brady may be worth more long term and maintain their value with high demand, though some players may lose their demand after their careers come to an end.
There is also the concern of the players actions away from the pitch. Should you have bought a player card of an athlete who later commits a crime or offence which destroys their reputation the value of the NFT could plumet without warning.
Winning goals in the last minutes, or hail Mary passes will maintain their value amongst fans of the team. These are often impossible to tarnish unless the scorer becomes causes outrage and ruins the good feeling of watching the clip.
Clubs are able to target memorabilia style NFTs which can be sold to supporters with no risk to the image of the NFT. Golden State Warriors NBA team in San Francisco offered a limited run of championship rings and ticket stubs as NFTs. Further rewards for those who bought first issue of each ring, included a material ring and a unique banner if you purchased the full set.
With these NFT tokens they can be bought at auction, which the clubs use the devotion and demand of the supporters to ensure they reach a high price. Knowing their market, there are many people who will pay over the odds for the original or for some of the perks that are offered with the purchase.
Sports stars themselves are selling their own NFTs seeing a further way to connect with fans while also making huge income. Japanese tennis player Naomi Osaka joined NFL legend Tom Brady’s platform, Autograph, to offer a range of blockchain memorabilia.
Each item is tiered by price with the top level NFTs selling from $55,000 and more. She joins the Autograph label after promoting her own with her sister called “The Colors of Naomi Osaka” which sold for around $600,000.
Osaka isn’t the only one to join Tom Brady’s platform, Tiger Woods, Derek Jeter, Tony Hawk and Wayne Gretsky are all huge names in their respective sports and are part of Autograph. Lionel Messi also launched his own NFT crypto art collection called “Messiverse”.
The biggest clubs and stars have all jumped into the booming world of NFTs which in this instance offer huge profits for those in from the start. As they are sold there is little proof their value will remain and any value they have is solely based on demand.
Should people move on from caring about a picture of a bored ape, the NFTs become suddenly worthless, and a new craze becomes popular.
It is early days for the NFT world, though with the support of some of the biggest musicians and athletes in the world, NFTs look set to be a big talking point throughout 2022.