The top 10 list of NFT brands by revenue, as compiled by Cryptomouse7 on Dune, includes only three sports-related entries: Nike, Adidas & Australian Open. This may come as a surprise to some, as sports are a significant part of the entertainment industry and have a devoted fan base.
So what’s happening, and where is the opportunity for growth?
Well, given sports organisations have a number of different stakeholders and layers of governance, there can be resistance to NFTs given the ‘cash grabs’ associated with the early uses of the technology. The Australian Open are currently the only rights holder within the top 10 to successfully navigate this tricky dynamic internally and externally. As sports organisations begin to understand the technology and applications further, they will be able to engage and monetize their local and global audiences further using NFTs whilst also looking for opportunities to integrate them to enhance their existing business models.
Looking at older examples (that perhaps would have been in the top 10 in previous years), the first mover was of course NBA's Top Shot platform, but with other popular games like fantasy being given a new lease of life through platforms like Sorare, it shows that there is an interested, active audience willing to engage if you prioritise the product/experience over the technology. In general, this is an area sports organisations need to work on.
So, where else have NFTs begun to be applied?
A non-exhaustive list, with a few examples of organisations leading the way, would be:
Collectible items: Sports fans are often passionate collectors, and NFTs provide a unique and rare way to own a piece of sports history. Teams and organisations could create NFTs of special moments, such as a game-winning goal or a record-breaking performance and sell them to collectors. e.g. Dapper Labs launched in 2018 a project in association with the NBA: NBA Top Shot. The platform allows users to buy, trade and collect basketball highlights in the form of NFTs. First mover advantage..
Virtual ticketing: NFTs could be used as a way to securely sell and transfer virtual tickets to sporting events. This could be especially useful for events that are sold out or for those that were held in venues with limited capacity due to COVID-19 restrictions. e.g. caps can be written into the smart contract to avoid scalping on the secondary markets, helping fans; clubs and events can also share a cut of secondary market ticket sales, which they’ve never been able to get access to before. New revenue sources.
Merchandise: NFTs could be used to sell exclusive sports-themed merchandise, such as signed jerseys or limited edition hats. Clubs and organisations will be able to certify and authenticate their exclusive valuable memorabilia through a blockchain and IOT technologies. This connects the digital and physical worlds to fight counterfeiting and strengthen brand-consumer relationships. For example, to celebrate their 95th birthday, Italian football club, Fiorentina, partnered with Genuino to launch VIOLA 9.5. A project that will give fans the chance to buy, exchange and own exclusive club memorabilia, both digital and physical.
In conclusion, sports currently only featuring three times in the top 10 NFT brands by revenue should not be looked down upon. There is still plenty of room for the sports industry to explore and capitalise on the potential of NFTs and it is only a matter of time before we see the inevitable increase. With the right strategy and approach, sports organisations and enthusiasts can tap into the growing popularity of NFTs and create new ways of connecting with their consumers and generate new revenue streams.