Over the past three years, the rising tide of NFT technology has swept over many industries. From fashion to art, it seems everyone has experimented with, debated its veracity, and implemented initiatives surrounding this new tech. But perhaps no industry has been as bullish about non-fungible tokens as sports.
Whether you look at sports leagues, gaming companies, or individual athletes, NFT fever has encompassed this $487 billion industry. But you might be wondering — how?
In this article, we answer the question, “How are NFTs revolutionizing sports?” We’ll look at specific use cases for NFTs that entities in the industry are taking advantage of, what certain sports leagues are doing with non-fungible tokens, and even some case studies of individual athletes venturing into the Web3 world.
Let’s get started.
How NFTs Are Revolutionizing Sports
In late 2020, Dapper Labs launched a little-known product called NBA Top Shot. It featured NFTs that doubled as video highlights of top players, which people could collect and trade. While it didn’t catch much attention at first, soon that would change, and NBA Top Shot would launch the longest-lasting bull market in NFT history.
Since then, NFTs have transformed the world of sports, from collectibles to fan experience and even ticketing. Here are four ways in which this new technology is revolutionizing that industry, starting with digital collectibles.
The first sports trading cards started in the 1860s with American baseball, later becoming staples of candy and tobacco products. Today, the industry is worth over $600 million, with top cards still selling for millions of dollars. So, it makes sense then that the first real use case for NFTs in the sports industry is collectibles. But this time they are digital.
What started with NBA Top Shot and its digital moments has enveloped the entire industry. Dapper Labs has created the same product for the NFL, UFC, and La Liga, video moments that double as NFTs. Other leagues like the MLB and NHL have partnered with other companies to create their own digital collectibles to varying degrees of success.
Digital collectibles solve some problems that physical sports collectibles face:
- They are on the blockchain, so there’s a history of ownership and provenance
- Fraudulent activity is reduced because the tokens are on an open, digital ledger
- Wear and tear are minimized compared to physical trading cards
NBA Top Shot generated over $1 billion in sales as of January 2023 all by itself. There’s little doubt that if this trend catches on, we could see a paradigm shift in the sports collectibles industry, leading to the birth of a multi-billion-dollar industry.
For a sports fan, there are few things as special as taking in a game in-person, hearing the roar of the crowd, eating some popcorn, sipping on a beer or coke. But, today, sports leagues and individual teams are taking the fan experience to the next level — through the use of NFTs.
There are three primary ways in which teams are using NFTs to revolutionize the fan experience: exclusive rewards, token-gated experiences, and virtual stadiums.
Let’s take these one-by-one.
In the past two years, there have been a few instances of teams rewarding fans for holding specific NFTs. The non-fungible tokens often come from collections that the teams release, some of which cost a pretty penny. Holding them in a wallet is not just about the art and the ability to resell the NFTs: They come with token-gated experiences or rewards.
For instance, FC Barcelona released an NFT collection designed to promote an environment sustainability project. Holding that NFT granted holders the opportunity to win prizes, including a signed jersey by a Barcelona player. Other teams have experimented with meet-and-greets: Hold an NFT from a collection and meet the players.
Some leagues and teams — such as the MLB and Man City — are in the process of constructing virtual stadiums. These stadiums simulate the in-game experience but can allow people all around the world to enjoy the game with other fans, a complication for leagues or teams with a global audience. NFTs play a role as well. The MLB has a virtual stadium, for instance, where game attendees can go on scavenger hunts and win a prize in the form of an NFT.
In these examples, leagues and teams are using Web3 tech to enhance the fan experience. Although nothing may be able to replace going to an actual game, these enhancements can lead to a stronger bond with the team or sport, a benefit for all.
Then there is ticketing, and this is one might surprise you. Leagues are not just selling tickets in the form of NFTs but are issuing non-fungible tokens as mementos for attending a game. Let’s dive in.
It all starts with the NFL. Two seasons ago, it created an NFT ‘ticket stub’ program where individuals who attend games could receive an artistically rendered digital ticket stub as a memento for the experience. The initiative started with just a few games at first but was so successful that the league expanded it to include over 100 games for the following season.
Of course, sports are working to sell actual tickets as NFTs too. Sports Illustrated, for instance, has an entire marketplace dedicated to events that issue tickets as non-fungible tokens. While the events that it caters to are generally small, eventually the trend could catch on to include larger leagues, even professionals. Why?
NFT ticketing has promise that regular ticketing lacks. Here are some of the pros:
- NFT tickets are harder to forge because they are on the blockchain
- They are easier to customize, allowing an issuer to sell tickets for special sections
- Buyers can resell them on open, virtual markets if they choose to not attend
- Mass buying and reselling can be made more difficult
There’s little doubt that non-fungible token technology can transform the ticketing industry, including in sports. Over time, it will likely catch on until it is the predominant way to issue tickets.
Finally, there’s gaming. According to Statista, the sports gaming industry is worth $9.2 billion, with an annual growth rate of over 10%, meaning it will be worth around $16 billion by 2027. While mainstream gaming companies dominate the industry, there are a couple of Web3 gaming businesses that are trying to make inroads. The two most popular are Sorare and NFL Rivals.
Sorare is a NFT fantasy soccer game where you get to be the GM of your own virtual team. It works like this: You collect ‘cards’ that are players, which come with scores and a set of attributes. Then, you put a team together and play a virtual match against other users around the world. If you win, you receive prizes, including other cards or IRL experiences.
NFL Rivals has a similar premise. Here, you are the GM of your own NFL team. You collect players in the form of non-fungible tokens, assemble your team, and play them in an arcade-style contest against other players. NFL Rivals comes through a partnership between Web3 gaming company Mythical Games and the NFL.
Gaming has certainly had its problems with NFTs, as we’ve seen throughout the past two years. Gamers generally don’t like them, as the tech hasn’t added much to gameplay in years past. But we may be seeing that change. NFTs allow for ownership of in-game assets, meaning you can later sell (or trade) your assets on the open market. That adds a financial component to games that could prove very addicting in the long run.
How Major Sports Leagues Are Adopting NFTs
In the next two sections, we’ll cover how major sports leagues and individual athletes are adopting NFTs to engage fans on a completely new level. This section is for the major sports leagues. Here, we’ll cover: the NFL, NBA, MLB, NHL, and FIFA. For time constraints, we’ve passed on professional tennis, golf, and cricket, who are all also adopting Web3 technology.
The NFL might not come to mind when you think of innovative sports leagues. It is notoriously slow to change, often adopting the mentality that it needs to ‘protect the Shield.’ Fortunately, when it comes to NFTs, it has been one of the first movers in the space. Here are some of things it’s been up to:
- Partnership with Dapper Labs to create NFL All Day, an NFT trading platform
- Partnership with Mythical Games to launch NFL Rivals, a blockchain NFT game
- Pioneered the ticket-stub fan experience program, growing it to over 100 games
While NFL All Day has yet to be a success (the ongoing bear market likely is contributing to that), NFL Rivals and the ticket-stub program have been, showing that NFL fans are engaging with the new technology, likely providing revenue streams for the League into the future.
The literal first-mover in the space and perhaps the most innovative North American sports league, the NBA has been at the intersection of sports and NFTs long before other leagues joined in. Here’s a quick list of its various projects, including an interesting dynamic NFT collection:
- NBA Top Shot, which helped bring NFTs into mainstream consciousness
- The Association, a dynamic Ethereum NFT collection for the 2022 Playoffs
- Partnership with Alibaba to launch NFTs in China
And that doesn’t even count the number of NBA players who have repped NFT projects such as LaMelo Ball and LeBron James or those who have released individual collections for their fan bases. We’ll get to them in the next section.
Although the MLB took its time assessing the NFT space, once it jumped in, it quickly started moving, partnering with a major NFT marketplace and launching collectibles. Here is a list of the projects the MLB has started since NFT fever began:
- Launched digital trading cards in partnership with Topps
- Partnered with Candy Digital to release more MLB NFTs
- Debuted the first virtual stadium with scavenger hunts involving NFTs
While the MLB has historically been a slow mover, it has adopted NFTs quickly. Like most sports leagues, it sees potential in the new technology to transform collectibles and the fan experience, a bullish sign for the space.
Of major sports leagues, the NHL has perhaps been the most cautious about moving into the Web3 space. It spent most of 2021 and 2022 researching the space and developing its product. But, now it appears times are changing.
In the last two months, it has opened its new NFT platform called “NHL Breakaway” up for sign-ups. With the first drop scheduled for July 27th, it will likely cause a stir in the hockey world, similar to what NBA Top Shot and other products have done in other sports leagues.
Then, there is FIFA. The world governing association of soccer, the most popular sport on the planet, has been bullish on Web3 technology for some time. From partnering with Algorand as its official blockchain partner to launching activations in big metaverses, it has shown an interest in using the tech for marketing and improving the fan experience.
Here is a quick list of what FIFA’s been up to in the world of NFTs:
- Launched NFTs for the 2022 FIFA World Cup in Qatar
- Debuted FIFA+ Collect, a standalone NFT collecting platform for soccer NFTs
- Partnered with Altered State Machine to launch an AI-powered game (where NFTs will soon be added)
As these instances show, most major sports leagues are entering Web3 through partnerships or launching their own NFT marketplaces. But the movement extends far beyond the big leagues and officially licensed collectibles or better fan experiences. Individual athletes are getting in on the trend as well.
Individual Athletes and NFTs
We’ve talked about digital collectibles, fan experience, ticketing, and games. But one way that NFTs are revolutionizing the sports industry may surprise you: Changing the relationship between fans and their favorite players.
Consider this list of the athletes who have launched NFT collections:
- LeBron James
- Tiger Woods
- Simon Biles
- Andy Murray
- Steph Curry
- Dale Earnhardt Jr.
- Usain Bolt
- Naomi Osaka
- Patrick Mahomes
- Tony Hawk
Why? NFTs, even further than Web2 social media channels, allow athletes to connect with their fans in entirely new ways. Gone are the times of strict team or ‘official’ player memorabilia, carefully curated by leagues to appeal to a mass audience. Today, any athlete can launch their own set of digital items that target their fan base and offer a wide variety of rewards.
This ‘Future of Fandom’ has gone so far that Tom Brady, widely considered the best quarterback to ever play in the NFL, has started an NFT marketplace that allows popular players to reach their fan bases. There, you’ll find many of the above names launching their own collections. Often, the NFTs come with tiered rewards. Access is at a premium.
The intersection between sports and NFTs goes even further than that. The Gutter Cat Gang, an NFT collection, has partnered with various NBA athletes and given away shoes with the collection’s famed NFT art on the sides. Popular NFT collection DeGods owns a basketball team in Ice Cube’s 3-on-3 league.
There’s no doubt where the sports industry is concerned, NFTs are making their play. And athletes are taking notice.
The Statistics Behind Sports and NFT Adoption
Finally, the last section: a deep look at the statistics behind sports and NFT adoption. While we’ve already shared many statistics, this section will serve as a reference as to why this change is taking place — and the numbers behind that change.
The sports industry, according to statistics:
- Total valuation: $487 billion (2022)
- Sports collectible market valuation: $35 billion (2023)
- Sports memorabilia market excluding NFTs and cards: $12.2 billion (2021)
- Fan spending in stadiums per year (engagement driver): $50 billion (Deloitte)
The NFT industry, in statistics:
- Total valuation: $22 billion (2023)
- Growth rate since 2021: 220x
- Projected valuation by 2025: $80 billion
- Half of NFT sales cost less than $200
The sports NFT industry:
- Projected growth rate of 36.6% until 2032
- Projected annual revenue of $41.6 billion (2032)
As the statistics show, the industries of sports and NFTs are prime for an intersection, even if we don’t see the true results until years down the road.
There are many industries that have adopted NFTs, but few have done so with as much gusto as the sports industry. The technology is revolutionizing the sports landscape, changing the memorabilia fans buy, the experiences they have, and even the way they acquire tickets. Major sports leagues and athletes are taking notice, and getting involved with the movement.
Change can come quickly or slowly, and it’s easy to dismiss NFTs in this bear market. But smart money is betting big on this technology even as naysayers currently have their day. Time will tell ultimately what the outcome will be, but Rarity Sniper believes that NFTs are already revolutionizing sports and we’ll see the results of that in the years to come.