PwC report calls NFTs 'the future of digital assets in sports'
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. From altering sports technology infrastructure to driving fan engagement, the report lists three main use cases for NFTs and their likelihood to shape the future of sports.
The first use case is collectible NFTs — assets used to sell collectible, authenticated and limited edition digital content. This refers to traditional memorabilia like trading cards of players or tickets stubs of historic matches that can be digitized, minted and traded on the blockchain. The report added that these collectibles could eventually be displayable and shared across metaverses.
The "best known" example of a collectible NFT collection is the NBA Top Shot from Dapper Labs. 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. Providing season ticket members with verified tokenized passes would elevate the experience of an already loyal fan. STMs used to having access to additional special content and stadium experiences could also receive special edition collectible NFTs for the games they attend. And sponsors could benefit too if the teams they sponsor enable them to ensure those customers who lose their physical tickets wouldn’t lose any added benefits.
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. Described as a new version of season tickets, virtual access tokens could give owners access to more behind-the-scenes perks such as player cams, bench cams or even virtual locker-room access. 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 explained that ticket sales, media rights and sponsorship are the current largest revenue streams for teams and leagues. It expects that tokenized tickets, NFT media rights and sponsorship of digital or metaverse events to propel the growth of the industry, stating that digital asset sales might also become a "serious" revenue stream. The report added that in order to make this happen, however, teams would need a tech stack that connects their new digital sales data with existing customer databases, and a strong legal team to handle regulatory and tax 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.