NFTs in sports: A new era of fan engagement?

NFTs have been gaining buzz in the sports world as a new way of collecting and trading memorabilia. While NFTs do have some potential benefits, such as providing a more verifiable way to trade items, many experts are sceptical about their long-term value.

NFTs are a type of digital asset that can be used to represent anything from a digital artwork to a piece of land in a virtual world – or, in more recent cases, sports memorabilia.

What happens if the NFT market crashes?

But one of the biggest concerns about NFTs is that they are not backed by anything tangible. Unlike traditional sports memorabilia (think baseball cards), which can be sold or traded for cash, they are purely digital assets that exist only on the blockchain.

This means that, if the market for NFTs crashes, collectors could be left holding worthless tokens.

Nevertheless, sports organisations such as the NBA and sports teams including the NFL’s Dallas Cowboys are making a bet on NFTs.

“I think these products will continue to build upon themselves.”
– Ridhima Kahn, Dapper Labs

The NBA has been partnering with Dapper Labs to deliver a product called Top Shots – video clips of basketball game highlights that are turned into NFTs, and which can be bought and sold among fans.

Dallas Cowboys dabble in digital with Blockchain.com

Meanwhile, the Dallas Cowboys are the first NFL team to get into the space, having inked a deal – reportedly valued at US$6.5 billion – with Blockchain.com. Fans of the team will be able to purchase digital content, including NFTs, through a Blockchain.com crypto wallet.

There are fears that the NFT hype is a bubble, and perhaps not sustainable – especially taking into account the money pumped into the market in early- to mid-2021.

Yet, as described by Forbes’ senior blockchain and crypto editor, Michael del Castillo, crypto companies are still drumming up interest among sports fans by “putting giant ads out there during the Super Bowl; putting their logos on Major League Baseball uniforms”.

Should the sports world be cautious when using NFTs and crypto to build out their brands and win new fans?

Hybrid fan experiences may be the future

“I think these products will continue to build upon themselves,” said Ridhima Kahn, VP of strategic partnerships at Dapper Labs. “We take a lot of what we hear from our community and we implement it back into the product.”

This includes providing a hybrid experience of some sort, and not just NFT video highlights.

For example, Dapper Labs recently had an activation around the NBA All-Star game, auctioning off a limited number of what they call ‘1-of-1’ NFTs that granted VIP access to the next five NBA All-Stars, starting in 2023, as well as access to exclusive online content.

And yet, even though the Dallas Cowboys chose to partner with the more established of these companies, and even though the NBA is dabbling in hybrid experiences for fans, recent volatility in the market means it still remains to be seen whether NFTs in sports are a home run or, perhaps, a swing and a miss.

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Main image: Piaras Ó Mídheach/Web Summit (CC BY 2.0)