By Mirwan Suwarso, Official Representative at Mola
This year’s Copa America final was notable for many things, from its rushed relocation to Brazil due to COVID concerns in Argentina and Colombia, to the former securing its first big international trophy in almost two decades. The cryptoverse had something to celebrate too—even for those not too big on football—as the event was commemorated with a series of non-fungible tokens (NFTs), a new kind of memorabilia for fans to collect. This confirms a trend that is clear for all tech-savvy sports lovers: Digital assets are coming into sports in a big way.
For all the novelty of sports NFTs and fan tokens, already embraced by dozens of sports clubs around the world, their rise has not come without friction, especially when it comes to the fungible tokens. When clubs minted fan tokens as an extra revenue source in a time where games were taking place in empty stadiums, some fans were less than amused. Multiple fan associations, such as the Leeds Supporters’ Association and West Ham fans, came out against the novel digital assets.
The opposition is not unanimous, though, and such tokens do sell out fast—for Croatia’s Dinamo, it seems, the entire first batch was gone in just 7 minutes. For Valencia, it was two hours. The UFC fan token sold thousands within minutes of its launch. The demand speaks for itself and provides a clear showcase of enthusiasm. But who is behind it?
To get a proper reading of who exactly buys these tokens, and how many go to fans versus speculative traders, we’d have to get into some pretty sensitive data from fan token marketplaces, not to mention the anonymity of blockchain-based wallets as such. Yes, fans are easily the group best-poised to gain value from fan tokens, but such assets will also work for a traders looking for gains and barely interested in sports.
Research on sports NFT buyers by Sportico and McKinsey paints a more interesting and nuanced picture. Getting involved in their favorite sports was the main driving force for just 24 percent of respondents, with the rest driven by a passion for collecting things, speculation, and passion for tech. Crucially, the group was diverse in age, not too interested in crypto, even less interested in art NFTs, and bottle-necked, with 10 percent of respondents accounting for 67 percent of the purchases.
New means of delivery
One of the main reasons why sports need to embrace digital memorabilia is in their ability to bring new audiences to the table. Even assuming that most of the activity will come from a small dedicated group of “whales”—isn’t that the case anywhere else, for that matter?—it is the extended hand of the techie crowd and collectors that matters, and, as the above research indicates, the endeavor has been quite successful thus far.
Drawing in new crowds, especially from the younger tech-savvy ranks, is crucial for sports, as its viewership among the youth is on a decline. Granted, the drop-off is not necessarily about millennials and Gen Zs disliking sports as such, but rather about our collapsing attention spans for consuming content. Professional sports have a ton of competitors vying for attention and screen time, from Fortnite and e-sports to Netflix and even Instagram.
From this perspective, being able to tap new groups of enthusiasts is crucial for sports to hold their ground in the long run, not just for dealing with the losses instilled by the pandemic. And as valuable as that is on its own, what also matters is that blockchain assets also work as a new means of delivery for highlights, best moments, and other content, with NFTs. They could also be used to instill a greater sense of connection with the team of choice, through fungible fan tokens.
Resurgent collectibles
The growing interest in NFTs and all things crypto is also playing into another trend—a resurgent appetite for traditional sports collectibles, especially sports cards, among the youth. The trend is largely driven by the desire to get some peace of mind from a hobby during the turbulent times of COVID. For reference, in the aforementioned NFT buyers poll, between 36 and 58 percent in each group said they also collected cards.
Digital assets, especially NFTs, have a lot to offer in this respect. Let’s consider the fact that consumers prefer paying for experiences these days, not objects. The excitement of a sports card, or any other collectible, comes from its tangibility, rarity, and sense of ownership. An NFT can replicate all that, except for tangibility (unless the minter throws in something physical along with the token, which is not unheard of). It can also go above and beyond on the experience front. Today, it can be linked with a game highlight video, but in the future, it could also be things like VR scenes or unique team jersey filters for Instagram, anything that could make for a meaningful digital experience.
This, in my view, has a lot to do with what the industry must learn from the backlash against the fan tokens. The main takeaway here is that novelty in itself should not be the goal. When offering fans tokens, whether fungible or not, clubs must strive to add as much real, tangible value to them as possible. The benefits attached to such assets can take on many forms, from physical memorabilia like exclusive jerseys, scarves, or signed sports cards, to experiences like Zoom meet-ups with athletes or even a 1-vs-1 with their favorite in a videogame. Such added benefits would go a long way toward winning back the fans disgruntled by the introduction of the novel assets.
All in all, the chance to reshape the hobby and collectible side of sports in a way that is best geared for tech-savvy digital natives is nothing to frown upon for the sports world. Sports have long forayed into the digital—just look at the wild sums EA Sports makes on videogames like FIFA and Madden NFL—and their arrival on the blockchain is a logical and welcome step in this direction.
About the Author
Mirwan Suwarso is an Official Representative at Mola, an OTT multimedia company encompassing sports, music, and film content. Mirwan also holds the position of Business Development Director at Super Soccer TV. Before Mola, he worked as Creative Head at MSP Entertainment and Film Director at Destiny Films.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.