Decoding NFTs in the Sports World

I like JPEGS. I use them daily in my work and personal life. But an NFT is not a JPEG image. 

An NFT is not a JPEG image. Full-stop.

An NFT is the contract that sits behind the JPEG that provides ownership to you, the fan, the collector. This preferred format has also given new life to digital art. For the first time, we can prove ownership of digital assets, unlocking new fun and engaging ways for artists, athletes and the sports world to interact with their fans. This form of business allows fans to be in control of the relationship and be able to transfer or sell the asset to others at any point (no different than buying into a stock IPO and determining when to sell your shares).

Consider the JPEG image as the digital face of your loyalty card, country club membership or pool card (some of which look really cool while others just provide benefits). Think of it as your access into tickets, memorabilia, IRL experiences and future pieces of art. And unlike what you have in your wallet now, you can sell it anytime you want as long as there is demand and thus a buyer. 

In this new digital world these assets are called utility and fans want a roadmap of them so they have something to look forward to and to increase the value of it for possible sale or building an engaging community. 

To me, it is just called adding value to create demand and stickiness. Each collection is a limited-number of loyalty cards that are sellable by the user and increases or decreases in value dictated by the work the founding team puts into it.

The moment a sports league, club and/or athlete mints their NFT and it sells out (hopefully), the community will ask you about decisions. Will we get to vote on an upcoming project? What unique merchandise do we get that non-holders do not have access to? How are you going to create demand? 

They will also ask about specific NFT language (ps - learn the language). When do we get an airdrop to put into our NFT wallet? Will you update me daily on discord? What is your 2.0 collection? What advantages do I get if I hold multiple NFTs or rare ones? Why isn’t the floor increasing? What collab or whitelist opportunities do we get?

Be ready. These questions will begin within minutes of launch…and they do not stop. Because these holders want marketplace demand for the collection. 

And to create demand, the non-holders must perceive that by owning the NFT, they are going to get access to items (digital, IRL, experiences, etc.) of greater worth than it is trading at right now.

Greater worth than it is trading at right now.

Think of the NFT as a hotel key card when you check into the city where the Super Bowl is being played. The physical card is that JPEG image but the NFT is what it unlocks.

Let’s use three different key cards to consider.

·       The “first-floor” key card has the logo of the hotel chain and by paying for it, it provides you one queen bed and a bathroom. It has value to you because you have work at the Super Bowl and are excited to see your favorite team play.

·       The “concierge” key card has the Super Bowl logo marks on it and when you check into your ocean room view there is exclusive, personalized merchandise of your size hanging in the closet for you. There is also a key on a table that provides you access to a private penthouse with f&b for celebrities and business executives staying in the hotel. You might even be able to sell that key card on ebay after your trip to Super Bowl collectors. 

·       The “VIP” key card actually has nothing written on it. It is blank. But when you use it to enter your two-bedroom suite, in addition to the personalized merchandise and key on the table, there are also two Super Bowl tickets, wristbands for nightly and a lovely bottle of champagne. A note on the table reads if you own this VIP card, it provides annual access to the hotel (in relevant market) every year for the days in-and-around the Super Bowl.

You see, all three hotel rooms will sell. There is enough demand in the market around each Super Bowl that getting a room matters. But that is the only similarity of the three key cards. Each card offers varying degrees and lengths of value. The VIP card will matter in perpetuity (or at least as long as there is a Super Bowl) and will resell regularly if the owner chooses to do so. The concierge key will have demand for people that collect Super Bowl related items (art) and those that care about access that particular week to celebrities and business executives. And the first-floor card matters to anyone that wants or needs to be in town during Super Bowl week. 

It is also important to think through NFTs audiences. There are die-hard fans of the athlete/team/league, web3/NFT/crypto native and savvy investors believing in the long-game and flippers/traders who see unique opportunities to buy and sell quickly (often in a few minutes after purchase). As a NFT creator, focus on the former two audiences. Fans and Investors. They are your community to engage and build. But note, each of these two audiences have different opinions of value. Build and engage accordingly. 

The real NFT journey begins ‘the day after’ your NFT is minted. Build the roadmap, listen to your audience(s) and provide value to increase demand. Have fun…it’s a new world to explore and trial.

The real work begins the day after.