PricewaterhouseCoopers highlights the potential (and the potential pitfalls) for NFTs in the sports industry in their annual Sports Outlook report.
The next evolution of sports fan engagement is going to come in the realm of Web3. With the recent boom of NFTs, franchises exploring entry into the metaverse, and all of the possibilities that digital collectibles provide, this isn’t exactly a bold statement.
But PricewaterhouseCoopers takes it a step further in its annual Sports Outlook for the year ahead. The report makes 10 predictions about the sports industry, including that NFTs and digital assets will become critical pieces of the sports technology infrastructure — particularly when it comes to access in-stadium.
Subscribe for the biggest stories in the business of sports and entertainment, daily.
NFT Evolution
Over the past year, NFTs have become more than just collectibles. Sure, non-fungible tokens took the broader sports world by storm via the NBA Top Shot boom of 2021 and are equally known for the exorbitant prices A-Listers pay for their Bored Apes. But in everyday life, the possibility of merging real-world elements with the collectible experience of NFTs presents teams and leagues with a world of opportunity.
“NFTs related to tickets and memorable events will become commonplace,” PwC managing director for sports and former Cleveland Browns CFO Mike Keenan told Boardroom. “We’ll also see a lot of new and better use cases for NFTs, with utility added in the form of access, voting rights, exclusive events, and more.”
One of the major criticisms of NFTs in the mainstream — and one that Keenan acknowledges is very real — is that some use them as “get rich quick” schemes. Basically, those who have had the means to mint NFTs have created a universe for tokens they claim have value, suckering buyers into emptying their wallets for something with no real utility and that will not appreciate. Keenan also knows there is an NFT bubble with a “reckoning” soon to come — both for those profiting and those who have sunk hundreds or thousands of dollars into their NFTs.
While this means some may shy away from NFTs in the future, this is a necessary evolution of the industry that will favor companies looking to use digital tokens to truly serve their customers.
So, what does this mean for sports?
There’s still going to be a place for collectibles. NBA Top Shot already took care of putting trading cards in a digital space. We’re now seeing the start of the “before they were famous” phase of the NFT market, highlighting minor leaguers or college prospects.
Think what Postgame is doing, for example. PwC sees similar projects booming in value over the year ahead, with the next step being to authenticate and limit on the blockchain highlight videos from the next big stars — imagine a Bronny James NFT of a crazy dunk in a high school game, for example. It’d be fun to buy now, and its value will only increase as Bronny moves from high school to college to the pros.
Your Ticket In
Beyond that, ticket stubs are a logical NFT entry point. PwC anticipates NFT tickets evolving to include game highlights, displayable in the metaverse, or sellable as a collector’s item after the fact. Displaying your memorabilia in the metaverse will, in itself, take on a life of its own. After all, having a 1-of-1 collectible isn’t nearly as cool if there isn’t a digital office to display it in.
If ticket stubs are going to live on the blockchain, it introduces opportunity for ticket holders — specifically season ticket members (STMs) — to use their tickets as something of a VIP pass. Yes, your ticket stub gives you access to the stadium, but PwC argues that a tokenized pass can do more than that:
- It can track the number of games you attend, all in one place, and offer the most loyal fans rewards for attendance — either virtual or IRL
- Sponsors can use them to track game attendance and offer product discounts without the fan having to worry about losing their ticket stub (just think about how often on the back of an old, paper ticket there’s a discount code to, say, a local sporting goods store)
This offers a direct benefit to teams as well. Keenan used the Dallas Mavericks as an example; they have a partnership with Ticketmaster such that when a fan scans their ticket into the arena, they receive access to an NFT from select games. Those NFTs can then be resold, giving the attendee a reason to keep going and collecting. And thanks to the power of smart contracts, the team gets a fully transparent cut of the sale for perpetuity the way.
Premium Access
PwC’s report shows that the possibilities for NFTs in the live sports space are truly endless, and the technology exists to do just about everything it suggests. The only question is which franchises are going to be the first to cross each frontier.
PwC imagines a “velvet rope” that those willing to pay a price for could cross, giving them access to athlete interactions, unique game viewing experiences, and more.
A digital world would give teams an entirely new universe to brand and monetize. It can also give fans and athletes a new playground to interact and for the fans to be rewarded. The most obvious problem here, however, is that if NFTs are the gateway into this new world of the fan experience, then there will be a monetary barrier to entry.
Keenan says this problem may not be as serious as you think. Much like how fans can spend $20 on bleacher seats or $1,000 to sit up front, there are different spending tiers regarding digital assets that can all provide a unique experience.
“The truth is that most NFTs sold in the coming months will have much more mundane prices — many will be sold for no more than a souvenir baseball bat or hockey stick,” he said. “They will provide digital souvenirs, and maybe access to bonus content, at a price that most fans can afford.”
Even if most fans are priced out of the most premium experiences, this is a far cry from the get-rich-quick scams that PwC cautioned about. Accessibility will be key, but we’re already starting to see the potential.
“When done right, NFTs should be massively powerful digital tools to reach a broader audience, and enable them to receive perks, access, and memorabilia in support of their favorite teams,” Keenan said. “That is something that should have value for — and be accessible to — everyone.”
Click here to read the full 2022 PwC Sports Outlook.
Subscribe for the biggest stories in the business of sports and entertainment, daily.
