The financial downturn, the expanding fan base, the lure of sponsors… Are NFTs the new Eldorado in the world of sports?

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They are not the first, but they are far from the last. The French Tennis Federation (FFT) is launching its first NFT collection, which is on pre-sale for licensees on Tuesday, May 17, before the public sale on Thursday. NFT, an abbreviation of the English “non-fungible token” meaning “unchanging token” in French, is the new business that has caused panic in the sports community.

Obviously, NFTs digital objects can be in various formats such as pictures, maps or videos. Each NFT issued is unique. To ensure their authenticity, these NFTs have tamper-proof property rights based on blockchain technology (identifying cryptocurrency exchange transactions). Oftentimes, NFTs are sold on proprietary platforms and the purchase is made with bitcoin or ether, two of the competing cryptocurrencies. As with rated artworks, NFTs can be resold and appreciated.

NFTs have established themselves as real investments far beyond sports. most Main NFT trading site OpenSea went from a few tens of millions of dollars in NFT sales in early 2021 to a record $10 billion in November of the same year.

“Apart from finance and the ‘tech’ sector, luxury and sports are the sectors that invest the most in NFTs.”

Julien Pillot, economist, teacher at Inseec and specialist in technology markets

on franceinfo: sports

Why ? “Only because they have the most obvious application areas”, The economist answers Julien Pillot, a teacher at Inseec and an expert in technology markets. Like any investment, NFTs are not without risk and are dependent on speculation. Indeed, once you buy an NFT, no one can tell how its value will evolve. Likewise, cryptocurrencies that allow the exchange are tied to a floating price.

However, this argument did not discourage the sports community. Since 2018-2019, more and more players in the world of sports, clubs, sports federations or athletes are investing in these digital assets. For now, only highly advertised sports like football, rugby, basketball, tennis and even cycling have tried their luck.

In 2021, the NBA released the NFT collection in the form of several seconds of video excerpts showing the game action that marked the history of the American league. French start-up Sorare has had great success with collectible NFT cards for 6,000 football players, also known as virtualized Panini cards. This company was worth around 4 billion euros in the fall of 2021.

The French Tennis Federation (FFT) is launching its collection of 5000 NFTs, representing seats on the Philippe-Chatrier court, on Tuesday, May 17th.  (French Tennis Federation)

FFT is releasing its 5,000 NFT collection on Tuesday, May 17. Each will represent a numbered seat of the Philippe-Chatrier court, with a unique design for each. The peculiarity of this project: The purchase of NFTs will not be made in cryptocurrencies, but in euros with a credit card on a special Roland-Garros site. “We are deliberately cautious in this project, we don’t want to rush and take risks in mechanics that we don’t know well yet”, Denotes Amélie Oudéa-Castera, managing director of the FFT.

Unlike derivatives that are sold only once by brands, NFTs can be resold forever. And the whole point is that with every resale of NFT, the creator can get a percentage. “NFT is a contract worthy computer program. The creator of NFT may set a rule that on every resale, the club and/or the player whose image is used will receive a percentage back of the promised amount”, explains economist Julien Pillot.

“Every project has strategic goals. NFTs and blockchain are just one technology. You will use them in different ways depending on who you are and what your goals are.”

Julien Pillot, economist and teacher and specialist in technology markets at Inseec

on franceinfo: sports

Indeed, qWhile the NBA broadcasts the best moments in league history in NFT format, its aim is to find an additional communication channel to talk about the NBA, and to find enough additional income.

NFTs are a It’s a way to generate new revenue streams for clubs and federations, but it has other advantages as well. “NFTs also make it possible to create fan engagement around brands, especially those who are distant. Those who are not used to going to the stadium and consume sports differentlyand that’s a real challenge for clubs and competitive brands today”, Develops Magali Tézenas du Montcel, specialist in sports economics and general delegate of Sporsora (reference organization for thinking and influencing the development of sports economy).

For this, the purchase of NFT, in most cases, includes special benefits for the owner. It’s a way to establish a digital connection with the fans and integrate them more or less into the life of the club or a competition. This is the challenge of the NFT project, which was launched on May 25 (pre-sale, on the 26th for public sale) by Sedan Ardennes Sports Club, a football club playing in National 1.

“Our goal is to build a crypto community, refers to club president Marc Dubois. We prefer digital approaches as we are in a region with a limited population and this operation is clearly part of an approach to develop and develop the club. The purchase of one of 11,011 unique NFT cards in 0.05 ether (i.e. 133.99 euros) featuring the image of the Ardennes wild boar, the club’s mascot, will allow recipients to redeem gifts, participate in competitions or participate in the club’s physical and virtual events. club.

The NFT collection, launched by Sedan Ardennes Sports Club, consists of 11,011 cards with the picture of the Ardennes pig, the club's mascot.  Each card is unique and each card includes accessories, backgrounds, coat color, etc.  There are different details such as  (Sedan Ardennes Sports Club)

The aim is the same for the French Tennis Federation. Those who purchase digital seats at Central will have access to a club where a number of exclusive benefits will be reserved for them: the possibility of earning points from matches played at Central during the 2022 edition, VIP tickets for Roland-Garros and Rolex Paris Masters, personalized visits to the field or meetings with transferring players.

Stade Français, the first Top 14 club to join the NFT last March, chose another option. After offering them to buy cards that bear the image of the club and its players, the club wants to go even further. “Our NFTs will be powered by a fantasy game (game where participants take on the role of sports team owners and challenge other players based on the results of real players and teams, editor’s note) a first in the oval for next season, announced Georges-Henry Bediou, the club’s director of development and communications. The cards will have a dual function: a collecting role, which is the traditional role of NFTs, and they can also have a role in the game.”

Therefore a pair of functions that will bring additional value to these NFTs depending on performance. “We can cover this with a bunch of little marketing talk like building a new community or attracting new audiences, but the reason for these various projects is financial first and foremost”, advocates economist Julien Pillot.

These new communities are attracting both large and small clubs, and with good reason, because a large community is an important asset to sponsors. “If your fan base is larger, you will earn money with partners, which will indirectly bring income to the clubs”, Translates sports economics expert Magali Tézenas du Montcel.

Also, the NFT approach is part of a broader logic, diversification of sports economics. The economic model of football clubs, whether professional or amateur, needs to be rethought. All clubs are in trouble. Sedan points to Marc Dubois, president of the Ardennes Sports Club.

“If we hadn’t started an innovation process in the Sedan, the club would have had a hard time surviving.”

Marc Dubois, President of Sedan Ardennes Sports Club

at franceinfo sport

If the Covid pandemic and its financial repercussions could trigger certain dynamics, “However, nothing indicates cause and effect for this enthusiasm for NFTs”, supports economist Julien Pillot. “LThe most important factor of our project is this innovation, which is bubbling more and more in the world of NFTs. We didn’t want to be left out.” He knows Amélie Oudéa-Castera. The next step is the metaverse, in other words the virtual world, which sports players are starting to take ownership of? “Actually that’s the next consideration. It’s part of our Metaverse roadmap.” That’s why the world of sports has not finished reinventing itself.