Written April 12, 2022, 12:48 p.mUpdated on April 12, 2022 at 12:51 p.m
What is an NFT?
The name NFT is the abbreviation for the English ‘Non-Fungible Token’, in French a ‘non-fungible token’, that is, it is unique and not exchangeable. An NFT is a tamper-proof digital certificate of authenticity whose ownership can be traced using blockchain technology. Specifically, it is a contract whose rules are defined by computer code, based on a virtual or real object.
These rules may limit the number of copies available for sale, allow reproduction, or organize a system of royalties (author’s rights) that allows the original author of a work to be remunerated during each transaction.
It is a new type of highly speculative digital asset, like cryptocurrencies, that uses blockchain technology, namely an authentication ledger shared among a multitude of individuals without a central authority.
They are divided into collections. Owning an NFT also allows you to belong to a community and sometimes gives access to physical events such as conferences, football matches or meetings with professional players.
Who are NFT’s players in sports?
They mainly are “the rights holders, the clubs” and sometimes athletes themselves who venture into this technology, explains Magali Tézenas du Montcel, sports economist and general delegate of Sporsora, an interprofessional association that works on the development of the sports economy.
Only sports included “enough audience” has begun, such as football, rugby, basketball with NBA, tennis or even cycling, with trading cards that can be used in Fantasy League or even “moments of sports to acquire (victory for Wout Van Aert in the Tour de France on the Mont Ventoux stage, decisive basket for Stephen Curry, etc.).
Big players in this technology, such as Sorare, a French soccer player who exchanges online gaming unicorn, worth 3.7 billion euros, have emerged in sports through these digital goods.
Why is this technology attractive?
NFTs make it possible to create “an additional source of income” for these actors, while strengthening the links between a fan and an athlete or a club, analyzes Patrick Mouratoglou, coach of Serena Williams and more recently of Simona Halep, who launched his collection ‘The Coach’, connecting 500 “digital assets” for real experiences at $500 each.
They can be resold on the secondary market and “clubs can earn commission” with each transaction “by commercializing intellectual property”explains Thibaut Predhomme, deputy director of Sorare, without revealing the value of these amounts.
It is also one “new opportunity” for the sports world in one “Crisis Period” economy linked to the Covid-19 pandemic, adds Magali Tézenas Du Montcel. “This virtual site makes it (also) possible to engage fans who are geographically distant from the club”to accentuate this relationship or to seek new ones, she specifies. “I became invincible in Japanese football”says Alexandre Hourcade, Sorare player, who plans to buy a shirt from a J-League club after discovering this championship in a month’s play.
This link, Mouratoglou notes, is even stronger when NFTs have a physical part like those of ‘The Coach’ collection, where buyers become ‘partners’ and can participate “at conferences, receive autographed items from players, hold coaching sessions…”.
NFTs are finally used as a vector for “renew” the spectator base as in tennis, where it is “extremely old, it is therefore crucial to seek out young people and these new technologies can open interesting doors”he concludes.
Who buys these ‘sports’ NFTs?
Two types of population are interested in NFTs, explains Magali Tézenas Du Montcel: collectors who are sports fans and speculators “that has no connection to sports” but hopes to realize a capital gain on resale. They are generally aged between 25 and 35 and are “mainly male”. ” around the world “ with a certain purchasing power and a “interest in these new technologies”she says.
“I looked at it when I saw the opportunity to make money while being a football fan”testifies Alexandre Hourcade, a 25-year-old computer engineer who invested 800 euros in NFTs, whose value is now 900 euros.
These most interesting digital assets often exceed several “hundreds of dollars”although those from the Sorare collection and NBA Top Shot sold on average under 100 euros last week, according to various marketplaces.