The English Premier League is exploring the fast-growing market for digital collectibles, which are raising hundreds of millions of dollars for artists and entertainment groups, as cash-strapped sports leagues hunt for new revenues.
The league, the world’s most-watched domestic football competition, has begun to assess how it might capitalise on growing demand from fans for “non-fungible tokens” — lines of code used to connect someone with an asset such as digital artwork or a highlight from a sporting event.
The move would follow in the footsteps of North America’s National Basketball Association, which has created NFTs based on short clips from matches.
Artists and other sports businesses have already joined the craze, although there are concerns that the links to cryptocurrencies, which are used to buy and sell NFTs, are fuelling lofty valuations. One token, representing a digital work by artist Beeple, sold for almost $70m this year.
“We are looking into it, and see the digital collectibles space as an area of interest to fans, the Premier League and our clubs,” said a person close to the league’s leadership. “[They are] currently looking to establish the right route if any for the PL to take.”
However, the league is yet to decide whether to enter the NFT market. Some clubs may prefer to handle their own strategies independently rather than collectively, the person said.
By the end of the season, English clubs will have lost about £2bn in ticket sales and broadcast income since the start of the pandemic, Premier League chief executive Richard Masters has said.
The NBA’s Top Shot venture has logged roughly $550m in transactions, according to tracking website cryptoslam.io, even though similar clips can be viewed for free on YouTube, the Google-owned streaming platform. Transactions worth more than $400m took place in February and March.
Developer Dapper Labs, the NBA and the players’ association split revenues from the sale of Top Shot packs, as well as taking a 5 per cent cut of each sale on the secondary market.
Encryption means that a person’s association with an asset can be traced on blockchain, the technology that also underpins digital currencies such as bitcoin and ethereum.
Ultimate Fighting Championship, the mixed martial arts series controlled by Endeavor Group, the media company founded by Hollywood impresario Ari Emanuel, in February agreed a licensing partnership with Dapper Labs, the blockchain company that partnered with the NBA. The deal will allow fans of UFC to buy and trade as yet unspecified digital collectibles.
Dapper Labs raised $305m from investors led by Philippe Laffont’s hedge fund Coatue Management and basketball legend Michael Jordan in March.
Formula One, the global racing series owned by US billionaire John Malone’s Liberty Media, has struck a similar licensing deal with Hong Kong-based Animoca Brands, which developed and published F1 Delta Time, a blockchain game in which users trade tokens representing cars, drivers and even tracks.
The first in-game NFT F1 car sold for what was then the equivalent of $113,000, or 415.9 ether. The subsequent increase in the price of the digital currency means the car is now worth more than $1m.
Manchester City, the Abu Dhabi-owned Premier League team, partnered with Animoca last December to develop games and digital assets.