7 min read

Issue 12: MLB doubles down, NFT for equity, platforms keep struggling

Issue 12: MLB doubles down, NFT for equity, platforms keep struggling

Here's your weekly review on what happened at the intersection of NFTs and Sports:

  • 🍬 MLB partners with Candy Digital for new collectibles
  • ⚽ Mexican team Necaxa offers 1% equity via NFT sale
  • πŸ‘Ύ The Olympics, Euroleague Basketball and LaMelo Ball
  • πŸ“Š Monthly data check: Sorare vs. Topps MLB vs. NBA Top Shot

πŸ‘‹ Plus: Our Nifty Sports Discord server is live! Join us to discuss the latest news and insights about NFTs in sports.

Make sure to follow us on Instagram and Twitter for the latest news.

🍬 MLB partners with Candy Digital for new collectibles

Hold on, didn't MLB just kick off their NFT journey with Topps in April? Yes, they did. But it seems like they're now not only diversifying in terms of which type of collectibles they go for but also the partners they're working with. A recent article on mlb.com stated that the MLB has entered a long-term agreement with Candy Digital on a "wider range of baseball digital collectibles - for example, memorabilia-style NFTs, or baseball card-style NFTs, or artwork-style NFTs portraying big moments on the field, or NFTs of highlight plays". Especially the latter, NFTs of highlight plays, is interesting as it hints towards a potential offering similar to NBA Top Shot.

The other interesting part is the company that MLB is partnering with - Candy Digital. Never heard of them before? Well, it's because the company was just set up and is a joint venture launched by Fanatics chairman Michael Rubin (Fanatics already sells MLB merchandise), Galaxy Digital CEO and crypto investor Mike Novogratz and entrepreneur Gary Vaynerchuk. Quite a powerful combination in many aspects, such as the audience they can reach and the (blockchain/NFT) experience they bring in!

This is one of the most exciting announcements we've seen in a while. Let's see what the products will look like.

Source: MLB, Candy Digital

⚽ Mexican team Necaxa offers 1% equity via NFT sale

Here comes an interesting one. Soccer club Necaxa launched an NFT auction that includes a unique 1% equity ownership interest. It is not subject to dilution or future capital calls and remains transferable on the blockchain but does not include any voting rights. Besides owning a part of a professional soccer team this also comes with a few additional perks:

  • Access to the team and its facilities
  • Tickets to home and away games
  • Championship rings
  • Team merchandise.

The offering is auctioned on OpenSea with a minimum bid of around $1.3m.

Our take: Even though we're a bit sceptical if someone is gonna bid based on this valuation the approach itself is a creative one and shows the potential of NFTs. Especially because this is so easy to set up from a tech standpoint. Once bought the owner of the NFT can easily and indisputable identify him or/herself as part-owner of the club and even transfer the equity share with a few clicks to someone else (that obviously comes with some risks as well - don't drink and trade NFTs...) We expect many more experiments and innovative approaches in this area!

Source: Necaxa

πŸ‘Ύ The Olympics, Euroleague Basketball and LaMelo Ball

And then there were a few other NFT drops/announcements that sparked our interest. Let's have a look at the most relevant ones:

πŸ† The International Olympic Committee (IOC) has partnered with nWay, a subsidiary of Animoca Brands (these guys are all over, see last weeks issue) to publish officially licensed Olympic NFT pins. The inaugural set "celebrates the art and design of the past Olympic Games and reflects the graphic legacy of the world’s largest sporting event, such as posters, emblems, pictograms, and mascots from 125 years of modern Olympic Games". The most interesting part of the announcement is that you can not only just buy the pins (dropping June 17) but also earn them "free of charge by playing a real-time Olympic-themed competitive video game connected to nWayPlay and to be launched in the lead up to the Olympic Winter Games Beijing 2022". We appreciate the forward thinking mindset of the IOC and can't wait to see what the game looks like. One to watch!

Source: IOC, nWay

Coming from a federation to a league:

πŸ€ The Euroleague Basketball has partnered with the Euroleague Players' Association (ELPA) and tech partner OARO to create its first series of NFTs surrounding the Final Four 2021. The offering has been developed with joint-venture partner IMG.

So what does that mean exactly? The official collection will launch on June 11 (sign up early to get a free NFT) and will consist of "a series of current and historical moments from the vast archive of 21 years of EuroLeague competition, as well as enhanced statistical information about players competing in this weekend's Final Four." The launch will be followed with a variety of additional assets in the future. It looks very similar to NBA Top Shot and we're especially interested to see the performance of the OARO platform, as we have witnessed some struggles on launch days of other platforms.

By the way, OARO has quite an exiting tech offering around digital security solutions, reaching from skin temperature detection over facial recognition to ticketing solutions.

Source: Euroleague Basketball, ELPA, OARO

We're staying within basketball but move on to a player:

πŸ€ LaMelo Ball from the Charlotte Hornets has announced his first NFT collection. And is not a usual one. Sher Chaudhary, co-founder of Playground, the Southern California-based NFT design studio working with Ball, says:

"LaMelo will become the first athlete to mint his career on the blockchain. We're launching a world where each NFT carries 'level up' capabilities based on off-chain events."

So what does that mean? Ball is creating so-called "dynamic NFTs" that upgrade themselves depending on his career achievements. Need an example? Today, June 4th, he releases a set of 500 NFTs prior to the announcement of the NBA Rookie of the Year award for which he is seen as the frontrunner. In case he is named the winner, the NFTs will automatically update to include the award and potentially increase their value. The same could be done with other achievements or stats in the future. Owners will also get the option to burn the tokens (in other words: destroy them) for a chance to win memorabilia such as game-worn shoes. Also this potentially increases the value of the remaining tokens. In total Ball will offer 10,000 tokens. Independent from the question whether this is the best solution from a technical standpoint we think that this is a cool, new approach.

Source: ESPN

πŸ“Š Monthly data check: Sorare vs. Topps MLB vs. NBA Top Shot

Every month we compare relevant stats of the leading NFT platforms in sports. While last month was already a tough one (see issue 8) the downwards trend continued in May. Here are the numbers:

  • The most important one first: Sales for both MLB Topps and NBA Top Shot broke down around 50% each while Sorare was less affected with around -9%, maybe benefiting from the fact that May was the "decision month" for most of the big leagues and fans having their eyeballs on them. Still not enough for a turnaround though
  • The MLB saw a 50% decrease in transactions as well, probably connected to a lack of further drops after their initial one in April. Both other platforms stayed somewhat stable
  • Top Shot on the other hans had a 50% decrease in average sale price, potentially an effect of a sheer never ending supply with new packs dropping almost every week
  • Probably the best news for Sorare and Top Shot: Unique Buyer numbers stayed somewhat stable while MLB Topps had a huge decrease. Seems like the two platforms have build a loyal core user base that keeps being active, just with lower average prices and therefore also lower total sales.

We're curious to see the effects of Euro 2020 and NBA Playoffs on the June numbers!

πŸ€“ Wrapping it up

So what have we learned in this week's issue?

  • The MLB doubles down on NFTs and diversifies its portfolio and the partners they work with. Is that based on the experiences with Topps surrounding the digital player card drop? We don't know, but bringing on a strong partner with the newly set up Candy Digital seems powerful to us
  • NFTs can be used to sell equity as the Necaxa example shows. We really like the approach when played well as it's a creative new way of raising money (when will the first startups follow?!). Let's see which risks/disadvantages come along, as ownership can now be transferred with a few clicks and without background checks, votings, etc.
  • The Olympics are joining and combining the NFTs with gaming mechanisms, something we're naturally curious about. La Melo Ball brings dynamics not only to the court but also drops what probably is the first dynamic NFT connected to his career achievements
  • Last but not least: The top sports NFT platforms are struggling, just like the overall NFT market which is down 90%. We are not worried though (and slightly biased obviously) as we already wrote in issue 8 that the NFT market will go through the typical hype cycle development to identify which approached create benefit and can lead to mainstream adoption

That's it for this weeks issue! And as always: Feel free to reach out for feedback and to discuss all things NFT and sports! And to stay up to date: Make sure to follow us on Instagram and Twitter for stats, drop announcements and more. And join us on our Discord server to discuss the latest news and insights about NFTs in sports.