7 min read

Issue 38: Big deals, big brands, big stats

Issue 38: Big deals, big brands, big stats

We're back! After taking a few weeks off we're keen to see what 2022 will bring to the sports NFT space. We'll begin with highlighting the most important news from the past few weeks.

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

  • 💰 Big deals in the NFT Sports world: FCFL, Fanatics, RKL
  • 👾 Adidas' first drop, Under Armour x Steph Curry, Australian Open
  • 📊 Review: 2021 comparison of Top Shot, Sorare and Topps MLB

Let's have a closer look! 👀

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💰 Big deals in the NFT Sports world: FCFL, Fanatics, RKL

Over the last weeks we've seen a few deals in the Sports NFT space:

  • This is a big one: Fanatics acquires the collectibles and trading card business from Topps! We wrote about Topps' struggles last year when they lost their longterm deal with the MLB and the planned SPAC fell through. This now results in the Fanatics deal who secured themselves not only one of the household names in the space, but also some lucrative (NFT) licenses, like the recent UEFA Champions League deal that Topps was able to secure. Also their expiring deal with the MLB is of value, as they can make an earlier switch to Candy Digital (who had secured the follow-on deal).
  • Fan Controlled Football League (FCFL), known for allowing fans to have influence on many things around the teams and in-game situations, has raised $40m. "The Series A funding round was led by Animoca Brands and Delphi Digital and included involvement from all of the league’s initial seed investors, including Verizon Ventures. FCF says the additional capital will be used to facilitate further growth and expansion." The league will introduce four new teams that are part of the Ballerz NFT collective, meaning that NFT holders receive a"range of governance rights, play-to-earn game mechanics and real-life experiences at the FCF’s planned state-of-the-art venue in Atlanta."
  • Rumble Kong League, a competitive 3v3 basketball game where each NFT avatar is a player on the court, has secured a $4.5m funding round from JDS Crypto, CAA Sports, Framework Ventures, IDEO CoLab, Animoca Brands, and NBA star Paul George. The biggest focus for RKL is to deliver the promised game that will include play-to-earn mechanisms and reward holders of the 10,000 kongs. But the announcement also states that other areas like streetwear, metaverse fashion or music are possible as well. We're curious to see how successful the game will be!
Source: Rumble Kong League

👾 Adidas' first drop, Under Armour x Steph Curry, Australia Open

The big funding rounds aside, there were some other highly interesting things happening in the Sports NFT world.

  • adidas had a very successful first NFT drop which secured $22m in revenue within a few hours and as of today over $53m in sales on the secondary market of which adidas gets 10%. For the drop they've partnered with Web 3 heavyweights Bored Ape Yacht Club and Pixel Vault as well as crypto influencer gmoney. Adidas did not unveil any concrete plans of what exactly the holders of the NFT will get in the future, but announced that there will be various rewards including physical merchandise.
Source: adidas
  • Under Armour launched a charitable NFT to celebrate Stephen Curry’s 3-point record, turning the shoe he wore when breaking the record into an NFT that can be worn in the metaverse. The partnership also includes Rumble Kong League, meaning that Curry's shoe can be used for the project's upcoming game. The digital shoe sold out in minutes. "In total, 2974 editions of the digital asset were sold to commemorate the 2974th record at a fixed price of $333, bringing total revenues of the initiative above $990,000."
Source: Under Armour
  • The Australian Open have "partnered with Decentraland, Run It Wild and Metakey to create 6,776 ‘art balls’ produced from an algorithmic combination of different colours, patterns and textures. An additional 22 ‘AO Legend’ and 169 ‘Artist Series’ balls will feature unique designs made by legacy and NFT artists." Each NFT represents a section of court and "every time a winning shot lands in that plot during any match at the 2022 Australian Open, the relevant NFT will be updated in real time with match and ball tracking data. Should any of the 11 championship points land on a particular plot, the corresponding NFT owner will be given the tennis ball used in a display case and a certificate of authenticity." The tournament is "also launching a metaverse experience on Decentraland’s platform. Users will be able to look around a digital recreation of the Australian Open’s grounds in Melbourne and speak to players and other fans." All art balls were sold out quickly.
Source: Tennis Australia

📊 Review: 2021 comparison of Top Shot, Sorare and Topps MLB

Throughout 2020 we shared a monthly overview of sales and user stats for the most relevant NFT platforms in pro sports: NBA Top Shot, Sorare and Topps MLB. Now that the year has concluded let's have a look at the stats for the last 12 months.

Data source: Cryptoslam

NBA Top Shot had two massive breakout months in Q1 with over $200m in sales each, followed by a rapid decline in the following months. Ever since the sales number are staying within a corridor between $20m and $45m per month.

Sorare had a great month in Q1 as well, with $15m in sales, but after slowing down a little bit we've seen the sales numbers growing steadily. Multiple record month followed later in the year, with December being the best one with about $30m in sales, bringing the platform in the range of Top Shot's sales numbers.

Topps MLB had a strong month of April, with $8.5m in sales. Ever since the numbers have been decreasing. All this is likely connected to the tech issues they were having and the end of the deal between the two parties. Without any new drops happening it was obvious that sales numbers would struggle.

Data source: Cryptoslam

When looking at the unique buyers, one of the most important stats, the numbers reflect what the sales numbers have been telling us already: Top Shot started strong, followed by a decline. Sorare is on a steady growth pass and Topps MLB keeps being on a low level. If you combine all unique users (and not even considering that some might use multiple platforms) their numbers have been below 100,000 per month, still way too low for these global brands with huge fanbases.

🤓 Wrapping it up

So what have we learned in this issue?

  • Venture Capital is racing into Web3. While 2020 has mostly seen massive deals for the big player card and highlight clip platforms in the market (Sorare, Dapper, Candy, etc.) 2021 might see a much more diverse investment portfolio. Funds and also athletes are investing in collections like Rumble Kong League, likely to be part of the Play-to-Earn gold rush that everybody is expecting. Also the investment into FCFL is an interesting one, as it basically secures a share in a pro sports team. Many more use cases will follow and investors will be keen to jump on many of them.
  • Execution is getting much better. All success cases aside, 2021 was also full of questionable NFT projects and quick cash grabs. While that will not entirely go away, it seems like the big brands have gone through some first learnings. The well executed projects of adidas, Under Armour and the Australian Open show this. Adidas did a smart move in collaboration with two of the most trusted projects in the NFT space, Under Armour went for the combination of adding Steph Curry and working with one of the most promising projects (RKL), while the Australian Open managed to include a great connect to the tournament and a gamification element. Let's hope this trend will continue.
  • Sports NFT platforms still have a mass adoption challenge. If you look at the overall sales in 2021 the numbers look pretty good, with Top Shot generating over $800m and Sorare over $150m. But the monthly unique buyers are mostly way below 100k. While it is impressive that the platforms generated these massive sales with such a small buyers group, this can't be a model that is sustainable in the long run. Hence the biggest task for 2022 seems to be an easier onboarding and usage of their respective platforms, so that more people are willing to join the NFT journey.

And 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! To stay up to date: Make sure to follow us on Instagram and Twitter for stats, drop announcements and more.