Pro Sports & Web3
The rapid expansion of Web3 projects and technologies has led to a union with professional sports teams, leagues, and athletes. When a market sees explosive growth, individuals and businesses want to be a part of it. There has been an opportunity to make money in this space to be sure.
However, an equally exciting aspect of Web3 projects goes beyond profits. There is a level of hands-on involvement that can be achieved. The entire goal of Web3 is to realign ownership and control of the internet and content to the individual user. This can allow for a better experience for leagues, teams, athletes, and ultimately fans.
The Marriage Between Professional Sports and Cryptocurrency
There are multiple ways that major professional sports leagues have partnered with Web3 projects. Some of the most influential have been involving cryptocurrency firms. Leagues, teams, and players alike have a stake in crypto, and vice versa. Let’s start by looking at the sponsorship deals between crypto companies and leagues.
Major League Baseball signed a deal in June 2021 with FTX crypto exchange, the first-ever partnership between a league and crypto company. Part of the sponsorship was to affix an FTX.US patch on umpire uniforms. MLB players were part of the agreement, according to MLB.
The National Basketball Association landed its first major cryptocurrency sponsorship in October with Coinbase. The partnership consists of ‘unique content, innovations, activations and experiences from Coinbase to educate fans on the increasing advancements happening across the cryptoeconomy’, according to an NBA press release.
The National Football League has taken a wait-and-see approach to partnering with crypto companies. As recently as September 2021, the league told its teams that they could not sell sponsorships to cryptocurrency firms. More recently, however, the NFL granted some permission to its franchises to seek blockchain alliances, per a CNBC report. Perhaps this will pave the way for a larger business strategy for the league.
While the National Hockey League does not have any league-wide partnerships with the crypto space, multiple teams have deals in place. International soccer teams, the Ultimate Fighting Championship, and Formula 1 are all heavily involved in various synergies with the cryptocurrency industry. Forbes reported that crypto partnerships with sports teams and leagues grew by over 100% in 2021. The value of these deals is expected to hit $5 billion by 2026.
Outside of the league-wide agreements in place, many individual teams are working with crypto partners. The highest-profile news in this area was the massive deal between AEG and Crypto.com for naming rights to the former Staples Center. AEG announced the pact in November 2021 as a 20-year naming rights agreement. The deal is reportedly worth $700 million to serve as the home of the NBA’s Los Angeles Lakers and Clippers, the NHL’s LA Kings, and the WNBA’s Los Angeles Sparks.
This is not the only such pact in the major North American leagues. The Miami Heat partnered with FTX in June 2021 (the company with the logo attached to MLB Umpire uniforms) to rename its home FTX Arena, according to the NBA. The NHL’s Montreal Canadiens have a sponsorship deal with Crypto.com and multiple NHL teams now accept cryptocurrency as a form of payment from fans.
Multiple high-profile athletes are also taking some or all of their salary in cryptocurrencies. The NBA’s Klay Thompson, Andre Iguodala, and Cade Cunningham are among the athletes reportedly being paid with crypto. They join other famous athletes like Aaron Rodgers, Trevor Lawrence, Odell Beckham Jr., and Shohei Ohtani. This strategy is not without risk as the volatility of crypto markets can lead to big losses or gains.
Cryptocurrencies are not the only Web3 technology to drive revenue for sports leagues. Non-fungible tokens (NFTs) have become a massive partner in major professional sports. Just as there have become many players in the crypto space, the NFT market has seen a flood of projects and professional sports have gotten involved in a big way.
The Allure of NFTs to Professional Sports Leagues and Their Fans
NFTs became a huge industry in 2021. According to Fortune, total sales in the market were $17.6 billion in 2021, representing an over 21,000% growth from the previous year. Sports leagues took notice and have entered into the space to take advantage of the collectible nature of NFT projects.
The NBA led the way, partnering with Dapper Labs, to launch NBA Top Shot in 2020. Popularity in the limited-edition NBA video highlights soared. The NFL and UFC have since made deals with Dapper to get a piece of the pie. MLB and NHL have partnered with other companies to produce their own NFTs.
The collectible nature of sports NFTs makes them popular in the same way sports trading cards have been for fans. It is not just leagues and teams taking advantage of the widespread growth. Individual athletes are joining in by not only buying and selling NFTs but also partnering to create their own. This allows the athlete to own, control and monetize their specific content.
Several athletes across multiple leagues just announced a partnership with Momento NFT to create NFTs based on their own experiences. Michael Jordan launched an NFT platform for athletes in December called HEIR. Some of the highest-profile athletes in the world are partnered with the NFT platform Autograph. Tom Brady, Tiger Woods, and Wayne Gretzky are among the athlete partners.
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