Author: veDAO Research Institute
The English Football Association is the main governing body for amateur and professional football in England, and the FA Cup is the oldest football competition in the world. Recently, an announcement on the official website of the English football organization FA indicated that the English Football Association has issued a request for proposals to find a long-term NFT platform partner, and the association plans to establish a new long-term NFT platform.
The combination of sports and Web3 has become more and more mature in the past few years, and the preheating and cultivation of the market and consumers are constantly deepening. A recent survey shows that sports fans are now ready to invest in NFTs with real value. This article will analyze the business model of the combination of sports and Web3, analyze the reasons and scenarios for the successful combination of the two, how they interact and influence each other, and share possible potential business scenarios in the future.
1. Current Web3 sports integration scenarios
Now the sports industry is inseparable from the Internet. The Web2 network has changed the way fans consume sports, and the impact of Web3 will continue to be so in the future. In recent years, major sports officials have readily accepted Web3 technology, started to introduce the most cutting-edge technology, and created the most innovative gameplay. The current excellent Web3 sports-related project categories are:
1. Traditional Sports NFT
As early as July 2020, the NBA (National Basketball Association) cooperated with Dapper Labs to launch a series of officially licensed NFTs. These NFTs are mainly used to highlight the individual aura of athletes and commemorate key games and other important moments.
NBA has pushed the development of star card NFT to a peak through the NBA Top Shot platform, where users actively purchase and trade NFT star cards or NFTs with signature moves of star players as the core content. According to data, within 8 months after the launch of the platform, the number of users reached one million and the transaction volume exceeded US$700 million. As of May 22, NBA Top Shot sales have exceeded US$1 billion.
In addition to NBA basketball, in August 2022, the NFL (National Football League) partnered with Dapper Labs to launch NFL All Day. Dapper Labs also has similar partnerships with UFC (Ultimate Fighting Championship), LaLiga and the English Premier League. All major official sports associations or clubs have participated in the NFT market in different forms, either co-issuing NFTs or building NFT trading platforms to connect with fans.
2. Web3 Sports Games
The football game platform Sorare became an instant hit after its launch in 2019. With NFT representing football stars, players can purchase officially certified NFT virtual football star cards on the Sorare game platform, play the role of team manager, and form their own customized golden team. Players can also participate in various football matches on the platform. If they win, they can get new cards and ETH rewards. This Web3 football game promotes communication between players and fans in a new way.
According to public information, Sorare has completed a total of three rounds of financing, including a US$4 million seed round in 2020, a US$50 million Series A round in 2021, and a US$680 million Series B round led by SoftBank in 2021 (valued at US$4.3 billion). The Series B round of financing broke the record for the largest financing amount for a French technology company.
As of July 23, the Sorare gaming platform has accumulated a total of 3.7 million gamers, and the game content has expanded to NBA, MLB, etc. At present, Sorare has cooperated with more than a hundred clubs, and Sorare continues to cooperate with superstars. For example, French football player Mbappe has been the spokesperson for Sorare, vigorously promoting its platform and attracting a large number of traditional Web2 fans to join Sorare and start their own Web3 journey.
3. XR live events
With the rapid development of XR technology and the impact of the epidemic in recent years, the market demand for XR live broadcasts of sports events continues to increase. The combination with Web3 also allows users to experience an immersive experience just like watching the game in a stadium, and obtain real commemorative ticket NFTs, and even special series NFTs.
For example, last year, the Italian Serie A League broadcast the match between AC Milan and Fiorentina on the Metaverse platform Nemesis, which became the world's first Metaverse live sports match. There are also UEFA, which held an e-sports competition for young people on Roblox, expressing the hope to communicate with young people in an intuitive way in the form of Metaverse competition. Currently, the world is promoting the XR borderless event experience, and the application of this technology includes Metaverse live broadcast, which provides viewers with a more convenient and immersive viewing experience through technology.
4. Commercial endorsement
In 2021, Crypto.com, a cryptocurrency platform famous for its crypto credit card, spent $700 million to purchase the 20-year naming rights of the Staples Center, the iconic stadium of the Los Angeles Lakers and Clippers, and renamed it Crypto.com Arena.
The bankrupt FTX also made great efforts to develop its sports strategy. In March 2021, it signed a 19-year naming rights agreement worth $135 million. The home stadium of the Miami Heat was renamed "FTX Stadium."
In the advertisement of Adidas, a well-known sports goods manufacturer during the Qatar World Cup, a bored ape NFT character appeared with football stars Messi and Karim Benzema. As mentioned above, Mbappe endorsed Sorare. There are already many star players cooperating with Web3 platforms, which not only expands the influence of Web3 and platforms, but also promotes the transformation of the sports industry from Web2 to Web3, and creates many new ways to interact with fans.
2. Advantages of combining Web3 with sports
In terms of fan engagement and tokenization, Web3 will enable fans to interact with their favorite sports teams and athletes in new and exciting ways. Blockchain-based fan tokens and digital collectibles can be used to incentivize fan engagement and loyalty. Fans can use these tokens to participate in polls, competitions, and even influence team decisions. This will provide new revenue streams for sports organizations and provide fans with a more personalized experience.
When it comes to ticketing and merchandising, Web3 technology can make ticketing and merchandising more secure and efficient. A blockchain-based ticketing system can prevent fraud and ticket scalping while also allowing for the resale of tickets in a transparent and decentralized manner. Similarly, a blockchain-based sales system can ensure product authenticity and enable seamless transactions between buyers and sellers.
In terms of athletes, there are now more and more superstar athletes being defined and shaped, both in terms of the athletes’ own superb professional abilities and the marketing potential of knowledge systems infused with digital and artificial intelligence. Web3 will enable athletes to better control their careers and tokenize their personal brands, which is another unique value realization.
In terms of multi-party cooperation in the sports market, smart contracts can be used to facilitate contracts between athletes and teams, as well as sponsorships and endorsements. Sports smart contracts are self-executing digital contracts that enable two or more parties to exchange assets or information in a transparent and secure manner without the need for intermediaries. These contracts are also built using blockchain technology, which can create tamper-proof and immutable transaction records. In this way, complex multi-dimensional business cooperation can be made faster and more transparent, forming a clear business network with high security and increased benefits for all parties.
In terms of information data, Web3 can provide a more transparent and decentralized system to collect and analyze sports data. Blockchain-based data storage and analysis can prevent data tampering and provide athletes with fairer compensation based on their performance. This can enable new forms of sports betting and prediction markets that are more fair and just, and both speculators and fans will be more willing to pay.
It is even conceivable that DAO governance could be used in the sports industry to enable fans and stakeholders to participate in decision-making and profit sharing, using Web3 technology to achieve a fairer distribution of power and wealth in the sports industry and a more democratic and decentralized governance system.
3. Possible business models in the future
Many officials mentioned in interviews about cooperation with Web3 platforms that such cooperation in the transition to Web3 helps generate new long-term revenue and reinvest it in the game to benefit the game. We hope to create new ways of interaction for fans by using the latest blockchain technology to attract more new viewers and fans. There will inevitably be more business cooperation models in the future, but they will ultimately revolve around the two key elements of fans and games. Here are a few future possibilities:
1. Address VIP
You can participate in all sports events based on the address, including NFT tickets, NFT celebrity collections, Web3 sports games, Web3 sports forums, etc. When a project appears that can connect almost all Web3 sports-related project data, the address data of the user address can be formed. Then, based on the various dimensional data of the address, such as the number of tickets owned, the number and value of NFT collections, the number, level, and wins of games participated in, the activity and level in the forum, etc., VIP level scoring is performed. Users with higher VIP levels correspond to the loyalty and love of fans, and can even be divided into different tracks and different clubs.
2、Watch to Earn
Combined with the increasingly mature live broadcasting technology of events, users can get rewards by watching the games online. This can also be combined with NFT event tickets and decentralized prediction results guessing to provide users with convenient integrated services. Watching the game is more convenient, and you can also earn money by watching the game, and you can use the money earned to guess. I believe it will be very popular and have a large market.
3. DAO Governance
In the future, it is entirely possible that teams owned by Web3 DAO organizations will appear one after another, which is equivalent to DAO organizations becoming shareholders of the team, and fans may become members of DAO. A team can be operated in a more transparent and democratic way, and contracts can be signed with players through smart contracts. The income of all members will be distributed according to the contract. Fans will be more attentive and loyal to the team. By governing the team in a democratic and autonomous way, they can create value for the things they love and get dividends. I believe that many fans will be very excited.
IV. Conclusion
The impact of Web 3.0 on the sports industry is wide-ranging and far-reaching, and the combination of the two is a trend of technological advancement. The ability to connect with fans and followers in real time and gain insights into customer behavior has already changed the way businesses within the sports industry operate, and as we move into the future, it is clear that the role of technology will only continue to grow in the sports business.
