Non-fungible token (NFT) platforms Sorare, Dapper Labs, Candy and ConsenSys reached the final phase of bids to license the Premier League’s digital assets. Bids for collectible football rights are between £220 million ($300 million) and £434 million ($590 million) over the next four years, the Daily Mail reported.
Most of the world’s top sports leagues have launched their own NFT-based initiatives. Brave has deals with the NBA, the NFL and UFC, Candy has a licensing deal with the MLB and some NASCAR teams, and Sorare has managed to secure a deal with almost every top football team in Europe, as well as LaLiga and Bundesliga.
Bidders have deep pockets
All the finalists have deep pockets. Last year alone, Sorare raised $680 million, Dapper Labs raised $555 million in multiple rounds, Candy raised $100 million, and ConsenSys raised $265 million in two tranches. Softbank led the rounds for Sorare and Candy Digital.
The Premier League has taken a more conservative approach with NFTs. The League has apparently been investigating teams about crypto-based sponsorships. Fan groups have said digital assets are risky investments and it would be irresponsible for teams to get involved without properly educating fans about the potential financial ramifications. Some consider collectible NFTs to be less risky than cryptocurrencies and fantokens. But given the rampant speculation, that could be moot.
And with these sums of money on the table, the sector is hard to ignore. The Premier League, like almost every sports league in the world, lost significant ticket revenue during Covid and last year the organization was threatened when the top clubs announced the creation of a Super League with other leading teams in Europe. The idea was quickly brushed aside, but it still exposed the League’s fragility.
As other leagues join the NFT trend, the Premier League could be at a disadvantage if it didn’t get involved in its own line of digital collectibles as well.
The Premier League’s High Price Tag
Compared to other NFT-based sports deals, the League has managed to negotiate for a much greater value than expected. Dapper’s deal with the NBA and NFL is estimated at about $20 million a year according to the Daily Mail (we’re not convinced by the NFL figure). And while the details of Sorare’s deal with LaLiga have not been disclosed, it is unlikely to reach £100m ($136m) a year. The Premier League’s global branding and fame probably gave them more leeway in valuing the value of the deals.
The two biggest sports NFT platforms to date are Dapper Labs’ NBA Top Shot with total trades close to $920 million, followed by Sorare at $230 million, according to CryptoSlam.
Sorare already has a deal with almost every team in the League, which is why it’s unclear how the licensing exclusivity will work. It also hasn’t specified what kind of NFTs would be launched with Sorare, as it already commercializes player cards for use in fantasy football games. For Sorare, collectible NFT moments or video clips would make more sense given the existing deals. But Dapper Labs has much more experience with Moments.
Since most Premier League clubs already have NFT deals, their share of the Premier League deal gives them two bites financially.
Given Sorare’s experience in football and relationship with the teams, it appears that he is in a leading position. However, the company is under scrutiny by the UK Gambling Commission for launching a fantasy football game “without proper gambling licenses”. Some have commented that the Gambling Commission was cornered over the failure of another fantasy football startup.
There is no doubt that NFTs involve speculative risks for buyers. But it’s hard to see why the risks with Sorare would be greater than with the other bidders. And the potential deal with the Premier League is unlikely to include pretend play, as the league already has one.
One more note about the bidders. ConsenSys co-founded the NFT platform Palm, which provides the technology that Candy Digital uses in its NFT offering.
Meanwhile, Sorare has a deal with the French, German and Belgian national teams.