“How to Make $4 Million Overnight”: The Complicated World of All Blacks and Digital Art [Advance Cash ]

Just two years ago, sports teams, leagues and international superstars were told that they could get rich quick if they were the first to adopt non-fungible tokens.

There were predictions that the sport
was going to be at the forefront of a digital revolution that would be akin to a modern gold rush, as the revenue opportunities associated with NFTs were, supposedly, almost unimaginable.

For the uninitiated, NFTs are non-interchangeable digital assets that are stored on a blockchain, giving them unique proof of ownership that can be verified and authenticated to the platform they are hosted on.

The excitement around the sport was that it would be able to produce collectable digital art – video and audio clips, and images of iconic moments, players and events – that could be traded between fans.

And for a while, the market exploded. The NBA was one of the first major bodies to adopt NFTs, and its Top Shot collection – licensed music videos of great moments – has grossed US$700 million less than a year after its launch. launch end of 2020.

New Zealand cricket was another early casher when last year it sold its NFT rights for $25 million to Dream Sports, while the success of Wimbledon’s Centenary Edition and the NFL’s Arena Club led the major accounting firm Deloitte to predict that NFTs would pay off in the United States. sports market of approximately $2 billion in revenue by 2022.

But despite all the optimistic growth projections that were being made at the end of 2021, values ​​crashed in the second half of 2022.

Some individual items were selling for $200,000 in 2021, but a year later most NBA Top Shots were estimated to be trading at around 10% of what they were originally bought for and in February 2021 sales have peaked at $224 million. but in February of this year, they were sitting at $2.8 million.

Confidence in the digital asset industry was further shaken by the collapse of cryptocurrency exchange, FTX and Silicon Valley Bank, which funded many people involved in new technologies, and with a value of NFT down 97% from a year ago, predictions about the value of collectible digital art to the sports industry appear to have been grossly overstated.

Certainly, the pendulum has swung over the past 18 months to suggest that a growing number of fans and investment experts believe that NFTs are a sham disguised as an opportunity.

New Zealand Rugby also appeared to be an early skeptic as NFTs were a notable omission when it identified potential new trade flows in 2021 which it would seek to develop in partnership with US fund manager Silver Lake. .

The national body listed executive coaching ($33.5 million), All Blacks clinics ($14.1 million), esports ($6.3 million), virtual signage ($10.8 million), merchandise ($3.4 million), e-commerce/social selling ($26.9 million), and an OTT streaming platform ($20.4 million) as the seven ways it could generate $115 million in revenue over the next five years.

The fact that NZR stayed away – other than a $30,000 investment it made to buy 33 NFTs from an online community called World of Women during last year’s World Cup for supporting the Black Ferns – suggests he doesn’t believe they will prove to be a viable, long-term source of income.

But it would be more accurate to say that NZR is specifically a collectible digital art skeptic.

The broader concept of NFT has significant appeal for the national body and its investment partner Silver Lake.

Both parties can see the value of blockchain technology and the opportunity presented by proof of ownership and perpetual royalties, and while collectible art may turn out to be a scam in the long run, NFTs are bound to loyalty programs, a unique experience and unprecedented access to athletes. could become the most valuable source of income for NZR’s future trading portfolio.

OIn any potential new business areas that end up being explored in partnership with Silver Lake, it is possible that NFTs will become the sole source of revenue justifying NZR’s decision to sell a stake in the US company.

Richard Thomas, who is the interim chief executive of New Zealand Rugby Commercial, the entity set up to manage NZR’s commercial growth, agrees that NFTs will become an important part of the national body’s financial future, but he does not will not know how well they have developed a sustainable business plan.

“NFTs have a role to play in our future, but we’re not fully developed on this yet,” says Thomas.

“We’ve been looking at it for a while. We primarily want to approach NFT from a fan’s perspective, so we think there’s a risk that some of the things happening in that overarching area have been a money grab and may have put fans far in the dark. the list of priorities. .

“We are keen that whatever we do, we try to put the fans at the centre. We don’t want to be a flash in the pan. We want to do it right and we don’t want to create a situation where our fans are the victims of a negative experience. We must be properly prepared.

What has also deterred NZR from jumping on the NFT collectible content bandwagon are the complications of intellectual property ownership.

The NBA is the undisputed sole owner of its broadcast archival footage and is therefore able to monetize sales of historical moments relatively easily.

The situation in New Zealand is more complex when it comes to archival rugby footage, as it is unclear who owns it.

Without clarity, it has proven too difficult to agree on the split of revenue between NZR, Sky TV and athletes, and so while there is a rebound in collectible digital art values, this is not an avenue that NZR is likely to pursue.

“The first question is why are you doing it and what does the fan get,” says Thomas.

“The second issue is intellectual property. If we’re being honest, it continues to be a challenge to overcome. We are trying to figure out who owns what? How do we protect our intellectual property and given that there can be multiple owners of intellectual property in any situation, how do the advertisements of this work.

“You might see situations where people are trying to create new ideas that don’t have some of the IP ties of the past.”

When NZR embarks on an NFT strategy, it will likely aim to build fan engagement and reward brand loyalty, with initiatives sold at a variety of price points to suit all budgets.

Sam Jenkins, head of sports at Glorious – the New Zealand-based NFT studio and marketplace which was co-founded by Daniel Carter and won an order to produce the digital collectible series for Wimbledon – said: “I could go to NZR tomorrow and say, “I could make you $4 million with this new product called the Starting XV.”

“This is a premier All Blacks NFT Lifetime Membership. It gives you the best seats in the house for every All Blacks Test in perpetuity, you get access to training sessions, select players , if you want your local school to get a signed shirt, someone at NZR will take care of that.

“You could sell a 15 for $250,000 each to high net worth individuals who are big All Blacks fans or businesses.”

Jenkins says these types of exclusive packages could fit any budget, with, for example, 10,000 to 100,000 memberships available at $100 each, which grant the owner discounts on merchandise, better access to test tickets, exclusive player video content and automatic entry into prize draws.

Jenkins says other ideas likely to be developed will be the creation of metaverse properties and proof-of-presence protocols.

“If you look at our lives over the past 20 years, we naturally transitioned to a digital life.

“Work has gone from factories to laptops and zooms and friends have gone from your neighbors to your followers and the kids are playing Fortnite instead of actual sports and it’s almost like it’s just been happening for over 20 years.

“I feel like the metaverse is where your online identity is more important than your real identity. The black jersey is one of the most iconic in the sport, owning an NFT of that black jersey might be more important than owning it in real life Every year NZR could release 100 NFT jerseys and you can keep it, wear it in the metaverse, trade it in or maybe burn it and Adidas send you the limited edition jersey.

“If I’m an All Blacks fan and I go to the World Cup final imagine you take a picture and a few hours later you get a proof of attendance protocol with your picture saying I was here and you had it as your digital memory.”

It’s easy to see why there are and will continue to be NFT skeptics, given the burgeoning nature of the first wave of collectibles.

There is also a generational divide and the virtual world is a happy and natural place for young digital natives and anathema to those who did not grow up with a smartphone.

But for early adopters like Jenkins, there is no doubt that NFTs have the ability to generate a viable and possibly huge revenue stream NZR.

“The All Blacks brand is powerful and they will be recalled within the hour by top platforms in the US and Europe because everyone knows who the All Blacks are,” says Jenkins.

“NZR doesn’t need to reinvent the technology it just needs to partner with the best platforms and tech teams and commercially figure out how they make the pie bigger and everyone wins.

“There will be a tipping point where it becomes mainstream and I think a bit of what’s out there now is probably a fad, but in the long to medium term I’m confident that Web3 will really be the next Internet.

“By the end of the decade, they should be making more Web3 revenue than they are doing in sponsorship and streaming. I just hope they don’t blow it up, because they could get the game ready for the 30 to the next 50 years if they succeed.