Bundesliga International is seeking to strike short-term non-fungible token (NFT) licensing deals as it gets to grip with the ‘bewildering’ pace of development in the digital collectibles market, according to chief executive Robert Klein.
Speaking during SportBusiness’ NFT webinar on November 24 (Wednesday), Klein described how the commercial arm of the German Football League had undergone ‘an intense and enjoyable learning voyage’ in the NFT space over the past 18 months, before agreeing two NFT deals with Sorare and Topps.
Under the two-year licensing agreement with Sorare, announced in October, the league will sell digital Bundesliga and 2. Bundesliga player cards on the fantasy game platform. The league also upgraded a pre-existing, physical-collectibles deal with the trading card provider Topps to include digital trading cards.
Klein said of the Sorare deal: “We decided on a two-year [deal] primarily because we want to still learn because there are many questions we still have. What is the real value in the marketplace? The question [posed] to me immediately from the [Bundesliga] clubs was: ‘nice one, looks good, but have we undersold?’”
Klein said Bundesliga International is in the process of delineating packages for an NFT tender early next year and emphasised that the league is still exploring the best commercial model for when the short-term Topps and Sorare deals expire.
“There’s a school of thought that says you can have NFTs just as one block and you could give a company exclusivity of that and they would run the whole lot – they’ll run you all the products, they’ll run you the marketplace as one thing. But that would have to be a massive cheque.
“I think the more likely scenario is what we’re doing at the moment, and what LaLiga is doing as well, where you’re going to have product categories and within those there will be an NFT offering.”
LaLiga head of commercial Diego Sanchez Trillo described how the Spanish league had carved out three NFT categories along similar lines to the DFL, after having a ‘huge amount of conversations’ with the many NFT companies operating in the space.
Like Bundesliga International, the Spanish League has also struck a digital fantasy cards NFT deal with Sorare, alongside a video highlights NFT deal with Dapper Labs. A further fan token deal with Socios.com rounds out the league’s three categories, although Sanchez Trillo was quick to point out this could not strictly be categorised as an NFT deal.
He said: “At the beginning it was challenging because most companies wanted category exclusivity but […] there were many possibilities of developing many types of NFTs. As a sports property and with the rights that we’re owning, we believe that those three verticals would make sense and actually, as we were discussing with our three partners, they realised they could actually live together.”
Complications
In the past week, leading rights-holders have suffered complications with NFT deals.
First Barcelona cancelled an agreement with NFT marketplace Ownix after a consultant working for the firm was arrested over allegations of cryptocurrency fraud, before Manchester City was forced to suspend an agreement with crypto start-up 3Key after observers on social media claimed the company had no digital footprint.
Tim Mangnall, chief executive of Capital Block, the specialist NFT advisory division of the Capital Sports Media marketing agency, said the sheer quantity of NFT operators looking to work with sports rights-holders made it difficult to identify the best companies to work with.
“The really established players will, say, put $500,000 (€450,000) on the table for some rights, if it is a minimum guarantee. But then the players that you’ve never heard of are putting $3m, $5m on the table.
“Why are they putting so much money down? There’s a whole other due diligence process to be done there.”
Tom Mizzone, founder and chief executive of NFT platform Sweet, said the best sports NFTs were accessible, offering gamification elements that encourage fans to engage and build communities around them for the long-term.
He observed: “How do you break down those barriers? Because the worst thing a team or league can do is leave out their fans. First and foremost, you want to be very much all-encompassing in who the consumers are and how they can get into the experience.”
To watch the replay of Wednesday’s SportBusiness webinar – Understanding NFTs and the value proposition for sport – click here.