NFTs are here. For how long, with what future impact, and who will benefit most may still be up for debate, but the fact that there is a market for them and there is money to be made is not.
As leagues, teams and athletes have jumped (or stuck a toe) into marketing NFTs to fans, their brand partners have thus far been left on the sidelines. This isn’t surprising, for although we certainly will see some brands involved in future offerings, there isn’t a natural or endemic role for sponsors with sports-related tokens, whether you consider them collectibles, securities or something in between.
If fans roll their eyes at a sponsor logo on their free bobblehead or cap, we can rest assured they would be far less pleased if a corporate partner “brandalized” the coveted token they just acquired.
I visited a recent Clubhouse room that devoted an hour to NFTs and sponsorship, and although it didn’t yield any ideas or examples of how to directly associate brands with tokens in a way that would be authentic and relevant to sponsors, issuers and buyers, the discussion did spark an idea.
It’s easily argued that sports-related NFTs generate the most revenue for those who need it least: top leagues, teams and their star athletes. Conversely, those who could benefit the most from new sources of funds—charities, NGOs and other organizations doing social good—are left out of the equation.
Nonprofit organizations that might be tempted to get into the NFT game face a mountain of challenges, not the least of which is lack of human and other resources to operationalize NFT production, rights management and sales, even if those specific functions could be outsourced. Add to that a likely predominant number of donors and other stakeholders unfamiliar with NFTs and unequipped to actually buy them.
That situation creates an opportunity for sports organizations, causes and brand partners to come together and put a new spin on “sports as a platform for good.”
With sponsors as the catalyst, the power of sports could be leveraged to ensure causes reap some of the rewards from the NFT boom.
- Sports-related NFT offerings could be structured as traditional cause-related marketing programs, with a percentage of proceeds going to a nonprofit beneficiary—with the added advantage of additional revenue to the cause from future resales.
- Currently, athletes and sports properties market NFTs separately from each other, which either limits or completely restricts the ability to use the other’s IP. The opportunity to support charity might persuade them to work together on a joint NFT offering that could be valued significantly higher than their individual products.
- Sports organizations could lend their expertise and skilled personnel to help lower the barriers to participation for nonprofit partners interested in issuing their own tokens.
- Brand partners could put their paid and owned media, as well as other promotional platforms, to work promoting collaborations between sports and nonprofit partners.
The sports-brand-cause connection has been tremendously effective at raising awareness, participation and donations for worthy causes for decades. But the model has grown a bit stale: sponsorship agreements offer brand tie-ins with a team’s community and charitable efforts; brands leverage athletes’ celebrity to draw attention to their CSR programs; sports stars recruit brands as sponsors for their foundation fundraisers, etc.
There’s nothing wrong with any of that. But seizing the NFT moment could be a great way to breathe new life into partnerships and make them more meaningful, attract new audiences and consumers, and increase visibility and funding for deserving causes.