Photo via: Bleeding Green Nation
The NFL is dipping its toes into the new age of digital assets
Congrats to the Los Angeles Rams on winning Super Bowl LVI. The Rams and owner Stan Kroenke went all in on this season by trading for Mathew Stafford and their gamble paid-off. The intersection of law and sports collide every year when advertisers and the like must refrain from using the words “Super Bowl.” The NFL trademarked the phrase “Super Bowl” in 1969. Instead, any business who does not have express permission from the NFL must refer to the Super Bowl using a discrete term such as the “Big Game.”
Nonetheless, the Super Bowl is finished, and attendees paid thousands (or millions) to attend America’s largest annual event. However, aside from a picture, what proof or memento do attendees have to commemorate their experience? In seasons prior, attendees only had their physical Super Bowl ticket — some had it framed, others gave it away, and some even sold it to a vintage sports collector. The point is, although cool, there was nothing truly exceptional — to most — about having a Super Bowl ticket.
However, as many know and have seen, NFTs (non-fungible token) are taking the world by storm. In short, an NFT is a digital asset on a “blockchain” with unique coding and online data that singularizes each singular NFT. This is different from cryptocurrencies (like Bitcoin) because they cannot be traded or exchanged at equivalency. Cryptocurrencies are identical to each other and can be used to purchase things (similar to the USD currency we know and love).
A blockchain is essentially an online data library with stored information and it securely maintains and decentralizes records of transactions. The practicality of blockchain is it permits data security for recording ownership of an NFT or cryptocurrency without the need for a trusted third party.
One can see a real-life example for how this is/could have been beneficial with the Logan Paul, Pokémon debacle. Paul is heavily invested in the Pokémon trading card collector space, and he recently purchased and subsequently lost $3.5 million on alleged rare Pokémon cards. Paul was duped into purchasing an unopened box because the potential value of the box was immense. Paul likely would have made many millions more if the box contained rare Pokémon cards. Nonetheless, Paul opened the box, and he was scammed. This is where NFTs and the all-important blockchain come in handy. If the Pokémon cards were a digital asset (NFT), the blockchain would contain the pertinent information to properly inform Paul if the Pokémon cards were in fact authentic.
The technology and utility are amazing. However, if you are like me, you are still skeptical. If something such as a Pokémon card is a digital asset, how does that benefit me in the real world? Well, many companies are now pairing real life assets with an accompanying NFT for consumers. If a consumer purchases a pair of sneakers to have in real life, a company can pair the sneaker with an NFT of the sneaker for the consumer to collect or even “wear” as a digital avatar in the online space. (Is there a limit to who can do this? We will be diving into this next week when we discuss Nike suing an online sneaker marketplace).
Nonetheless, this exact product model is what the NFL is doing for SUPER BOWL LVI. The NFL is giving all attendees a free commemorative virtual ticket (NFT). Each virtual ticket will be individualized for each attendee, featuring the attendee’s section, row, seat, and one-off custom Super Bowl LVI ticket design. Bobby Gallo, NFL Senior Vice President and Club Business Development, released a statement saying,
“We first began offering virtual commemorative ticket NFTs to fans during the regular season. We witnessed great success with this one-of-a-kind fan experience, which provided the momentum to continue this program throughout the postseason and ultimately at Super Bowl LVI in Los Angeles. Collecting ticket stubs has always been something our fans love to do, especially for the season’s biggest game, and offering customized Super Bowl NFTs allows us to enhance the gameday experience, while also enabling us to further evaluate the NFT space for future ticketing and event engagement opportunities.”
The virtual tickets are a great way for the NFL to gauge the digital asset landscape and develop a digital presence. Aside from generating virtual tickets, the NFL created a limited series of seven “historic commemorative NFTs” that fans could purchase. An NFT was released everyday (starting February 6, 2022) for fans anywhere to purchase. Overall, the NFL gave over 250,000 virtual tickets to attendees this season — piloting their new NFT program at select games.. In addition, the NFL released very limited purchasable NFTs, including the Super Bowl week commemorative digital assets.
The NFL has NFTs available for purchase on its website, nfl.live-nfts.com. Interestingly, the website is run by Ticketmaster. Ticketmaster parlayed its in-person success into the digital marketspace to become a hub for NFT and cryptocurrency transactions. Although not the subject of this post, be on the lookout for major companies that society is comfortable with transitioning into the digital space. As we move forward, the legal landscape itself will need to shift as more disputes arise concerning intellectual property and the digital asset world.
As an aside, while we are discussing NFTs and furthermore cryptocurrency, all athletes being paid in a form such as Bitcoin are not being underpaid. Prominent athletes such as Odell Beckham Jr. declaring that he will receive his checks in Bitcoin slightly misrepresent what is really going on with their contracts (not to the players’ fault, the media misreports). Not including the playoffs — in the playoffs, pay increases during each round and ultimately the Super Bowl winners receive the most pay — players receive a weekly salary divided up into the 17 weeks of the NFL regular season schedule. If a player is cut, they are no longer paid and lose out on any non-guaranteed money and if a player is added during the season, their pay is pro-rated to align with the weeks left in the season and divided equally thereafter. Bonuses are outside of this standard pay division.
Players such as Beckham, Jr. and regular season MVP Aaron Rodgers equally receive their pay as any other player and thereafter choose to convert their pay to Bitcoin and are doing so through a collaboration with Cash App. Media personalities incorrectly reported that Beckham, Jr. was losing out on a significant amount of money because he converted his salary to Bitcoin and Bitcoin’s stock price has fluctuated since. That is incorrect because of a few things:
(i) Beckham, Jr. did not receive all his salary in a large sum and thereafter convert it into Bitcoin;
(ii) Beckham, Jr. receives an equal amount of pay each week and can buy Bitcoin at whatever price it is at that time and his loss (or gain) cannot be calculated using a set date of Bitcoin’s price then versus today (aside from that fact that all of us have no idea what Beckham, Jr.’s investment portfolio looks like); and
(iii) Beckham, Jr. is in a collaboration with Cash App to receive part of his salary in Bitcoin — this does not take into the account that Beckham, Jr. is likely being paid as an influencer for doing this by Cash App and is likely being compensated handsomely for doing this.
Nonetheless, the NFL and its athletes are working their way into this new era of digital assets and will likely continue into the digital world through virtual reality experiences. It will be interesting to watch a multi-billion dollar corporation make advancements for both attendees and at home viewers to have the ultimate game experiences – and navigate the inevitable legal challenges which will arise