The hype train came and left on NFTs, but the real value is starting to get on track

Non-Fungible Tokens (NFTs) came out hot in the post-COVID haze, personified in the launch of Dapper Lab’s NBA Top Shot collectibles, which boomed quickly before deflating in classic tulip-craze fashion. Collectible markets are still around, but NFTs and the supporting blockchain infrastructure are on the cusp of bringing less glamorous but more substantial business value.

Ticketing

It seems inevitable that using the blockchain to buy and sell tickets will eventually become an industry standard. The technology could address two of the biggest problems that teams face with traditional ticketing: counterfeits and the huge surplus that goes to resellers. FIFA recently issued a warning to fans about buying tickets for the 2026 World Cup from "unofficial ticket sites” in an attempt to ward off the debacle of the 2022 UEFA Champions League riots in Paris. Blockchain-based ticketing can eliminate much of the fraud. Blockchain-based ticketing could not only avoid problems with fans, but it could also recapture some part of the value they are currently giving away. The billion-dollar revenues of secondary providers like StubHub and Vivid Seats speak to the huge value that teams are effectively surrendering to third parties. The ability to build smart contracts into NFTs would allow teams to automatically attach certain conditions to any ticket sale. For example, a team could build a digital ticket that:

• Could only be used by the original buyer

• Could only be resold once for a price no more than 20% over the original face value.

• Could be resold unlimited times at any price, but 15% of any secondary transaction goes back to the team

The technology exists to implement smart tickets today, though widespread social acceptance is likely a few years off. But teams could start putting the structure in place and experiment with small audiences to get a head start now on what seems like an inevitable future.

Loyalty Programs

Another compelling application is enabling fan loyalty programs that can build new connections and revenues for teams across their fan base. Some of this potential is previewed in the Cleveland Cavaliers' Cavs Rewards program. Cavs Rewards lets fans earn Cavs Points for purchases at Rocket Arena, the Cavaliers Team Shop, and participating partner brands like Macy’s. Many of these redemptions occur automatically just by using a credit or debit card that a user has registered with the program. These points add up to earn “digital badges” that unlock new perks at each level. Under the hood, these purchase records and badges are stored in blockchain wallets. In the traditional world, this would require partners or card issuers to share transaction data directly with the Cavs, which gets more complicated and less secure with each new participant. The blockchain allows the data to be provided more simply and securely.  

But this is only a starting point. Proof of Attendance tokens (using POAP) can be used to verify more than financial transactions. These could reward fans for watching a game stream, sharing a team's media post, or attending a victory parade. These activities could be verified and credited without requiring teams to technically integrate with anyone but the fans via an app or QR code. This creates a bevy of new opportunities for teams and sponsors. 

These digital innovations represent powerful new tools to build and leverage the fan base in order to increase franchise values. Smart sports brands will move to at least be prepared for this coming world by crafting strategic plans for how to incorporate these tools into their current programs.