Has sport maximised the effectiveness of web3?

In this article Virtua’s Commercial Director, Rory Stewart-Richardson, looks into some of the partnerships between sports and Web3 brands and asks if they have maximised their effectiveness.

Clubs maximise revenue from new categories but do they always maximise the partnership / product to give a return to the Brand. In recent times, we have seen a huge amount of investment from Web3 companies into the world of sport, for once clubs were in a very strong position to inflate their property prices due to the number of Web3 companies that were looking to maximise the visibility large sports organisations could provide to gain market share, but most of these seemingly were purely transactional and not activated, and if they were activated they alienated the potential buyer (the fan) by failing on the activation. 

There have been a large number of failed activations from Liverpool’s NFT flop through to failed due diligence in such a new space with the likes of FTX, who sent shudders through not only the Crypto / Web3 world, but also through the world of sports sponsorship. 

Was it right for clubs to partner with Web3 brands?

New categories are always a gamble particularly, when the category is so far from mass adoption, but it also can be a great opportunity – well funded organisations provide great revenues, but in my eyes, it also showed up that Rights Holders are a long way away from being able to tell the brand story, educating and engaging their fan base, and instead purely chasing the revenue streams. So far the press have picked up the disaster case studies, and have ignore the positive case studies which are starting to come through in the market. 

Mclaren X Tezos – They’ve launched what is, to date, the most successful free sports NFT project! Over 2 million downloads 🏆🏁, building a community based on utility and engagement

CR7 x Binance – The first sell out drop drove $1.8 million Revenue, delivered 7 billion media impressions, selling 8,634 NFT, with further secondary market sales of $1,009,603 – a mutually beneficial partnership allowing the fans to get closer to Ronaldo, with virtual meet and greet opportunities with Ronaldo, signed merchandise, plus much more allowed a strong utility strategy to ensure future sell out drops.

So in short, done right, the power of web 3 is the next innovation when it comes to fan engagement, creating engaged communities to benefit from the benefits of Web 3 technology. Do I think Rights Holders have maximised the capabilities to date – no, but I do think with continued education, less focus on the big upfront sponsorship fees, the power of web 3 technology will prove a fantastic engagement tool and revenue generator over time.