Just ahead of the recent annual owner meetings in sunny South Florida, a surprise memo emerged from the NFL.
In an about-face from last summer’s ruling, the NFL is now permitting blockchain sponsorships in a limited fashion.
The memo excludes direct promotion of cryptocurrency and prohibits teams from including any blockchain–related signage at facilities, but the league is clearly dipping its toe in the crypto waters.
Could the next step be an NFL NFT? If the tides continue to shift as they have been, don’t bet against it.
And just look at how the NFL has done an about-face on sports gambling. While Georgia sports betting failed to get legalized this year, the fact the NFL is now all aboard the gambling train shows why NFTs could be next.
Blockchain takes professional sports by storm
NFTs (Non–fungible tokens, for the uninitiated or hopelessly confused), have been soaring in popularity — especially in corporate and media arenas. In short, NFTs are essentially digital art purchased through cryptocurrency exchanges.
Like Coinbase, they give the buyer exclusive rights to the online image. It’s kind of like purchasing a Picasso at the art auction. The main exception is the Picasso is an ape in 3D glasses, a mariner’s cap, and smoking a cigarette.
Others can simply download the image file, too. The owner just officially retains the overall copyright for the art, to display or sell as they see fit.
Let’s not go down the metaverse rabbit hole at this current juncture.
With anything generating a palpable buzz online and associated with boatloads of cash, professional sports leagues will come sniffing around. Other professional leagues are already producing their own collectible NFTs. For example, the NBA has recently greenlit Crypto.com Stadium — the home of the Sacramento Kings.
Major League Baseball emblazoned its crypto exchange sponsor’s logo on its uniforms.
With the trendlines moving as they are in professional sports, it’s easy to understand why the NFL is flirting with blockchain.
New rule establishes narrow parameters to operate
Other professional sports leagues are all-in on blockchain and cryptocurrency. In contrast, the NFL’s latest memo sets the tone that it’s merely opening the door.
Teams can seek out blockchain sponsors. However, they aren‘t allowed to incorporate logos or signage at their stadiums. The league also makes it clear: It’s drawing a distinction between blockchain and cryptocurrency.
In essence, you can promote the technology, you just can’t explicitly promote the companies that utilize it. If that feels a bit loop–holey, it’s designed to be. The memo states:
“In this evolving regulatory environment, it remains essential that we proceed carefully when evaluating potential commercial opportunities involving blockchain technologies, and conduct appropriate diligence on all potential partners and their business models.”
Sifting through the legalese, that’s a clever way of stating, “We’re not quite sure how this whole crypto thing is going to go down in the eyes of corporate regulators, so we’re going to tread lightly.”
NFL’s lobbyists lead the way
The National Football League’s memo paving the way for blockchain sponsorships did not occur overnight, or in a vacuum. The league has lobbied the Securities and Exchange Commission on blockchain. Additionally, they’ve made direct appeals to the White House and departments of Justice and Commerce.
This type of due diligence made the NFL comfortable enough to begin courting blockchain sponsors — at least for the moment.
According to the memo, teams’ deals with blockchain companies will run no longer than three years, providing, “flexibility in the long term,” as the NFL’s head of consumer products, Joe Ruggiero, stated to CNBC.
With the exponential pace that blockchain and cryptocurrency are growing, it stands to reason that three years will be more than enough time to evaluate if the NFL wants to go all–in.
At the end of the day, it’s up to the end consumer to decide whether NFTs and other cryptocurrency byproducts are simply shiny new objects or the heraldry of a new frontier in investing and trading.
The NFL, like other monoliths of American sports leagues, is wise to test the barometer regarding new revenue streams, and the latest memo from league top brass suggests that it’s only the beginning of the NFL’s relationship with blockchain.
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