NFL temporarily bans teams from signing sponsorship deals with NFTs and cryptocurrencies
While other sports leagues have allowed their teams to get in on the ground floor of NFTs and cryptocurrency, the NFL is hesitant to do the same.
The league has informed teams that they are not allowed to sell sponsorships to cryptocurrency trading firms or sell NFTs (non-fungible tokens). It seems the NFL is being cautious in building its business plan and strategy within the NFT environment or digital art and sports trading cards.
"Clubs are prohibited from selling, or otherwise allowing within club controlled media, advertisements for specific cryptocurrencies, initial coin offerings, other cryptocurrency sales or any other media category as it relates to blockchain, digital asset or as blockchain company, except as outlined in this policy," read an NFL statement.
Here's a better explanation of what the NFL said in layman's terms.
First, a blockchain is a digital ledger with technology that powers NFL and cryptocurrency sales. The NFL is also restricting working with some of the top names in crypto such as FTX, Coinbase and Binance. FTX is endorsed by Tampa Bay Buccaneers QB Tom Brady, which seems to be allowed under the new policy.
The policy, though, dictates that NFL teams are restricted from the same. It doesn't extend to individual players. With this decision, the NFL could be losing out on a ton of potential revenue. FTX and the NBA's Miami Heat have a naming rights deal worth $135 million over 19 years and there is a 10-year, $210 million agreement to change the esports organization Team SoloMid to TSM FTX.
Some people may not understand NFTs yet, and you're not alone. NFTs are basically digital collectibles that are highly limited, can increase in value over time, and can be traded.
NBA Top Shot is a classic example. It's a whole collection of NFTs that are digital highlights of a specific player or game. Most of the rare ones only number in the 100s-800s and are unique to the buyer. The most expensive NBA Top Shot at the moment is a legendary 1-of-32 of LeBron James posterizing a Sacramento Kings defender on a dunk, which is now worth $1 million. NBA Top Shot is owned by the league itself, but it's a ton of revenue.
From an NFL standpoint, what would an NFT of the Philly Special go for? It would likely be a legendary-level NFT with only a few dozen available. The Immaculate Reception? The Helmet Catch? The Hail Murray? All of these could have a $1 million value. Players like Rob Gronkowski have already released their own personal NFTs for purchase.
This doesn't mean the NFL will never be in business with NFTs and cryptocurrency. They just want to find the best way to approach it before opening up their teams to conduct business. Several players have elected to be paid only in cryptocurrency as it's a revolutionary market. It appears to be a matter of when, not if, for the NFL.