NFTs – or non-fungible tokens – are digital assets such as pictures, video or audio which can be bought and sold.
Tim Mangnall, CEO of Capital Block, is currently advising leading clubs how they can launch NFTs for their fans.
“Every club in the Premier League is looking at NFTs,” Mangnall tells i. “They’re having a conversation. One hundred per cent.
“We’re talking with big European clubs, big Champions League clubs, top four, top 10 Premier League clubs to come. We’re looking at every area from ticketing, creating historical collectible memorabilia, we’re working with kit partners to create launch shirts, mini-gamification, a locker where you store NFTs, unlocking rewards at clubs, we’re looking at the metaverse for some of the clubs.”
One of the most popular NFT sales come from Bored Ape Yacht Club, who released 10,000 cartoon images of an ape in different designs that initially sold for £140 but now trade for up to £250,000 and are owned by celebrities.
But Mangnall insists potential buyers should be extremely cautious of NFTs currently for sale, describing the market as a “gold rush” and believing “95 per cent” of NFT projects “will fail”.
The controversy around the crypto industry’s move into sport was highlighted on Wednesday when it emerged that IQONIQ, one of sport’s biggest cryptocurrency-based fan platforms, had collapsed.
The Premier League is also reported to be seeking legal advice regarding the image of its trophy being included in an NFT launch called Ape Kids Club which has been promoted by former England and Chelsea defender John Terry.
Mangnall believes people should stop seeing NFTs as investment opportunities and that if approached right they can be harnessed by the sports world – particularly football clubs – to drive fan engagement.
“All areas of clubs will be touched by NFTs, but we’ve really got to move away in sport from this big-money perception, of it’s going to worth $180 today and £1.2m dollars in the future, that isn’t why NFTs are going to flourish in sports. It’s going to be around fan engagement.”
Mangnall believes society is “minimum three years away” from the average person understanding and engaging with NFTs. “We’ve got a long way to go,” he adds. But he is confident it will be a way for sport to engage with the younger generation of fans. “Younger fans are more aware of this, it’s normalised, Twitter is a big driver of NFTs but it’s all about reaching out through Telegram and Discord [messaging apps],” he says.
Manchester City became the first Premier League club to launch a range of NFTs last year, although it made little dent in public consciousness. Barcelona also launched NFTs in 2021 but “now the project is dead and it was very embarrassing for Barcelona”, Mangnall says.
Increasingly European football’s star players are promoting NFTs via social media in return for large sums of money. But Mangnall urges them to take responsibility for the products they are promoting.
“If they want to do it and lead their fans and followers down something and haven’t made that choice to actually do some research because they’re looking after their own interests rather than the fans then that’s their prerogative and I think over time it will probably come back to bite them and doesn’t make them look good,” he says.
“What you’re now seeing is a gold rush… the sheer volume of it is unsustainable. Everyone wants to jump on it.
“And for football clubs, it’s not about revenue, it’s about them being the most powerful tool for fan engagement and connecting to fans.”
What is the point of NFTs?
A question that has cropped up time and again when speaking to people who currently view NFTs with wary scepticism is: what is the point of them?
So you buy an NFT and you own a digital asset on something called a blockchain. If you have been on the internet in the past year, you may have seen pictures of “Bored Apes” in various designs. When a batch of 10,000 NFTs were released by Bored Ape Yacht Club last year they sold for around £140. It has been one of the most successful NFT projects and today they are owned by celebrities and sports stars and can cost around a quarter of a million pounds.
Surely if you really wanted a copy you could just screenshot one? When Mangnall explains it, however, it starts to make sense.
It can seem hard to discuss publicly crypto’s move into football and wider society, torn between wanting to explore a growing industry already worth billions and not wanting to be the confused journalist hoodwinked into helping the guy flogging magic beans to the masses.
So it’s important to be clear that Mangnall is coming at this from the side of someone making money out of a rapidly growing market, while I am coming at it from the other side, of uncertain outsider.
Yet though Mangnall is clearly in the pro-crypto camp, he is honest about the industry as a whole: how most NFTs releases will probably fail, how people are foolishly putting money into what they believe will be get-rich-quick schemes and face losing a ton of cash, how NFTs need to be viewed as a tool of fan engagement and not an investment, particularly in sport.
But first, to my original question: can’t you just screenshot that image of a Bored Ape some guy spent half a million on and stick it on a wall, or make it a social media profile pic?
“You could walk outside your house, see a Ferrari on the street, take a picture of it, put it on your Instagram, it doesn’t mean you own that,” Mangnall says. “You can pretend you do. The same way you can own a Picasso print on your wall, but you don’t own the original.”
It may be hard to understand now what the point might be in owning a digital asset, but many celebrities are handing over hundreds of thousands for them. Mangnall envisions a time when fans engage with their club through the metaverse – the virtual reality world big tech is betting the house on as the future of online connectivity – where these digital assets could be kept on display or unlock unique benefits.
“We believe NFTs are not necessarily about driving revenue for that club but about creating fan engagement that if you own this you can get access to these benefits,” he says.
As would be expected of somebody whose job it is to advise clubs on digital strategies, the potential ideas Mangnall shares do sound fascinating.
Mangnall is an Arsenal fan, and uses his club as an example. Arsenal could release one thousand NFTs of the manager, Mikel Arteta. When owners of the NFT walk through the virtual Emirates Stadium corridors in the metaverse they could arrive at the door of the manager’s office and only owners of that NFT are allowed in. Inside, there could be a personalised video message. Or the club could launch an NFT of an Arsenal badge that gives the owner a virtual locker to store their digital assets. Adidas could launch a limited-edition NFT Arsenal shirt and they also send the owner one in real life. A club could launch a founder’s NFT, he says, that gives once-a-season access to a box at the stadium, or lunch in the canteen with the players, for as long as you possess the NFT.
“A lot of people will want to hold it,” he says. “The value of it will go up because there is a scarce amount and more people want to experience it. If you make it cool and artistic that adds benefit. The value will drive up but you’re not going to wake up and look at the market and cash out.”
Mangnall is also an investor in cryptocurrency, buying Bitcoin and Ethereum five years ago, but is keen for perceptions to change about NFTs and cryptocurrencies. “It’s not a get-rich quick scheme,” he says. “There’s long-term holding and investing and really looking at the market. Sometimes you’ll hit the market perfectly. The same way you might hit the stock market perfectly. But you can lose money very easily as well.”
He believes the rare cases of random cryptocurrencies skyrocketing in value do more harm to the industry than good. He points out a cryptocurrency coin called Shiba Inu. “If you put £1,000 in that this time last year you’d be a billionaire today,” he says, and it’s perhaps telling that in the days after he said this to me the cryptocurrency market crashed.
Mangnall explains there is no “real world use case” for Shiba Inu. It’s not even certain an owner can cash out their billions. And these cases paint an unrealistic picture of the industry and are detrimental to it, Mangnall says.
“Crypto influencers don’t help. Singapore has completely outlawed promotion of cryptocurrencies and says influencers are not welcome. Spain has kind of said the same. Get-rich-quick schemes don’t happen. Hard work pays off. If you’re going to chuck 10 grand at it without doing research and think you’re going to get rich overnight and solve all your problems, life doesn’t work like that. For some people it does, but for 99 per cent of us it doesn’t. There needs to be more regulation and warning.”