How Mike Winkelmann, better known as Beeple, went from an almost unknown artist to sell one of his digital artworks for more than $69 million at Christie’s last March -three times more than the most expensive Bansky and almost the same as a Monet auctioned a couple of months later- is a tale of how NFTs or non-fungible tokens can reshape a sweeping range of industries from art to music to sports. Why? Because this technology paves the way for the rise of the underdog.

NFTs solve a challenging problem: how to achieve real scarcity in a digital world where almost anything can be easily duplicated. This blockchain-based solution produces a unique, unforgeable, and tradable digital token for any image, video, text, or creation. If created correctly with the right underlying technology, the token acts as a transaction log, proof of ownership, and signature of authenticity. A way to verify ‘singularity’ in a universe of clones. A simple but revolutionary innovation that generates value where there was none. A myriad of fresh business opportunities. We have seen "tokenized" digital artwork, digital music, video clips, virtual real estate, digital pets -from kitties to rocks -, newspaper articles, and even memes or tweets. Now, NFTs are also about to disrupt sports.

A woman looks at an NFT by Ryoji Ikeda titled 'A Single Number That Has 10,000,086 Digits' during a media preview at Sotheby's in New York ahead of an NFT auction June 10, 2021
A woman looks at an NFT by Ryoji Ikeda titled 'A Single Number That Has 10,000,086 Digits' during a media preview at Sotheby's in New York ahead of an NFT auction June 10, 2021 AFP / TIMOTHY A. CLARY

There are already several big household names in the sports industry, such as American football great Tom Brady, who are trying to harness NFTs’ potential. Collectibles, sports tickets, and other intangible assets are being tokenized. The world’s largest basketball league has launched NBA Top Shot, a marketplace that allows fans and collectors alike to purchase and sell video clips of exclusive game moments. The platform has already sold highlights worth around $500 million.

The top-100 football clubs in the world, including Real Madrid, Liverpool, and Bayern Munich, have joined a fantasy football game platform where participants can buy and sell digital player cards -- like a Panini sticker album, but global and interactive. Other clubs, such as Barcelona or Milan, have launched their own fan tokens, while American football quarterbacks are selling collectibles and memorabilia through NFTs. Sorare, a fantasy soccer NFT game, raised $680 million in funding from investors led by SoftBank.

But those projects are missing the point. They are just trying to use NFTs to extract more money for the same elite that has been benefiting from the system for decades. For Tom Brady, Lionel Messi, or LeBron James, non-fungible tokens are just one drop more of profits in a sea of revenue. Sports businesses and crypto companies are forgetting the original purpose of cryptocurrency to help democratize wealth. The real beauty of this technology is its potential to unlock revenue for the minnows of the sports world -- whether it is martial arts, powerlifting or even soccer juggling. It is already happening, with a whole new generation of digital artists rising up on top of the tokenization possibilities. And it is going to happen in sports too, clearing new paths for outsiders to claim their fair share of a $400 billion industry.

Sport at a Crossroads

The sports sector is at a crossroads. The global audiences are evolving at a fast pace, and the coronavirus pandemic has just fast-forwarded some of the trends we have seen emerge in recent years. After decades flooding our TVs, the Big 3 rating —football, baseball, and basketball (could be four or five, depending on your market)— plummeted this year. Big classic sports events don’t attract as many spectators as they used to do, and fewer and fewer people tune in for the regular seasons.

The main reason is that streaming is killing TV. Sport is a young person’s game where most athletes and fans are Gen Zers of Millennials. The phenomenon of people cutting the cord is not new. The way audiences consume and follow sports has been changing dramatically, and covid has likely changed viewing habits forever. At least 30% of sports fans have live-streamed sporting events on their smartphones or tablets, and 79% would only watch live-streamed events. Traditional networks and broadcasters cannot monopolize public attention anymore. This opens an unprecedented window of opportunity for niche sports. More and more disciplines are attracting fans worldwide thanks to online events, social media, and specialized pages and forums. And NFTs are the way to take advantage of it.

In a career promoting alternative sports athletes and events, especially Muay Thai competitions in Thailand, for more than 15 years, I lived and supported athletes and know how sport in poorer countries around the world is often the only alternative to a life of crime for many youngsters. I have learned how we can best help sponsor-desperate athletes and cash-strapped federations; how to align fans’ and investors’ interests as underdogs shape how decentralized sports ecosystems should look.

As the mainstream pay-per-view revenue model is changing, we need to encourage a model of pay-per-engagement. In this system, fans directly support their favorite players, teams, and federations, not the media executives and a few ultra-rich stars. With NFTs, we can design unique collectible cards for every sport and every athlete, no matter how niche they are, unlocking for them a market valued at more than $5.4 billion per year -and increasingly considered an alternative investment. There are still over 90 officially recognized Olympic Sports that currently have barely no collectibles, including games with billions of fans worldwide such as volleyball, field hockey, badminton, or table tennis. That is not to mention the growing popularity of combat sports or the rise of new CrossFit stars.

These unique and verified cards can be then traded in a secure and global marketplace, where collectors and fans can be rewarded for supporting their favorite sports and players. A platform to bring together athletes, fans, and federations from all over the world, splitting the benefits in a fair and transparent way. From folk sports, to Paralympic athletes, to new sport trends or amateur leagues of any discipline.

People are redefining their relationship with sports. They want more engagement, more diversity, and more fun. We have the tools, the opportunities, and the momentum to awaken a new generation of alternative athletes, to serve underrepresented sports and tap long-neglected audiences. NFTs are just the beginning.

(Toli Makris is the founder and CEO of EX Sports, a platform that allows fans to buy, trade and sell digital sport collectibles.)