How NFTs Can Revolutionize Athlete Legacies and Fan Experiences

It's game five week here at Coindesk, sponsored by Caisson where we take a look at the past, the present and future of web three gaming. Our next guest says NFTS and Blockchain based games are transforming the way we connect with professional sports. Matt Novogratz, co-founder of Candy Digital joins us now. Hey, Matt. Hey, how's it going? Thanks for having me. Of course, we've been talking about games all week, but we have yet to connect them to professional sports. So I'm glad we're having this conversation to wrap up our theme week. Now, Matt, when I think about sports and crypto, I go back when NBA top shot was like the talk of the town everyone was doing it. The basketball players were getting in. Um the, the NFTS were growing in value. People were trading, fans were super engaged. Talk to me about how things have progressed or changed since then. Yeah. And, and we get started shortly thereafter. Top shot and the landscape of things has changed a ton, right? I mean, I'm not sure the days of the million dollar PFP, a lot of named Animal project is, is coming back anytime soon, but you know, the, the things it's given us everyone an opportunity to really build the, the rails for the future digital engagement and true ownership of these assets is, is, is, is only gonna grow, right? Like I, I look at my 10 year old who spends every dollar he has on Roblox, like his generation, um, like it's table stakes for them to have ownership of their gaming assets. Like they will not accept that. So for the past few years, you know, we've been building those rails, we've been building more sustainable uh business model, we've been build, building more features, we've been building. Um uh we're kind of what that next phase of this is, right? Like you can't just sell digital lottery tickets anymore. Uh They've got these things have to have built in utility, you have to have a thought out roadmap. Um And gaming really feels like the next big unlock. I love talking to people about this who have kids because they understand it in such a different way. And that story has come up a lot of times in the interviews, I do that people with Children, their kids, they just want money that they can spend in Roblox. They're not interested in physical items anymore. If you're in a physical store like Costco or something, they want the gift cards so that they can go home and, and spend that money for I, I'm just curious uh for you as a father seeing this happen, I guess, through your child's eyes, has it given you a better understanding of what you're building and what the future looks like 100%. Um, in fact, uh, he's often, uh, like one of our first testers on some of the things we do and like myself and I'm a traditional baseball card collector. I go to swap meets and conventions. Uh, I had a tough time seeing my kid doing that in 10 years or 15 years. Um So, yeah, like it isn't crazy to me that people of his generation will put real value in these digital assets and these digital baseball cards in a different way than the speculative drivers of the, this first uh kind of bull rush did. You know, I'm so happy we're having this conversation today. We do this segment on coin desk called Charter of the Day and yesterday, our chart of the day we looked at a RG Argentina uh football association's fan token, it soared after they beat Canada and it pains me because I'm Canadian. But it was a really interesting use case to see that a RG Argentina football club's fan to is doing so well. It was like, you know, wow, this is how fans are using some of these things to, I guess, like make bets on what their team is going to do. I know it does so much more, but talk to me a little bit about that. News in relation to sports teams. Do you think we're going to see more teams adopt fan tokens? And how might we see fan tokens incorporated into the fan experience? Yeah, fan tokens are an awesome idea and it's kind of creates the dow around a team in many ways you can vote on uniform combinations and one day maybe you can vote on trades and things like that. We're not quite there yet. Um, I think it leads into whether it's fractional ownership of sports teams where you really give fans uh a chance and a voice. Um You look at the, the European or the, so the German soccer clubs, they're basically community owned, but the community doesn't really get any value out of it other than, you know, they get to go to the games, they get to say this is my team. But if you actually put 20% of that team in a dow or fractional uh structure where you could truly own and trade these uh shares and then the fan really has a voice. Um That's where it's gonna go. Tell me a little bit more about that because we've seen, you know, one of the big challenges with Doos right now is that like incentivizing that engagement in a sustainable way, has, has become something that doos are really focused on solving. I don't know if anyone has solved it yet. Like, how do we get fans to want to participate on a long term scale. Like how do we continue to incentivize them to show up every day and participate in some of these activities that are now being handled by management teams? Yeah, I mean, you've got to get more out of it than picking the fifth uniform combination. It's gotta be, it's gotta be something more and you have to get, you have to get rewarded. Like, um the biggest fans, I'm not saying that the most, the fan that spends the most should get, get rewarded, but people that participate the most should have different access. Um Whether that's, you know, you scan your phone in and you, you have voted in the most votes. Uh You're the most active participant in the dow like maybe that upgrade your seat for the day. Um There are different ways that you truly reward this engagement and, and again, like I, I really think there will be a time where uh there'll be a seat at the table for the fan in the management side of things, whether that's uh the dow has a proper board seat. Um But that's how you incentivize it. You know, the solution is being introduced um in many different parts, I guess of the sports and entertainment industry artists are starting to adopt web three technology for fan engagement in a similar way. Uh And it's all about removing the middleman, distributing value, distributing power, right? And the question I ask people when we're talking about this with artists? Is, is there a place for the middleman? Is there a place for the publishers, the streaming services, the Hollywood Studios? And so I guess my question to you is, does this displace team owners, does this displace the big franchises and associations or is there a way for everyone to work together towards this future? Like I, I think it just enhances everything. Like when I look at social media with athletes, it's pretty much a one way relationship where they just send out a tweet and maybe people would, you know, come back and then I think it got so nasty that they stopped reading the replies. Uh What, what web three allows for is truly like a one on one connection with your biggest fans, you know, who your biggest fans are and same with artists, right? If they can, they can do what they can take as much out of it as they want. But, you know, it's nice to have the, the publishing muscle behind you, the promotion behind you as well. Um So I think it's just, it's a, it's a, a great add on um in a way to get deeper if you want to tell me a little bit about the teams, the players, the franchises you're speaking with from your position at candy, what kind of questions are they asking? Are they on board with this division or is it taking a little bit of convincing Yeah, you know, everyone's a bit different. Um, some teams, some players were super early, they're very into it. Others, a bit more skeptical. Uh Some of the events of the past couple of years have led to a few more skeptics with some, you know, less than great players in this space. But the true believers, um, you know, they haven't wavered on their commitment to this and they're continuing to grow. They know this is a longer, a longer vision. I think I always go back to this, like my favorite uh use case of what this can become. If you, you have your candy digital wallet, you scan into a game. Um And it says like I've got the most Tampa Bay devil rays, uh NFTS. Um and they get you upgraded because as I said earlier and when talking to the rays, for instance, like that's something that they're excited about. So some of the teams are very forward thinking and they're constantly looking at ways to incorporate web through technology into the everyday fan experience. Tell me a little bit more about that. We've talked about NFT so far, we've talked about uh fan tokens. What do you think? Well, I guess you just told me about the use case but like, tell me a little bit more about that killer use case. That thing that's going to uh bring web three to a mainstream sport audience. Yeah, I mean, it's ticketing for sure when you look at the Super Bowl, the, the, the get in price is like 10 grand, the NFL C, none of that. They don't know who their audiences are more importantly, right? So like all the big leagues, every, almost every, every ticket is sold in the secondary market, they have no idea who their, their fans are, the audience are. So how do you uh how do you engage with them, how do you offer them exclusive uh deals? Um So ticketing is one thing and it's also the one thing the fan misses. We've done commemorative ticket with major league baseball for the last three seasons. It's by far our easiest way to onboard people into the space because it's something that they, that they lack for in the game day experience. They like it uh last year during the postseason. I think we on boarded close to 100,000, uh, new users to candy. And we also offered this ability to add in a moment or memory from the game, something like 35% of the people that downloaded one of these tickets or got one of these tickets added that memory in there, which is a staggering number, uh because it wasn't like a super easy process. Um But it shows that that's what fans want, fans want tickets. Uh They don't care if it's an NFT necessarily. Uh but it's a good way to kind of, you know, sneak them on to the to our side uh and introduce them to this, this world. And then once they're in, they might find out that like digital baseball cards or there's a game that we're offering on, on candy.com that they want to give a try. Uh And it's a, it's a nice, it's a very nice introduction and I do think the sports leagues need it and it's inevitable they will have it. Yeah. What you're describing to me almost sounds like the next iteration of social media, but it sounds so much more social, right? You get to share and experience in this community that really loves one of the things that you love. It just feels like um uh a social experience with a little bit more substance than we're used to. Yeah, for sure. And everybody doesn't have to get as deep as they as they want, but it's nice if it's there for you. Um It's great to be, I'm a huge Orioles fan. It's great to connect with real Orioles fans and you find out and you, you can trade different uh different art items with them, you tell stories, but it's, it's a really, it's true. And when you look at, you always talk about communities of web, three sports fans are kind of the original communities in America in many ways, right? Uh whether it's at a sports bar or meet up. Um and this is just another offering that we think can really deepen that engagement. You mentioned hundreds of thousands of people being on boarded um through different sporting events. Do these people know that the Web Three Tech is there or is, has that been kind of abstracted away and hidden beneath the surface? Yeah, we've, we've definitely abstracted it um intentionally early on now, we're realizing that um you know, people are ready for a bit more, but I do think that for the big wave for the next tens of millions of people to come in, it's gonna have to be a super easy process where they're, you know, they don't necessarily need a, their own wallet, um right away. Uh But it's more of an introductory introduction to the space. Um And that's how we've had the, the easy success. We've had programs have been uh integrated within the major league ballpark app um in the past which you don't even know what you're doing, you're scanning your ticket in normally. And then all of a sudden you get this offer to redeem a ticket, which is pretty cool. Now, before we wrap this up, tell me, is there one team, one association, one, franchise, one player that has done this really well, like who stands out to you? Who do we look to for that real glowing example of what could be in the future? You know, II I kind of have to say major league baseball, we've done some really cool stuff, but outside of us, the Australian open has done a really cool um did a really cool experiment a few years ago where you could own different pieces of the court. That was, that was awesome. Um I still think top shots done some pretty cool stuff out there. The NBA is forward thinking, major league baseball is forward, are a very forward thinking, uh, organization, all of these leagues. They know that, that they need to get into Web three and they are, they're innovative groups. Um, and I expect big things in the future. Matt. Thanks so much for sitting down with me as we wrap up game week. Thanks a lot for having me and for any of you that want to read Matt's piece that is on Coin desk.com. This is the last day of game five week. So if you head on over to our website, you'll see a few videos and a bunch of articles that unpack where Web three gaming is going and all the industries that it's touching head on over to Coin desk.com now.