Cleveland Cavaliers fans soon could have digital lockers, where they would store non-fungible tokens from the team.
The digital collectibles could include bobbleheads that change from a standard format to one wearing a snowcap during the holiday season, championship rings that have color schemes tied to tiers that are based on fan avidity, and clips featuring classic calls by late broadcasters Fred McLeod and Joe Tait.
Also part of the organization's NFT plans, it seems, are fan tokens.
The Cavs announced a partnership with Socios.com, which dubs itself as the leading blockchain provider for the sports and entertainment industry, on Monday, July 26. How the partnership evolves is still being determined, the team said, but the initial components include some premium sponsorship placements.
The Socios.com logo will be placed on the lower portion of the Cavs' practice jerseys, starting with the 2021-22 season. The blockchain provider also will have its brand visible on courtside LED signage, and Socios.com can use the Cavs' marks and logos in their global marketing efforts outside the U.S. and Canada. That makes Socios.com the first Cavs partner to utilize the opportunity as part of the NBA's International Team Marketing Program, the Cavs said.
Socios.com is the blockchain platform of Chiliz, a Malta-based fintech company that developed the $CHZ cryptocurrency. Chiliz has some significant international sports partnerships, most notably in soccer, and is investing $50 million in an effort to expand its reach in the U.S.
The Cavs joined the Boston Celtics and Philadelphia 76ers as Socios.com partners. Other notables in the Chiliz portfolio are the New Jersey Devils, UFC, and soccer heavyweights FC Barcelona, Paris Saint-Germain, Juventus, AC Milan, Atlético Madrid, Manchester City, Valencia, Inter Milan and Arsenal.
For Cavs fans, the most interesting element of the deal likely will be Socios.com's use of fan tokens. How those work, according to the company's website, is fans, after downloading the Socios.com app and creating an account, pay for Chiliz. The cryptocurrency, which is currently valued at about 26 cents per share, can be exchanged for fan tokens.
Teams that partner with Socios.com, according to Reuters, give fans a chance "to vote in a series of polls and receive special promotions and rewards."
A chunk of the funds from the sales are passed on to the teams. Socios.com said it's "already generated" $150 million in revenues for its teams this year.
Monday's announcement is a key piece in the Cavs' big-picture plans for NFTs. As we noted in a story for Crain's print edition last week, NFTs are unique pieces of digital content — from artwork to songs, tweets and memes — that can be "minted." Once an NFT is authenticated, it lives on the blockchain, and it can be bought and sold.
The Cavs recently launched an NFT platform. There, fans can sign up to be notified when the team drops a digital collectible.
Mike Conley, the chief information officer for the Cavs and Rocket Mortgage FieldHouse, told Crain's that the team envisions its marketplace as one on which collectibles can be bought and sold, with fans earning rare NFTs for attending a certain number of games and interacting with the team in a variety of fans. At the time, Conley said the Cavs intended to partner with a company that would run the platform and convert the proceeds to U.S. dollars.
In a news release Monday, Conley said the Socios.com partnership "is another significant step forward as part of our ongoing exploration into blockchain technology and how it can be utilized within our business to grow and enhance fan engagement."
The fan engagement aspect is what's driving the organization's efforts in the NFT space, the Cavs' CIO told Crain's earlier this month.
The team believes it can create "a community" of collectors that includes casual and "super fans," Conley said.
Fans, he added, would be able to go on the platform "and understand what's available, what individuals have in their lockers, what they want to look for, and say, 'Hey, I'm looking for this version of the ring. If anybody comes across it or has it, let me know.' And it creates a peer-to-peer community where people are sharing their interests and kind of showcasing their fandom, more so than just the idea of giving somebody a commodity like an NFT that has value."
The Cavs also are looking into the possibility of digital concert posters for prominent events at the FieldHouse. To get one, customers would have to be verified attendees of the show.
"We're looking at it as a way for us to fend off other habits that we're seeing changing within the live-event experience," Conley said. "It could be beneficial to ensure that people are attending the events, we're getting better show rates, we're getting customers that are attending these events, as opposed to those that are trying to broker through and take advantage of the event itself to maximize their opportunity for revenue."
Another possibility: ticketing.
"Blockchain-based ticketing makes a lot of sense," Conley said. "There are a lot of challenges between primary and secondary markets with tickets and teams losing transparency and brokers gaining leverage and being able to game the system that blockchain could help mitigate."
NFTs and the blockchain are subjects that can seem complicated. Asked if he thought enough fans understood NFTs, Conley said, "I don't think so quite yet."
But acquiring cards, bobbleheads and other collectibles associated with their favorite athletes and teams is something many have been doing since the days of plastic binders and gum that was so stale it could break a tooth.
The vast majority of us have used tokens at an arcade. Now, digital versions are commodities that are coveted by some collectors.
In June, the Cavs gave out more than 50 "Locker Room" NFTs to sponsors at a private event. In the coming months, the team said it will announce how fans can acquire other Cavs digital collectibles.
It might seem like a scary, complicated, new world. Conley views the digital method as the best path for collectibles.
"I think everybody has heard about NFTs, but a lot of people don't understand the concept behind a non-fungible item," the Cavs executive said. "They think an NFT is something that is worth a lot of money, that it is a collectible that you've got to hold on to. And in reality I think a lot of what we have in front of us is simplified education on what an NFT is and how it can play into the building of a collectible community, and why NFTs are the path to the future for collectibles, because of the way that they are assigned back to the blockchain for authenticity."
You can follow me on Twitter for sports information and analysis, but not an explanation of why some NFTs have been sold for seven figures.
Source : https://www.crainscleveland.com/kevin-kleps-blog/new-socioscom-partnership-key-aspect-cavs-nft-plans1257