Sportico reports that the UFC will sell NFTs through Panini America in a licensing deal in which the digital collectibles will be sold on Panini’s own marketplace.
The sales will provide a little more in terms of fighters share as they will receive 50% of the proceeds according to the report.
Per the article, “[f]ighters typically receive about 30% of UFC’s cut on licensed apparel and merchandise. For NFT,s the mixed martial arts promotion is planning to raise the share to 50%,” according to UFC’s Lawrence Epstein.
Foreshadowing of the impending NFT market for the UFC occurred this spring when Endeavor’s Ari Emanuel noted this in a CNBC interview. Non-Fungible Tokens are part of the Ethereum blockchain. Ethereum is cryptocurrency, but its blockchain supports NFTs which store extra information that makes them work differently from other types of crypto.
It should be noted that Crypto.com has forged a deal with the UFC but it appears that it has nothing to do with this announcement.
The UFC will be selling digital moments that an individual can purchase. One might expect that like NBA Top Shot, the moments will be one of a kind and have a number attached to each NFT.
An interesting snippet from the article is that licensing revenue has been growing since Endeavor purchased the UFC and the licensing money it distributes to athletes is expected to top $1 million for the first time in 2021 which triples last years total.
The PFL has offered digital tokens through Socios.com which has been wildly popular.
Payout Perspective:
The once-hot NFT market has slowed down slightly as we have seen a flood of NFTs from the spectrum of sports, arts and entertainment. Still, there is a segment of investors that believe the NFT market is still growing. We should note that the Panini licensing deal likely makes the UFC’s loss (in terms of allowing 50% split) negligible and we may infer (opinion only) that with the 50% split the company is in a ‘wait and see’ approach as far as how popular NFTs will be.
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