Why NFL Has Banned Cryptocurrency NFT Sponsorship For The Teams
It has been reported in The Athletic that the National Football League (NFL) will not allow players or teams to sign sponsorships with cryptocurrency trading firms or sell branded no-fungible tokens (NFTS).
It is thought that the NFL is developing a league-wide digital strategy of its own, and any deals within the market could compete with its own offerings. The NFL is in the midst of hiring someone to develop a strategy for the sector.
According to guidelines read by an unidentified team member at The Athletic, “Clubs are prohibited from selling, or otherwise allowing within club controlled media, advertisements for specific cryptocurrencies, initial coin offerings, other cryptocurrency sales or any other media category as it relates to blockchain, digital asset or as blockchain company, except as outlined in this policy.”
This new strategy, which is being developed by the NFL, follows a number of other sports leagues that have already delved into their own digital assets. As always, the NFL is being cautious with these new commercial categories and is going slowly before making any big moves. This same behaviour was seen when the league relaxed its rules around gambling and alcohol.
In terms of cryptocurrency, teams are currently only allowed to align with companies that are a step removed from trading- assets managers that sell funds to track the digital currency markets.
The new restrictions will affect many crypto-giants including NFL player endorsed FTX. FTX is a crypto exchange that has been endorsed by football icon Tom Brady. The exchange has made some huge gains recently, after signing a $210 million agreement to change the name of esports organisation Team SoloMid to TSM FTX.
The National Football League has also banned the trading of team NFTs, however, this ban is only for the time being and will undoubtedly change when the league has its own strategy in place.
The NBA has recently seen much success with NBA Top Shot– it’s very own vault of NFTS which are digital highlights marketed as unique to the buyer. Top Shot is operated by the NBA league and not by individual teams. It is thought that the NFL strategy may contain something similar.
The NFL policy does not allow any sponsorships with “companies whose primary business is providing investment advisory and or fund management services in connection with cryptocurrency, provided that such advertising sponsorship rights are limited to promoting the company’s corporate brands”, according to the team official.
Before this rule was put into place, digital currency investment firm Grayscale has been sponsoring the New York Giants. This is one of the only blockchain partnerships in the NFL space.
The NFL is currently hiring a Director of Emerging Products- a role that requires expertise in NFTs, blockchain and cryptocurrency. This infers that the league is beginning to make their own blockchain strategy and profit from the proven popularity of sports NFTs that has been seen in the NBA.
Fans of the NFL could soon be able to collect their own unique non-fungible tokens, giving them extra insight into the sport and allowing them to make investments on the blockchain.