The English Premier League has struck a multimillion-pound deal with Sorare, the blockchain-based fantasy sports game, as the world’s most popular football league bets that trading in digital collectibles will survive beyond the current crypto slump.
Paris-based Sorare — which is backed by star players including Kylian Mbappé and Lionel Messi — announced a four-year licensing contract with the Premier League on Monday. Users will be able to collect and trade digital cards representing players from all 20 English top-tier teams and use them in its fantasy football game.
Sorare will pay the Premier League tens of millions of pounds a year to secure the rights, according to people familiar with the agreement, with each year’s final payment dependent on performance.
Under the deal, the Premier League also has an option to take an equity stake in Sorare. The start-up was last valued at $4.3bn in 2021, when SoftBank’s Vision Fund, Benchmark, Accel and others invested a total of $680mn.
Richard Masters, chief executive of the Premier League, said: “The way that supporters follow their favourite teams and players is evolving and the Premier League is always looking for ways to engage with fans.”
However, the deal comes after the bankruptcy of crypto platform FTX led to renewed scrutiny of partnerships between sports and the nascent crypto sector.
FTX sponsored Major League Baseball and signed endorsements with celebrities in the hope of targeting sports fans. A report by IMG-owned sports consultancy Seven League said the collapse in crypto prices had hurt the appetite for digital sports collectibles.
Sorare’s cards use the same “non-fungible token” technology to verify ownership as high-valued NFT collections such as Bored Ape Yacht Club, many of which have seen extreme price volatility in the aftermath of scandals at FTX and other crypto exchanges over the past year.
Sorare’s co-founder and chief executive Nicolas Julia said his company was different to other crypto start-ups because its tokens had utility beyond mere price speculation, in a fantasy game that has attracted more than 3mn sign-ups since the company was founded in 2018. He would not provide an active user figure.
“To be frank, I don’t love the craziness of the last six to 18 months [in crypto],” said Julia. “You get lots of organisations and companies thinking short term and jumping into the new cool tech for the wrong reasons, then leaving fans with a bad taste in their mouth.”
The Premier League is Sorare’s third big new partner in 12 months after teaming with US leagues the National Basketball Association and Major League Baseball.
During the mania of the past two years, crypto groups forged alliances directly with several Premier League teams, including Tezos’s sponsorship deal with Manchester United.
Clubs including Manchester City, Arsenal and Everton have issued so-called “fan tokens” with providers such as Socios. Many of these have fallen in value alongside the broader sell-off in bitcoin and other speculative digital assets over recent months.
Sorare’s revenues increased 50 per cent in 2022 compared with the previous year, as gross merchandise volume — a measure of total user spending on its platform, before accounting for revenue shares with partners and other fees — rose from €270mn in 2021 to about €500mn last year, Julia said.
Like many crypto companies, Sorare is also facing regulatory scrutiny.
Alongside the Premier League announcement, Sorare is launching new features to expand free-to-play access to its games and improve player safety, after reaching an agreement with France’s gaming commission, the ANJ.
Julia said the company was “maintaining a dialogue” with the UK’s Gambling Commission, which is also examining whether the fantasy game — which offers prizes in the form of cryptocurrency and NFTs — constitutes gambling.
Source: Financial Times