New Zealand Rugby used the Rugby World Cup as an opportunity to announce its new financial venture. Photo / Photosport
New Zealand Rugby used the Rugby World Cup as an opportunity to announce its new financial venture. Photo / Photosport
OPINION:
As rugby fans ushered in a bright new future for professional women athletes at the World Cup, New Zealand Rugby quietly pulled off its biggest heist under its new Silver Lake partnership.
Earlier this month, New Zealand Rugby Commercial (NZRC) — the new entity created with Silver Lake followingthe confirmation of its controversial private-equity deal — announced that it was taking its "first step into the metaverse" by buying some NFTs.
NZRC announced that it had purchased 33 NFTs, a collection of digital art from an online community called World of Women that it claims, somehow, shows "support for the Black Ferns and women's sport ahead of the Rugby World Cup". Support for the Black Ferns doesn't apparently involve better pay or financial bonuses for winning tournaments like their male counterparts.
NZRC boss Richard Thomas said the goal of the acquisition was to "engage with and better understand" Web3 communities and their relationship with sports and entertainment.
"We wanted to show that we take this first step [into NFTs] together, as one, just like the Black Ferns do every time they step onto the field," Thomas added. "To be able to align our first step with the Black Ferns Rugby World Cup campaign is hugely exciting."
The ultimate end goal — a potential new revenue stream for NZ Rugby.
New Zealand Rugby Commercial bought 33 World of Women Galaxy NFTs. Photo / NZ Rugby
New Zealand Cricket were the first major New Zealand sporting organisation to enter the NFT market, announcing in July a five-year deal with Indian sports technology company Dream Sports to build "cricket's first ever" digital fan-engagement products, including NFTs.
An NFT, or non-fungible token, is digital art or animation with built-in codes representing ownership. It is purchased and owned through the blockchain, a system where transactions made in bitcoin or other cryptocurrency are recorded.
It all exists in what some are calling Web3, billed as a new decentralised world wide web that is built, operated and owned by its users. NFTs are often pitched as collectable cards for the digital era.
NZ Rugby's move into the unregulated, speculative world of NFTs and Web3 — what supporters are calling the future of the internet — is essentially a soft-launch of a new way to tap into the loyalty of fans.
Sports fans from all over the world, who've already had to deal with increasingly expensive streaming and TV subscriptions, pricey tickets to games and ludicrous food prices at stadiums, are already being sold snake oil in the form of digital products with no real utility.
The NBA in the US was one of the first sporting organisations to sell NFTs called Top Shots, offering entirely digital video clips of basketball games to fans for purchase, which can then be traded on the market. The most expensive NFT is currently a highlight reel of a layup by star guard Derrick Rose at the inflated price of US$1 million.
The NBA was one of the first sporting organisations to sell NFTs to fans. Photo / NBA
NFTs like the NBA's Top Shots are sold as a way to own a "moment" and a piece of history, all built upon artificial scarcity. But like most NFTs, it's been exposed as nothing more than an outlet for speculation and pump-and-dump financial schemes. Many fans have suffered massive losses in the volatile market. According to Protos, the value of these NBA NFTs has dropped by 90 per cent since early 2021.
Many other sporting organisations have since entered the NFT realm in search of a new financial borehole that preys on the loyalty of fans. While some sporting NFTs have at least attempted to provide tangible goods or services, like tickets to games or unique sporting experiences, most of the NFT market is filled with rudimentary digital art or just plain old scams.
Earlier this year, leading NFT marketplace OpenSea admitted that 80 per cent of NFTs created for free on its platform were spam, scams, or otherwise fraudulent. There have also been worries about the security of NFT ownership, aside from the absurd concept of "owning" digital images, with more than US$100m worth of NFTs stolen since July 2021, according to a report by cryptocurrency analyst Elliptic.
The fact the governing body of New Zealand's national game would be involved in something that's shown itself in many cases to be nothing more than a profit-driven grift at the expense of fans would be shocking — or even appalling — if it wasn't already so widely entrenched in the greater economy.
The logical next step in the questionable financialisation of rugby would be the release of NZ Rugby's own NFTs for purchase. There will inevitably be many who will embrace it, the false promise of financial freedom under a brutal economic system — the root of the entire Web3 apparatus — too tempting for some.
But the overwhelming lesson from the trajectory of NFTs in other sports is buyer beware. A seemingly warm and appealing (silver) lake has been built. Fans should be wary of diving in.
