College sports’ first NFT was minted on March 14 inside of the Merrell Center in Katy, Texas—home of the Southland Conference men’s and women’s basketball tournaments. “As soon as the [women’s championship] game ended, we deployed the contract, verified it and minted the token right there in the arena,” Stephen F. Austin assistant AD Wally Crittenden said.
The one-of-one tribute commemorating the Stephen F. Austin LadyJacks’ first NCAA Tournament berth was immediately placed up for auction on website TheFanBlock.com. While the institutional fundraiser benefiting the SFA Purple Lights Fund raised just $100, Crittenden says it is easy to envision NFTs becoming a real “revenue generator” for athletic departments moving forward. “There is no shortage of fans supporting every collegiate program,” he said. “There is no shortage of digital assets that talented creatives are making internally, and certainly there is no shortage of moments that can be celebrated.”
Our Take: To be clear, SFA didn’t mint college sports’ first NFT expecting to sell it for thousands of dollars. Crittenden said the attitude among athletic department administrators was much more, “Let’s put this out there and see what our fans think. It was a trial [balloon] with little-to-no risk assumed by the institution.” In fact, a big reason why the Texas school chose to put the Southland Championship moment up as its first auction was because it finally could. Crittenden began exploring the NFT space late last summer. But it wasn’t until the Tron blockchain launched support for NFTs in mid-December that it became a possibility.
The significance of the Tron blockchain is that it supports the Fan Block app wallet. Crittenden—who, in addition to working in the SFA athletic department, founded the company responsible for building the Fan Block app, Modern Sports Group—said Tron was chosen because of its low fees and the speed of transactions. “Fans can do several transactions a day that don’t have any fees due to daily bandwidth, and when we send tokens it’s faster than a credit card transaction. So, it’s sustainable and reasonable in a high-pressure environment. There are other great blockchains out there, but the cost for users to participate, as well the per transaction cost, didn’t make sense for what our future goals are.” Tron’s low fees to mint also make it feasible to mint NFTs at scale.
Running pilot programs in crypto is nothing new for SFA. The school’s athletic department has been experimenting with the tokenization of assets since 2018. Initially, they minted two tokens—the SFA Athletics token and the SFA Golden Jack token—in an attempt to create a cashless environment (which helps save on processing fees, among other benefits). The SFA Athletics tokens were rewards tokens that the holder could exchange for tickets, merchandise or on campus at the Campus Recreation Center, for example. “The Golden Jack token [was] more of our premier VIP token, something that could be used for premium benefits,” Crittenden said. Of course, a school could tokenize anything “as long as [the value of the token] is established, and they have a fan app that is easy to use,” Crittenden said. “How great would it be if instead of getting a T-shirt at a game, you leave with an NFT supported by [the school’s] fan app?” he wondered.
The assistant AD said the 2018 pilots went great (which helps to explain why SFA was first in the pool on NFTs). “To be able to have a single administrator manage rewards distribution for the entire athletics department, from their phone, and to [be able to do it] within seconds of fulfillment [is a game-changer],” Crittenden said. “To allow for a redemption process that doesn’t require keeping track of promotional cards [because it can be managed through both point-of-sale and tokens released] really streamlined it, too.” The feedback from fans was just as glowing. “When you get fans with very little tech experience excited and saying they would prefer [to receive tokens in-app that they can share if they want] as opposed to getting handed a promotional card, you know there is something there, and we’re committed to continuing to find that out,” Crittenden said.
To be clear, the tokens SFA minted in 2018 were not NFTs. They were built on TRC10 tokens meant for basic transactions (think: distribution/redemption). NFTs are minted on TRC721 tokens that allow for the addition of metadata, which makes the token unique. The TRC10 tokens used in the pilot program remain live on the Tron blockchain today. But because they are not actively contracted with a program that would allow for their distribution, circulation and redemption, they are all but worthless. By contrast, the value of TRC721s is market-driven.
The fact that auction bidders went in knowing they are unable to sell the NFT today—there is currently no marketplace supporting NFTs on the Tron blockchain—seemingly impacted bid prices (the fact the Fan Block app didn’t go into public beta until after the auction closed likely didn’t help, either). But Crittenden’s company is working to change that. “It will be an insulated, curated marketplace people can trust [in app]. It’s not going to be an open marketplace,” he said. That’s an important differentiator as rights owners aren’t going to want their IP sitting alongside “questionable peripheral content that could potentially damage their brand’s credibility or any equity that has been built up [with the fan],” Crittenden added.
As conversations regarding the existence of a marketplace are “gaining traction,” so too are discussions around licensing. It remains to be determined if schools will have the rights to turn their programs’ biggest “moments” into NFTs that could produce revenue (think: March Madness upset). But even if they don’t have rights to the game footage and branding, the SFA assistant AD believes there are ways for athletic departments to get around it. “This is where the value of in-department creatives come in,” Crittenden said. “The [NFT SFA] minted was put together by in-house talent. It was not something off of ESPN3 or any other platform.”
It should be noted that the SFA Fan Block NFT auction winner has no ties to the school. “He’s a blockchain fan and an NFT fan, and wanted the first collegiate NFT,” Crittenden said.