When Major League Baseball first got into NFT-based fantasy sports, it was too soon.
MLB Champions, launched in 2018 with a company called Lucid Sight, was a fantasy baseball game and marketplace for bobblehead-like NFTs that users could buy, sell, and trade to build a team. It closed two years later, after failing to gain traction.
The league is now taking another turn, with the MLB Players Association, this time via a multi-year deal with Paris-based NFT fantasy sports company Sorare. Their MLB game, which involves collecting and trading player cards backed by blockchain, will launch later this summer.
Since its debut in 2018, Sorare (pronounced “so rare”) has gained popularity in Europe for its football-based games, which allow players to buy, sell and trade NFT player cards. Sorare now covers 247 global football clubs, including Real Madrid, Liverpool Football Club and Juventus, and has signed in the German Bundesliga, Spain’s La Liga, French Ligue 1 and Major League Soccer. Valued at approximately $4.3 billion, the company raised $680 million in Series B funding in September, and its 1.7 million registered users in 184 countries have generated more than $325 million in sales. . Investors include Benchmark, Accel Partners, SoftBank, Alexis Ohanian and Gary Vaynerchuk. Sports investors include Gerard Pique and Antione Griezmann; and Serena Williams joined its board as an advisor in January.
MLB Executive Vice President of Business Development Kenny Gersh says the main difference between MLB Champions and the new Sorare game is ease of use. Back then, you had to create a crypto wallet, figure out how to buy Ethereum and how to transfer it to your wallet, and . . . by then the fun was completely sucked in for most non-enthusiastic crypto fans. “When our fans turned on the television in the 1950s, they didn’t have to figure out the technical aspects of how the game was played there. They just had to turn it on and enjoy the game” , explains Gersh. “Also, that the fan knows that it is the blockchain which makes [Sorare] possible or not, doesn’t really matter.
Sorare’s success in world football in such a short time is impressive considering how fragmented the sport is in so many different leagues and countries. Breaking into the US sports market is a whole other challenge. MLB already has a relationship with DraftKings for daily sports and fantasy betting; baseball fans can also place bets through FanDuel and other gaming companies. And then there are the emerging NFT sports collectibles platforms: Fanatics, through its NFT Candy Digital arm, makes MLB collectibles of baseball cards and games of the day. Sorare aims to provide fans and the leagues—something entirely new.
“I think we are creating a new category, so my belief is that we can grow on our own, without taking market share here and there,” says Nicolas Julia, co-founder and CEO of Sorare. “Of course, there is only a certain amount that fans are willing to spend on their passions, but we are at the intersection of different passions: collecting, showing who you are as a fan, as well as playing free to fantastic games.We bring all of these together in a single format.
For soccer, Sorare users start by collecting NFT digital playing cards from individual players to build a team. (The first player pack is free; from there, users can spend anywhere from a few dollars to hundreds of thousands on maps.) ThThey can then compete against this team twice a week in Sorare’s fantasy games, which can earn them rewards (merch, new maps, even experiences like game tickets and IRL encounters with players). Card values are not only tied to the player, but also to the rarity of the cards themselves. Every year, there are just 1,111 cards produced for every player, whether it’s Paris Saint-Germain superstar Kylian Mbappé or Colorado Rapids substitute goalkeeper. This creates value for each card over the course of the season, allowing players to buy, sell and trade their cards on the Sorare market or on third-party platforms like OpenSea. A card for Erling Haaland, Borussia Dortmund player, recently sold for over $600,000 in secondary markets, surpassing the record of $400,000 set by a Cristiano Ronaldo Sorare card last year.
Baseball, of course, is the original fantasy sport, with its stat-soaked culture and teams playing multiple times a week. “There’s a constant stream of content generated by our sport that leads to gameplay opportunities for this game,” says Gersh. “There are a lot of things you can do differently with baseball than with football, which is played much less frequently. Then in the gameplay itself, there are so many stats that baseball has a long history with. Our game really lends itself to this kind of product.
Sorare has yet to reveal how his game format will fit in MLB, nor will he share the terms of his partnership with MLB or the MLBPA. What is clear: This represents a new category of revenue for MLB and MLBPA: royalties. Similar to the licensing structure with a partner like Candy Digital, they license teams and players for a blockchain-based product, which means the royalties extend beyond the initial purchase and to each times a player card is bought and sold.
Sorare opened an office based in New York, filled with American sports veterans, like former ESPN and BetMGM manager Ryan Spoon and former DraftKings manager Michael Meltzer. Julia says the company will have an equal presence in Paris and New York by the end of this year. MLB Players Association general manager Evan Kaplan said they’ve spoken with a number of different national companies about similar NFT-based fantasy ideas, but nothing matches Sorare’s expertise. “They are well funded, they have a history of success and a unique product in the NFT category,” he says.
Even so, Sorare faces a few challenges. UK authorities are investigating whether Sorare will be considered a gambling or skill-based game, which could impact the company’s ambitions to join the English Premier League, the football league most popular in the world. And last month, two players from Ajax Amsterdam were accused of insider trading when they bought cards for Ajax’s backup keeper just days before he was set to start for a big game. Dutch football officials have concluded that playing fees do not apply to NFTs, but will consider updating their code of conduct.
Julia compares Sorare to Uber and Airbnb in that there are regulatory issues when a the company grows in a new category. He expects the UK investigation to be completed within the next few months. “Our product has nothing to do with gambling or betting because you can’t lose your card, you don’t have money in play, it’s free to play,” he says. “That being said, it’s a new market, so we have to work with them and explain to them how it works.”
Back on American soil, Julia plans to use the launch of MLB to evolve Sorare’s product offerings, which will make fan involvement easier and more affordable. He wants to develop more free-to-play fantastic games and works on ways to mix creative game modes between non-NFT and NFT free cards, as well as private leagues and game modes that would allow friends and families to play against each other. “We try to lower the barrier to entry,” says Julia. “Another thing we are working on is making the game more social. More ways for you to share your wins, share your collection, show off your fandom.
The momentum behind NFTs and crypto in general has been building for years, and baseball might just have a good time this time. Pop culture and sports are full of new brands and new players, from Bored Apes to FTX Arena. Even MLB Champions bobbleheads, though technically defunct, are reaping the benefits of blockchain, like secondary sales saw a massive increase last year.
“We’re still ahead, but it’s a tsunami to come,” says Gersh. “If we can take the passion of the NFT community and combine it with the passion that baseball fans have for their teams, there’s a lot of opportunity to bring those fandoms together.”
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