The Premier League and the $4.3 billion fantasy soccer game, Sorare has agreed to a multi-year agreement under which the Premier League will licence official player cards.
According to the exclusive multi-year arrangement, players of the game will be allowed to buy and utilise NFTs that have a Premier League licence.
Five-a-side fantasy football competitions are offered by the Paris-based firm Sorare, which has 3 million users globally. The players' on-field performance in the present determines the likelihood of success.
According to Sorare, the game will also introduce two new features. These consist of the capacity to engage in competition using player cards that are specific to leagues and a "financial fair play" function that prohibits users from choosing all-star teams.
The Premier League, the premier division of men's football in England, was first said to be in talks with Sorare over a licencing deal in October 2022. Because the Premier League already had an NFT licencing agreement with another company, things took longer to finish up than expected, according to Nicolas Julia, CEO of Sorare.
The sale, according to a previous report from Sky News, is for £30 million. Regarding the specifics of the deal's length and price, Julia opted not to disclose them.
Despite a significant decline in NFT trading activity, the news is released.
NFTs, or non-fungible tokens, have lost value with the "crypto winter" decline in cryptocurrency values, which has recently been made worse by the collapse of important exchange FTX.
The average selling price of an NFT in December 2022 was $143.22, down 63% from $383.73 in December 2021, according to data website CryptoSlam.
Additionally, trading volume is much decreased. From $3.1 billion in November to $678.2 million in December, overall NFT sales fell 78%.
Sorare has "trended extremely differently from the rest of the space," according to Julia. The network had $500 million in total card transactions in 2018, nearly double the $270 million in 2021.
However, the company has noted a change in usage, with players preferring to play in the "free-to-play" mode where they are not up against cards that have been purchased.
According to Julia, 87% of Sorare users "don't even spend money on the platform."
This has prompted a clear concern about the viability of Sorare's business model: how does it generate revenue when the majority of its customers aren't making purchases?
For his part, Julia said that there were enough high-spending power users to support income generation. All transactions made through Sorare's service are subject to an undisclosed fee.
It's important to note that, according to CryptoSlam data, Sorare has the third-largest NFT collection globally. Approximately $1 million worth of transactions are processed by the company every day, according to CryptoSlam's data.
The Premier League's collaboration with Sorare is the latest in a string of agreements between sports leagues and cryptocurrency exchanges.
Deals with the National Basketball Association and Major League Baseball have already been made public by Sorare.
Some agreements have soured in the wake of the decline in cryptocurrency prices, like the one between Crypto.com and Staples Center in Los Angeles for naming rights, and the now-defunct sponsorship of the Miami-Dade Arena by FTX.
Julia claimed that because Sorare's company focuses on intellectual property licencing rather than sponsorships, he was shielded from the effects of the crash on crypto-focused sports advertising.
Investors last assigned a value of $4.3 billion to the French business in September 2021. Top names like Japan's SoftBank and venture capital firms Accel and Benchmark support Sorare. Sporting greats Kylian Mbappe, Serena Williams, and Lionel Messi are also stockholders.
Sorare has not been without controversy, as it has drawn criticism for allegedly promoting gambling.
According to a notice dated October 8, 2021, the U.K. Gaming Commission is looking into the company "to determine whether Sorare.com requires an operational licence or whether the services it provides do not constitute gambling."
He couldn't yet provide an update on the U.K. inquiry's progress, according to Julia.
The business agreed in November to make several platform adjustments in response to the French National Gambling Authority's intervention. These included enhancing the game's free-to-play components. By March 31st, the corporation must implement these measures.
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