Soccer players keep promoting NFT collections - and they keep crashing to zero
- Liverpool FC launched a series of NFTs two months ago and 90% went unsold.
- Soccer players Paul Pogba and John Terry also endorsed projects that flopped amid the crypto sell-off.
In March, English soccer powerhouse and UEFA Champions League finalists Liverpool FC launched "LFC Heroes Club" — a collection of 24 non-fungible tokens illustrating high-profile players.
90% went unsold.
An NFT is a unique blockchain identifier that proves ownership of a piece of digital art. The NFT market surged to $41 billion last year, with traditional auction houses like Christie's and Sotheby's entering the sector.
But while crypto posted spectacular gains last year, it has plummeted dramatically in 2022. Bitcoin and ethereum are down 38% and 52% year-to-date, respectively.
Most NFTs run on the ethereum blockchain, meaning they are valued in ether, rather than dollars. Crypto's struggles have wiped a significant amount of value off the overall market, which makes it tough to sell them to soccer fans.
"If a massive club like Liverpool can't sell NFTs, that's indicative of fans' overall skepticism," Kieran Maguire, an academic specializing in the accountancy of soccer teams, told Insider in a recent interview. "[Soccer] is being used to legitimize NFTs and market them as an investable asset, and that's a cause for concern."
Liverpool were the first soccer club to launch their own NFT collection - following in the footsteps of major brands including Adidas, Nike, and Playboy. They collaborated with Sotheby's to start "Heroes Club".
But the initiative was roundly condemned by Liverpool fans, many of whom argued that selling NFTs is exploitative.
Liverpool's failure to shift 90% of its NFTs may deter other clubs from releasing their own collections. But several high-profile players have already endorsed digital art, with similarly disastrous results.
In November, Manchester United and France midfielder Paul Pogba promoted the CryptoDragons collection to his 10 million Twitter followers, saying he had bought his first ever NFT, "an egg with a dragon inside".
One of the digital assets sold for 35 ETH, or $162,000, according to Pogba. Six months later, CryptoDragons sell on OpenSea for as little as 0.018 ETH, or $32.
Pogba isn't the only Premier League player to have promoted an NFT collection that subsequently flopped.
Former Chelsea captain John Terry's "Ape Kids Football Club" NFT collection crashed 90% in a single month, and individual "Ape Kids" can now be bought for $0.019 ETH, or $34, on OpenSea.
Michael Owen, who played for Liverpool, Real Madrid, and Manchester United and is now a prominent commentator on British TV, launched his own NFT collection in May, claiming his "NFTs will be the first ever that can't lose their initial value".
Owen's NFTs have a floor price encoded in their blockchain, which means that they can't be sold below the price they were bought for. This doesn't prevent the NFTs from crashing to $0, but it would stop investors from selling at a lower level to reduce their losses.
Pogba, Terry, and Owen aren't financial advisors, but they, and Liverpool FC, have promoted NFTs as if they were sound, investable assets.
"It's the job of [soccer] players to play [soccer]," Simon Chadwick, a professor at France's Emlyon Business School, told Insider. "We shouldn't expect them to be preoccupied with metaverse regulation or a potential crypto crash."
"But some players may be too quick to sign such deals and insufficiently question the issues surrounding NFTs," he added. "All involved need to up their games."