The football trading card game Sorare NFT has entered into a multi-year licensing agreement with the Premier League.
Sorare, the $4.3 billion fantasy football game, has signed a multi-year deal with the Premier League that will see the world’s top football leagues license official player cards.
Players of the game can purchase and use NFTs officially licensed by the Premier League under the exclusive multi-year agreement.
Paris-based startup Sorare, which has 3 million users worldwide, pits people against each other in five-player fantasy soccer games. The chances of success are based on the real-time performance of the players on the pitch.
Sorare said it also introduces two new features in the game. These include the ability to compete with league-specific player cards and a “financial fair play” feature that prevents users from selecting all-star teams.
Sorare was first rumored to be in talks with the Premier League – the top flight of English men’s football leagues – over a licensing deal in October 2022. Sorare CEO Nicolas Julia said the settlement took longer than expected as the Premier League had an existing NFT licensing deal with another firm.
Sky News previously reported that the deal was valued at £30million. Julia declined to share details about the financial terms and length of the deal.
The news comes despite a sharp drop in NFT trading activity.
The values of NFTs — or non-fungible tokens — have plummeted amid a fall in crypto prices known as “crypto winter,” exacerbated by the bankruptcy of major exchange FTX in recent months.
According to data site CryptoSlam, the average selling price of an NFT in December 2022 was $143.22, down 63% from $383.73 in December 2021.
The trading volume has also decreased significantly. Total NFT revenue fell 78% in December to $678.2 million from $3.1 billion a year ago.
Julia said Sorare “turned out very differently from the rest of the room.” Total exchanges of cards on the platform totaled $500 million last year, nearly doubling from $270 million in 2021.
Still, the company has noticed a shift in usage as players tend to use the “free-to-play” mode where they don’t have to compete with paid cards.
About 87% of Sorare players “don’t even spend money on the platform,” Julia said.
That raised an obvious question about the sustainability of Sorare’s model: how does it make money when most of its users aren’t transacting?
For his part, Julia said that the high-spending power users would be enough to anchor the income generation. Sorare takes an unspecified share of all transactions through its service.
It is worth noting that Sorare is the third largest NFT collection globally according to CryptoSlam data. The firm processes around $1 million worth of transactions in 24 hours, figures from CryptoSlam show.
The Premier League’s partnership with Sorare contributes to a number of deals between sports leagues and crypto platforms.
Sorare himself has previously announced deals with Major League Baseball and the National Basketball Association.
Some deals, such as Crypto.com’s deal for the naming rights to Los Angeles’ Staples Center Arena and FTX’s now-defunct sponsorship of the Miami-Dade Arena, have stalled amid crypto prices’ plunge.
Julia said Sorare is protected from the fallout from the crash on crypto-focused sports advertising because his firm focuses on intellectual property licensing rather than sponsorships.
The French startup was last valued at $4.3 billion by investors in September 2021. Sorare is endorsed by top names including Japan’s SoftBank and venture capital firms Accel and Benchmark. Other shareholders include sports stars Lionel Messi, Serena Williams and Kylian Mbappe.
Sorare has not been without controversy and has come under fire over allegations that it encourages gambling.
The UK Gambling Commission is investigating the company “to determine whether Sorare.com requires a license to operate or whether the services it offers do not constitute gambling,” according to a notice dated October 8, 2021.
Julia said he was not yet able to provide an update on the UK inquiry process.
In November, the startup committed to making some changes to its platform after action was taken by the French national gaming regulator. This included strengthening the free-to-play elements of the game. The company has until March 31 to enforce these measures.
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