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Introduction 🔌🔧

The Web3 market crash has seen sports sponsorships for the most part slow down, and NFT sales follow a similar trajectory.

But one sport that isn’t slowing down at the same rate is Formula 1.

McLaren recently launched ‘McLaren Moments’ which sold out. Which is impressive in this market.

With this in mind, I thought it’d be great to examine their Web3 journey, and why it’s been successful to date.

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McLaren Racing's Web3 Strategy

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Formula 1 has seen incredible overlap with Web3.

Whether it be sponsorship, from blockchains themselves or exchanges, or NFT drops with famous artists — F1 has seen it all.

And it might just be the perfect mix, as the sport and the technology are both on the rise simultaneously.

F1 is seeing a rapid increase in audience growth and also a lowering of average age when it comes to the demographic:

1. Audience growth: Formula 1's total global TV cumulative audience reached 1.922 billion in 2019, the highest since 2012, representing a 9% increase compared to 2018, and in the US, average viewership per race increased from 547,722 in 2018 to 1,400,000 in 2022

2. Age demographics: The average age of Formula 1 fans has decreased over the years. According to the 2021 Global Fan Survey, the average age of respondents was 32 years, with 62.9% in the age range of 16-34. This is a significant change compared to the 2017 survey, where the average age was 36 years. In the US, the percentage of viewers aged 18-49 increased from 30% in 2017 to 36% in 2021. The 2022 season saw a 29% increase in viewers between the ages of 18 and 49.

Before you read on, I promise, this is not another angle on how Drive To Survive has reinvigorated F1 and why every sport should do the same…

In this newsletter, I discuss:

🏎️ McLaren’s Web3 Journey🌎 Their free drop strategy🏷️Their latest drop

🏎️ McLaren’s Web3 Journey

McLaren Racing have had an extensive Web3 journey spanning multiple years, partnerships and NFT drops.

They are partnered with leading crypto exchange OKX as well as one of the biggest blockchains out there, Tezos.

On the NFT front, chronologically, this is what their journey has looked like:

• October 2021: They launched McLaren Racing Collective — a platform on Tezos where McLaren fans could purchase NFTs. The first 5,000 fans who joined the collective platform got free digital assets. From there, fans were able to purchase one or multiple components as they release in an effort to collect all 22 to assemble the full digital MCL35M race car.

• December 2021: McLaren launched ‘driver cards’ on Sweet.io — cards that represent a season from a specific driver.

• July 2022: Sweet NFTs at the British Grand Prix. This drop included three NFTs - a racing helmet, racing suit, and race boots - released over the course of the British Grand Prix weekend. Fans who collected all three NFTs unlocked a "master NFT" and earned a spot on a virtual call with a McLaren F1 driver.

• July 2022: McLaren Shadow Livery MCL36 is launched — McLaren Shadow is their virtual racing programme that shadows their real-world equivalent. This digital collectable marked both the McLaren Shadow esports team’s and the MCL36’s debut on the blockchain.

• October 2022: McLaren Racing partnered with Sweet.io to release a manga-inspired NFT series in celebration of two crucial Formula 1 racing events: the Singapore Grand Prix and the Japanese Grand Prix

• March 2023: For the 22/23 season, at every grand prix, fans have been able to claim a free NFT.

• July 2023: McLaren Moments launches (More on this further down the newsletter!)

The drops and partnerships have seen varying degrees of success, and have been at a higher frequency than most sports teams on average, but the real success McLaren has seen is in selling nothing.

Their free drops are called The 22/23 digital collectables. 

🌎 Their free drop strategy

The real magic in McLaren’s NFT strategy so far has been their free NFT drops.

The claims happen over 4-day periods, from Friday - Monday over the course of a weekend that corresponds with a specific Grand Prix in the 2023 season.

The NFTs are colourful digital posters.

And they’ve been a huge success.

The data is pretty staggering considering the broader demand for digital assets from retail.

Since the start of the 2023 season, fans have claimed 2.1m free NFTs.

These 2.1m NFTs have come from 574.5k unique wallets.

And there are some quirky perks for claiming. Users that hold these in their wallet will have the opportunity to enter into an end-of-season draw with the chance to win one of the following rewards:

• 2x places for the holder and a guest at a race experience in 2024.

• A race collectable as a 1 of 1 physical poster, signed by a McLaren Formula 1 Team driver (a total of 23 available).

• A virtual meet & greet with McLaren Racing CEO, Zak Brown (a total of 23 spaces available).

• Claim all 23/23 Collectibles to be in with a chance to receive a race experience in 2024 or a physical 1/1 signed race collectible and join a virtual meet & greet with McLaren Racing CEO, Zak Brown.

• Opportunities to also collect one of the smaller collections to be in with the chance to receive exclusive McLaren F1 merchandise and other rewards.

The flow is super simple - users sign up and claim an NFT - with little fuss.

There’s no complex crypto jargon or complex drop mechanic, just a simple sign-up and claim process.McLaren’s success with their free NFT has continued off-chain. 

They have seen a huge volume of new sign-ups to McLaren Plus, attributed directly from free NFT holders. McLaren Plus is their free-to-join fan engagement programme.

They’ve also accumulated a huge audience on Discord, with 40k+ members in their server, with thousands online at any given time. They’re not vanity metrics either, their announcements, which are fairly frequent in the server, regularly see ‘reacts’ and engagement from hundreds of members.

For Tezos, it looks like they’ll be happy with the outlay required to become McLaren’s official blockchain of choice.

If you look at the spikes in user activity on the Tezos blockchain and overlay them with Grand Prixs in the 2023 season, there’s an unsurprising trend.

There is a spike at each Grand Prix over the last 3 months, with the Austria Grand Prix corresponding to the highest daily average users on the Tezos network.

And, of course, we can’t attribute every active user on the network when it spikes with a Grand Prix, but it’s a good trend to see if you’re Tezos.

A blockchain’s marketing budget is about two things

1. Make sure people know who we are

2. Get people to use your blockchain 

It’s a surprise that more blockchains haven’t pushed to spend money with IP which isn’t the ‘biggest’ in sport but has a growing and sticky audience.

On the sports brand side, it’s also a surprise to me, that haven’t pushed in this more ‘free’ engagement model.

Manchester United and McLaren Racing have seen great success with their free drops in the past, and likewise 100Thieves, Paris Basketball and Reddit.

🏷️Their latest drop

In celebration of their 60th anniversary, McLaren Racing launched ‘McLaren Moments’.

It’s the first time they used their heritage IP, celebrating moments from the team’s history over the past 60 years.

McLaren sold out all 3,525 packs of 3 tokens that were priced at £5 ($6) per pack.

The sale started on Tuesday 25th July at 10 am UK time and sold out 6 days into the 11-day sale period on Monday August 1st 2023. 

50% of the sales happened in the first 24 hours of launch.

The secondary market has seen 14.51k XTZ (the Tezos native token) — which equates to just over $11,000. 

The highest secondary market sale so far was 700 XTZ (~$550) for an Ultra Rare Bruce McLaren token

Selling ‘moments’ for sports IP isn’t as easy now as it was during the peak of the hype cycle.

As we saw a few weeks, ago, OneFootball shuttered AERA — their Web3 platform that hosted the sales of Serie A soccer NFT moments — it’s clear that even the biggest sports brands/teams/leagues struggle when it comes to selling ‘moments’ or historic IP as NFTs.

So selling 3000+ of these, no matter the price, should be seen as a success.

🧠 Concluding Thoughts

McLaren Racing have probably engaged in too many NFT drops.

But to their credit, they’ve found a way to engage their audience over a long period of time and also created a way for fans to be engaged in a free way that they enjoy.

I’ve said for a long time that sports teams and leagues would be better off starting with free drops. 

And there’s a multitude of reasons for this.

One of these is the fact that simply selling your IP as NFTs, without a place for fans to actually do anything with it, is a bad, unsustainable strategy.

The short-lived, speculative nature of selling a lot of NFTs for a lot of money from sports brands is over.

The 90/10 split between speculation and collectability have swung the other way.

We’re now in a paradigm where you can only be reliant on 5/10% of your audience being speculators or there is no sustainability in your offering.

As I mentioned in my State of the Web3 & Sports market report a couple of weeks ago, it’s the equivalent of buying sofas without having a home.

And whilst McLaren don’t have an application or dashboard that aggregates everything they’ve ever done in one centralised place — they do have the following:

• A Discord server that they funnel holders into - allows NFT holders and fans to interact with members of the team and other fans. It’s the ‘many to many’ form of communication that is stuttering a little bit as social media goes through what many marketing strategists are calling a bit of a ‘moment’.

• McLaren Plus: a ‘superfan’ app that has seen high sign-up volumes directly attributed to free NFT holders.

So whilst there isn’t a broader place to ‘house’ all of what they've created, having the Discord for community and McLaren Plus as another tangible place for superfans to get ‘more’ from their team makes a lot of sense.

Whilst we do see Twitter, or sorry, X, go through a phase that every social strategist is describing as a wobble (I’ve avoided the more coarse language I’ve seen) — and Mark Zuckerberg seemingly being more interested in losing the race for the Metaverse than building out decent social platforms — it’s pretty clear that being reliant on these funnels is a lot more difficult now than it was 5-10 years ago.

With Sporting Crypto, I can lift and shift my newsletter audience anywhere I want if I’m no longer happy with Substack, my provider.

With X, Instagram, Threads, Facebook or any other social platform — the hamster wheel is in full effect and we’re all just trying to adjust and tweak whenever there’s a slight change in the wind from the algorithms.

Whilst I don’t think Discord is for all sports teams or leagues, perhaps we are seeing a shift in mentality from those in the sports industry to try and evolve beyond just posting content on social media, and hoping it works. Because as we’ve seen, one change in how that platform’s algorithm works and all of a sudden the money you’ve spent creating that content goes to waste because you can’t distribute how you wanted to previously.

Blockchains can play a part here.

Because having an on-chain network of fans should not be understated, at all.

In this example, McLaren have got over half a million fans on chain. That’s nothing to sniff at.

Of those, they can see that X% of those fans love McLaren enough to sign up for McLaren Plus.

And they can see that Y% are happy to pay for digital merchandise.

And they can see Z% are happy to pay money for physical merchandise via a token-gated discounted link.

You can see how this could be very powerful for a brand.

💡🎙️ Sporting Crypto Spotlight - Podcast W/ Mark Epps

In Episode 1 I was joined by Mark Epps, Director of Comms & Web3 at the ATP Tour to talk about the future of Web3 at the ATP Tour. Watch below! 👇

👇 If you prefer to download and listen on the go - you can do so via your favourite podcast player using the button below! 👇

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More Sports & Web3 Stories

• NHL Breakaway relaunched their inaugural drop — and this time it sold out with no hitches (Read more here)

• Sorare have launched their cash wallet, meaning users can play the game without needing to interact with Crypto (Read more here)

• Red Bull Racing’s Velocity Pass sold out, 990 NFTs selling for 0.3 ETH each ($550) (Read more here)

• Hurley Dives into the NFT World with Super Surfer Game (Reade more here)

• LinksDAO has released new membership tiers between $99 and $1499 per year (Read more here)

• A report by Deloitte — 2023 sports fan insights: The beginning of the immersive sports era 2023 sports fan insights: The beginning of the immersive sports era (Read more here)

• The first minch launches Media Pass, Season 1 (Read more here)

• Karate Combat saw 10x growth in their Up Only Gaming model between event 39 and 40 (Read more here)

• More details have been released regarding Patrick Mahomes’ Museum of Mahomes II — a digital collectibles launch (Read more here)

• Once Barnsley FC and current Dorking Wanderers Sponsors HEX are alleged to be unregistered securities by the SEC (Read more here) 

General ‘Stuff’ that Could Impact You

• The headline of the week — PayPal launches a stablecoin issued on Ethereum (Read more here)

• A great read by Simon Taylor: Worldcoin and The Future of Identity (Read more here)

• Improbable partnered with game4Ukraine, hosting a watch party in the Metaverse (Read more here)

• Reddit have now had almost 20m Avatars minted from almost 16m unique wallets (Read more here)

• Bitwise, ProShares filings cap off week laden with ETH-related ETF proposals (Read more here)

• There might be something in this decentralisation thing…Elon Musk takes over ‘valuable’ @x Twitter username – without paying (Read more here)

• Legacy NFT marketplace Nifty’s is shutting down (Read more here)

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