We welcome 23 new subscribers to the Sporting Crypto Newsletter who have joined us over the last week!

Join 1708 readers who are interested in exploring where Sports meets Crypto. If you're reading this and still haven't signed up, click the 'Subscribe' button below to join sports industry leaders and fans learning about Web3!

If you’re already subbed - thank you very much. Please be sure to share the newsletter with your friends and colleagues!

Intro Notes, Plugs & Amendments 🔌🔧

This edition of Sporting Crypto is brought to you by Momento Market - Football’s auction house. Now it's finally launched, the app lets you bid on live, in-game auctions for the match-worn shirts of some of the sport’s biggest clubs and explore the shirt collections of the best players around.

Download and use the code ‘SportingCrypto’ to skip the waitlist.

A lot of articles have come recently discussing the amount of money Nike have made from NFTs.Not many broke down on how they actually did it.

And not many at all many broke down what RTFKT have done to this point, and why Nike’s acquisition was such a masterstroke.

Hopefully, I can do that now on this latest edition of Sporting Crypto.

🔌 If you’d like to work together in a consultancy or workshop capacity, please respond to this email!

🔌 We have sponsor slots available from September 12th onwards for Sporting Crypto. If you’d like to partner, reach out on Twitter or LinkedIn, or email me back at this address!

🔌 If you would like me to come to an event and speak about Sports & Crypto / NFTs, please reach out on the above platforms or reply to this email.

🔌 I was on the Unofficial Partner podcast this week! Check it out :)

This Week’s Deep Dive: Nike make $185 million from NFTs

The NFT bubble has popped. You only have to look at the volumes to know this is true.

But regardless of the bubble popping — I can tell you for certain — NFTs are still a HUGE talking point at almost every consumer facing company.

CMOs and strategy directors will be asked in boardrooms; what is our Web3 strategy?

Whilst some will claim Web3 is a fad the writing is already on the wall when it comes to the future consumer.

Let’s look at some of the writing on that wall.

As per the drum, 7 million people have already visited Nike’s metaverse store, Nikeland, in the virtual world Roblox.

Travis Scott’s concert on Fortnite in April 2020 was watched by 12.3m people according to Statista. And for those screaming “but everyone was inside!” — Feb 2019 saw Mashmello’s concert watched by over 10.5m people, and the ‘destruction of the purple cube’ event in Nov 2018 was watched by 8.3m. 

These are clues to where we’re heading.

Brands definitely pay attention to eye-watering numbers like the above.

But when dollars are at large, the eyes start not to simply water — but to pop out of one’s head.

The NFL in collab with Fortnite sold $50m worth of NFL branded skins.

With NFTs, there’s an acceptance that whilst the tech is still janky and early — the earning potential could be larger due to scarcity, secondary sales and the actual use and functionality of these tokens.

Brands have already entered this world with varying levels of success.

Some have done incredibly well and some have bombed.

And now thanks to Noah Levine — we know how well some of these brands have done from a monetary perspective.

Top of the charts?

Nike. 

And they’ve done this through their acquisition of RTFKT.

If you don’t know who they are — RTFKT are an NFT studio. A very successful one.

They were acquired by Nike in late 2021.

I wrote this 4 months ago, on LinkedIn, on why Nike acquired them:

That last statement in bold— caused some controversy.

“RTFKT isn’t a platform, how can it be as important?!”How? 

Well — Nike have future proofed their business in a way that is completely isolated from their current supply chain.

And when it’s plugged into that chain, makes cool new things happen.

This isn’t an ‘I was right and RTKFT was the best acquisition ever’But this $185m resembles 1% of Nike’s revenue.

6 months after the acquisition of RTFKT. 

That’s some return so far.

The Numbers

Looking at the numbers since December 2021, when RTFKT were acquired by Nike, we can see that royalties generated are still from NFTs created before Nike were involved.

This is definitely a salient point because CLONEX accounts for ~$40m of those secondary market royalties.

But the superpower when it comes to Web3 assets is that revenues do not stop at the point of sale.

They don’t stop, period. 

Not only was the IP acquired, but so are the royalties in perpetuity.

The stats show that since the takeover — Nike’s primary sales revenue has been $93.1m with their royalties hitting $90.1m, giving them a total NFT revenue of $183.73m.

Doubling your revenue due to secondary market royalties is pretty amazing for any creator, but has only really been seen in NFTs.

That superpower works just as well for an independent artist, but also for a household name like Nike.

With NFT volumes dropping sharply, it’s no surprise to see that even Nike & RTFKT’s secondary market revenue has dipped to the low millions of late.

But even those low millions are impressive. 

Remember this is revenue that Nike receives simply from the trading of digital assets. Not by creating new ones.

That very dimension is what has most brands so interested. A new primary revenue stream but also one that makes you money, in theory, forever — if the product has demand. And your encouragement when it comes to that demand becomes your strategy. This lessens the need for constant new product creation, such as we’ve become accustomed to in pretty much every industry.

The Perfect Match

Acquiring a company just for some secondary market revenue from digital products they created that have nothing to do with your brand won’t work.

This is why Nike x RTFKT was such a match made in heaven.

Nike acquired a company that had a similar vision as them, with similar energy and values — just in another dimension. The digital one.

And now, when RTKFT are able to leverage Nike’s IP and resources — that plug in is almost seamless.

A perfect example is their AR hoodie - bridging the gap between the physical and digital parts of the brand. I wrote about it here — but essentially RTFKT created a Nike x RTFKT hoodie, which had an AR chip in it, linked to the NFT — that allowed users to augment the hoodie with filters in real life.

It’s definitely on the bleeding edge, to say the least. 

RTFKT have struck that balance between being on the absolute bleeding edge and making a lot of money to a fairly sizeable consumer base.

In fact, they’ve had about 30.8k distinct or new buyers since the turn of the year.

This doesn’t feel like a lot, at all. But 30,000 new customers buying digital assets that you’ve cobranded in 6 months is pretty significant.

This is a portion of their future consumer base.

It also speaks to the type of customer that they’re attracting.

The high ticket item chasing customer base with high amounts of expendable income. They’re the digital equivalent of the sneakerhead generation, to some extent.

RTFKT x Nike are a match made in heaven. It’s something I’ve been saying since the acquisition took place.

And now 6 months on, we can see that this partnership has been wildly successful — but incredibly enough is only at the very start of a multi year journey which will no doubt 1) continue to play at the cutting edge whilst 2) create more and more mass market offerings whilst 3) generating high ticket activity and digital asset offerings that make them money.

It’s the perfect blend of technical expertise, immersive design, innovation, vibes and commercial ingenuinity.

Nike have hit the sweet spot. 

They’re most certainly going to have a big impact on the intersection between sport, fashion and Web3.

More sports crypto stories & things to put your radar

• Awesome Dune analytics dashboard here by Noah Levine showcasing how much money brands have made from NFTs.

• Dallas Cowboys Quarterback Dak Prescot has signed a multiyear deal with Blockchain.com

• RTFKT (as mentioned in the deep dive) continue to crush it

Great reads, great tweeting and more general ‘stuff’ that could impact you

• NFTs aren’t going anywhere, it seems.

• Limit break have raised a two hundred million dollar fund

• There’s before NFTs and then after NFTs. 

• This is a really excellent example of a brand using NFTs to drive traffic.

• There are no products in Crypto that make life easier for the consumer and *have* to use Crypto.

• Thirdweb have raised a $24m Series A

Thanks for reading the latest edition of the Sporting Crypto newsletter. I’m really happy to see so many people enjoying it and sharing it with their networks. If you enjoyed this, please tell your friends who might be interested - and share it on social :)

This newsletter is for informational purposes only and is not financial or business advice.These are my thoughts & opinions and do not represent the opinions of any other person, business or entity.