The first time Major League Baseball jumped into NFT-based fantasy sports, it was too early.
MLB Champions, launched in 2018 with a company called Lucid Sight, was a fantasy baseball-like game and marketplace for bobblehead-looking NFTs that users could buy, sell, and trade to build a team roster. It shut down two years later, after failing to gain traction.
The league is now taking another swing, along with the MLB Players Association, this time via a multiyear deal with Sorare, the Paris-based NFT fantasy sports company. Their MLB game, which involves collecting and trading blockchain-backed cards of players, will launch later this summer.
Since its 2018 debut, Sorare (pronounced “so rare”) has gained popularity in Europe for its soccer-based games, which allow players to buy, sell, and trade NFT player cards. Sorare now covers 247 global football clubs, including Real Madrid, Liverpool Football Club, and Juventus, and has signed on the leagues Germany’s Bundesliga, La Liga in Spain, France’s Ligue 1, and Major League Soccer. Valued at about $4.3 billion, the company raised a $680 million Series B funding in September, and its 1.7 million registered users across 184 countries have generated more than $325 million in sales. Investors include Benchmark, Accel Partners, SoftBank, Alexis Ohanian, and Gary Vaynerchuk. Athlete investors include Gerard Pique and Antione Griezmann; and Serena Williams joined as an advisor to its board of directors in January.
MLB executive vice president of business development Kenny Gersh says that the key difference between MLB Champions and the new Sorare game is the ease of use. Back then, you had to set up a crypto wallet, figure out how to buy Ethereum and how to transfer it to your wallet, and . . . by then the fun was all sucked out of it for most non-crypto-enthusiast fans. “When our fans were turning on the TV in the 1950s, they didn’t have to understand the technical aspects of how the game got on there. They just had to turn it on and enjoy the game,” says Gersh. “Similarly, whether the fan knows that it’s the blockchain that makes [Sorare] possible or not, isn’t really important.”
Sorare’s success in global soccer over such a short time is impressive given the sport’s fragmentation across so many different leagues and countries. Jumping into the American sports market is an entirely different challenge. MLB already has a relationship with DraftKings for daily fantasy- and sport- betting; baseball fans can also place bets through FanDuel and other gaming companies. And then, there are the emerging NFT sports collectibles platforms: Fanatics, through its NFT arm Candy Digital, makes MLB collectibles of baseball cards and plays of the day. Sorare is aiming to offer fans—and leagues—something entirely new.
“I think we’re creating a new category, so my is that we can grow on our own, not taking market share from here and there,” says Sorare cofounder and CEO Nicolas Julia. “Of course, there is only a certain amount that fans are willing to spend on their passions, but we are at the intersection of different passions: collecting, showing who you are as a fan, as well as free to play fantasy games. We’re bringing all of these elements into a unique format.”
For soccer, Sorare users start by collecting NFT digital playing cards of individual players to build a team. (The first pack of players is free; from there, users can spend from a few dollars to hundreds of thousands for cards.) They can then play that team twice a week in Sorare’s fantasy games, which can earn them rewards (merch, new cards, even experiences like game tickets and IRL meetings with players). Card values aren’t only just tied to the player, but also to the scarcity of the cards themselves. Each year, there are just 1,111 cards produced for each player, whether it’s Paris Saint-Germain superstar Kylian Mbappé or the backup goalie for the Colorado Rapids. This creates value for each card as a season goes on, allowing players to buy, sell, and trade their cards on Sorare’s marketplace or third-party platforms like OpenSea. A card for Erling Haaland, a player with Borussia Dortmund, recently sold for more than $600,000 on the secondary markets, topping the $400,000 record set by a Cristiano Ronaldo Sorare card last year.
Baseball, of course, is the original fantasy sport, with its stats-drenched culture and teams that play multiple times per week. “There’s a constant stream of content being generated by our sport that leads to gameplay opportunities for this game,” says Gersh. “There are a lot of things you can do differently with baseball than soccer, which is played much less frequently. Then, within the gameplay itself, there are so many stats, which baseball has a long history with. Our game really lends itself to this kind of product.”
Sorare hasn’t yet disclosed how its playing format will be adapted to MLB, nor will it share the terms of its partnership with either MLB or MLBPA. What is clear: This represents a new revenue category for both MLB and MLBPA: royalties. Similar to the licensing structure with a partner like Candy Digital, they’re licensing teams and players to a blockchain-based product, meaning royalties extend beyond initial purchase and into every single time a player card is bought and sold.
Sorare has opened a New York City-based office, stocked with US sports-business vets, like former ESPN and BetMGM exec Ryan Spoon and former DraftKings exec Michael Meltzer. Julia says that the company will have equal presence in Paris and New York by the end of this year. MLB Players Association managing director Evan Kaplan says that they had been talking to a number of different domestic companies about similar NFT-based fantasy ideas, but nothing matched Sorare’s expertise. “They’re well-funded, they have a history of success, and a unique product in the NFT category,” he says.
Even so, Sorare is facing a few challenges. UK authorities are which could an investigation into whether Sorare will be considered gambling a skills-based game, impact the company’s to sign up the English Premier League, the world’s most popular soccer league. And last month, two Amsterdam Ajax players were accused of insider trading when they bought cards for Ajax backup goaltender just days before he was named the starter for a big game. Dutch soccer officials concluded gambling charges don’t apply to NFTs, but are reportedly considering updating their code of conduct.
Julia compares Sorare to Uber and Airbnb in that there are inherent regulatory questions when a company pushes into a new category. He expects the UK inquiry to wrap up in the next few months. “Our product has nothing to do with gambling or betting because you cannot lose your card, you don’t have money at stake, the game is free to enter,” he says. “That being said, it is a new market, so we do have to work with them and explain how it works.”
Back on US soil, Julia plans to use the MLB launch to evolve Sorare’s product offerings, making it easier and more affordable for fans to get involved. He wants to develop more free-to-play fantasy games and is working on ways to mix creative game modes between the non-NFT free cards and the NFTs, as well as private leagues and game modes that would allow friends and families to play against one another. “We’re trying to lower the barrier to entry,” says Julia. “Another thing we’re working on is making the game more social. More ways for you to share your wins, to share your collection, to show off your fandom.”
The momentum behind NFTs and crypto in general has been building for years, and baseball just may have the timing right this time. Pop and sports culture is awash in new brands and players, from Bored Apes to FTX Arena. Even MLB Champions bobbleheads, while technically defunct, are enjoying blockchain benefits, as secondary sales saw a massive boost last year.
“We’re still early, but it’s an coming tsunami,” says Gersh. “If we can take the passion in the NFT community, and bring it together with the passion baseball fans have for their teams, there’s a lot of opportunity to bring those fandoms together.”