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Last year, when my colleague Christine Zhang and I began reporting on the first FT story about a little-known marketplace called NBA Top Shot, we joked it took two full-time journalists a week to wrap our heads around the idea of ​​NFTs, or non-fungible tokens. It was hard to believe that, by now, they’d become ubiquitous within the sports industry and beyond.

In this week’s Scoreboard, we take a deep dive into the way this industry has evolved in so short a time. But something else has changed, too: two years into a pandemic, it’s abundantly clear that modern life will become more and more entrenched in the digital realm. It’s evident from Microsoft‘s big bet on Activision Blizzardfrom Facebook owner Meta‘s push into NFTs, and Nike‘s acquisition of collectible platform RKFKT. In other words, the big bet is that life will be lived even more online, not less.

First up, however, we venture to the Balkans for a different kind of takeover story. Do read on – Sara Germano, US sports business correspondent

Southampton’s new owner is fighting a political battle at home

Dragan Solak (2nd from left): red and white © Peter Nicholls / Reuters

Dragan Solak is the billionaire who likes to operate outside of the limelight. He’s spent more than two decades building a media empire but it was the acquisition of an English Premier League football club that changed everything.

Through London-based investment vehicle Sport RepublicSolak bought an 80 per cent stake in Southamptona team based in the south of England, in a bet that demand for football rights will continue to rise, as online streaming platforms compete against traditional broadcasters to screen sports around the world.

“If you look at the inflation of the prices of elite sports rights,” he told Scoreboard, “I thought if it goes crazy like this I’d rather be in the sports business than in the broadcasting business.”

The Serbian-born media tycoon says he’s been fielding calls from compilers of rich lists to ascertain his net worth ever since confirmation of the acquisition, which valued the club at around £ 250m including debt.

This is far from Solak’s first encounter with the Premier League, the world’s richest domestic football division. As founder of United Groupin which he retains a minority stake, he still owns the rights to screen top-flight English football matches across much of the Balkans.

Beneath the surface, the acquisition also signals Solak’s swing from buyer of media rights to the indirect recipient of TV money paid by broadcasters.

What’s gone under the radar is that United’s grip on Premier League broadcast rights ends at the end of this season, pointing to a clash between the businessman and the president of Serbia, Aleksandar Vucic, who Solak accuses of cracking down on independent media outlets.

That’s because Serbian state broadcaster Telekom Serbia last year splashed out an estimated € 600m for the next six years, roughly ten times the annual price paid by United.

Solak’s theory is that TS is buying up sports screening rights in a political maneuver designed to lure subscribers from his independent news channels to state channels that are uncritical of the government.

TS said it did not overpay and denied it had a political motivation, adding that it “finances its deals solely from its own financial resources and capacity.”

This dispute raises uncomfortable questions for the Premier League, which was forced to part ways with former chair Gary Hoffman over its decision to approve last year’s Saudi Arabia-led takeover of Newcastle United for £ 305m, amid scrutiny of its dealings with state-backed entities.

A person close to the Premier League says it is not uncommon to see leaps in the value of broadcast deals.

For his part, Solak insists the Southampton takeover has nothing to do with his media interests, and pledged: “I do not want to abuse my position now in the Premier League.”

Profits and pitfalls of the $ 2bn sports NFT industry

Ibtihaj Muhammad: en garde, encrypted © Lucy Nicholson / Reuters

Around this time last year, the acronym “NFT” made little sense to anyone except true blockchain diehards. But it was NBA Top Shot, a then nascent venture between the National Basketball Association and Dapper Labsa platform for crypto consumer products, that brought NFTs to the mainstream.

Today, athletes from basketball star Kevin Durant to Olympic fencer Ibtihaj Muhammad have issued digital collectibles in their likeness, and sports NFTs are expected to become a $ 2bn industry in 2022, doubling in size over the past year, according to Deloitte.

Such astronomic growth has attracted equal doses of enthusiasm and skepticism about NFTs from some of sport’s top athletes and dealmakers, as we explore in depth in the latest Scoreboard movie.

As a fun exercise, it’s worth watching in tandem with another recent documentary about collectible craziness, HBO’s “Beanie Mania”. Anyone over the age of 25 likely remembers the precipitous rise – and calamitous fall – of the plush toys in the late 1990s, in part due to their reclusive manufacturer’s attempts to manipulate market supply.

So is NFT mania any different? And if so, how can savvy collectors and entrepreneurs avoid potential busts?

Consider that leagues jumping into the blockchain aren’t so much looking for quick revenue streams as much as they’re trying to identify the next big tech behemoth.

“This is the internet in 1996”, said Joe Ruggierosenior vice president of consumer products for the US National Football League. “We’m going to look back and we’re going to say, there’s some great things that have happened, and there’s some things that probably did not make sense. But the next Amazon, Google, whoever is probably out there right now starting to think about what this means for the next 10 years. ”

There are many potential NFT pitfalls, including the possibility they could be used as money-laundering instruments. Regulators are scrambling to keep up with the explosion of the crypto products. The speculative nature of an NFT’s value – collectibles have traded for millions on secondary markets – make some digital natives, like gamerssuspicious.

But for sports fans, there are now more ways to extract “real” value from a digital asset. Facebook and Instagram are preparing ways for users to create their own NFTs or display them on their profiles. Pro athletes see NFTs as a rare way to create direct relationships with their fans, in some cases incorporating privileges like meet-and-greets with sales of fan tokens.

As for what the right price for an NFT might be, there’s no straight answer. “People have to make a decision on whether they’re buying NFTs for the true love of collecting it, if they’re buying it with the idea that they want to make money on it,” he said. Rich Kleimanco-founder with Durant of Thirty-Five Ventures. “It’s what the value is to you.”


Fifa: virtually football © Mark Ralston / AFP via Getty Images

  • Electronic Artsthe maker of the Fifa football and Formula One video games, could be the next target in the $ 200bn gaming industry, argues the FT’s Lex column. Such a deal would follow Microsoft‘s $ 75bn acquisition of Activision Blizzarda move designed to propel the technology company into the metaverse, the immersive virtual worlds being built by big tech companies.

  • China is trying to forestall disruption to the Winter Olympics with tough actions that sacrifice economic growth for international prestige. Lex breaks down the economic impact to show that the Games are becoming an expensive exercise for China.

  • Tech investor and Golden State Warriors minority owner Chamath Palihapitiya came under fire this week after saying on a podcast that “nobody cares what’s happening with the Uyghurs”, drawing backlash from Republican politicians after Palihapitiya’s latest special-purpose acquisition company moved forward with acquiring a healthcare firm.

  • Lacosteone of Novak Djokovic‘s leading sponsors, intends to review the events that led to the tennis star’s deportation from Australia, highlighting the potential fallout for athletes who remain unvaccinated against Covid-19.

  • Whereas Djokovic has the financial clout to miss out on the Australian Open, being barred from competing in such a lucrative event would be debilitating for most tennis players. Dig deeper into the finances of tennis in this Scoreboard videofeaturing legendary tennis champion Billie Jean King.

  • Joe Gebbiawho co-founded home-sharing platform Airbnb in 2008, joined the investor group that owns the San Antonio Spurswith the Holt family remaining the biggest shareholder in the National Basketball Association team. Investment firm Sixth Street and computing billionaire Michael Dell are fellow shareholders following a deal last June.

Transfer Market

Serena Williams: non fungible © Gonzalo Fuentes / Reuters

  • Tennis champion Serena Williams took on an advisory role to the board of Sorare, which runs an online fantasy sports game featuring NFT collectibles. The French technology company was valued at more than $ 4bn in a fundraising led by SoftBank last year.

Final Whistle

Mark Molesley: Aldershot from the hip © @OfficialShots

Football players and managers are used to being criticized for wooden, scripted and media-managed match interviews. But every once in a while, an exception to the bore just goes for it. And thus the latest, great prematch press conference went viral, thanks to Mark Molesleythe manager of Aldershot Townwho took an unconventional approach to previewing the club’s next match, referencing penguins, bath water and “four Japanese talking dogs” in a briefcase.

He’s gone viral. Not bad for a team that plays in the fifth tier of English football. Speaking of seagulls and trawlers, Eric Cantona would be proud

Scoreboard is written by Samuel Agini, Murad Ahmed and Arash Massoudi in London, Sara Germano, James Fontanella-Khan, and Anna Nicolaou in New York, with contributions from the team that produces the Due Diligence newsletter, the FT’s global network of correspondents and data visualization team

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