The National Football League, in a memo issued Tuesday, granted teams limited permission to seek blockchain sponsorships, a partial reversal from late last summer, as the technology grows in popularity among the organization’s fans and athletes.
The league said it made the decision to allow “promotional relationships without undertaking excessive regulator or brand risk” after it completed an evaluation of the technology. The permissions, which are subject to the NFL’s approval, exclude stadium signage. For now, restrictions remain in place for specific cryptocurrencies and fan tokens, which can be exchanged for merchandise and experiences.
“Clubs will continue to be prohibited from directly promoting cryptocurrency,” the memo reads.
The NFL’s decision also comes after its recent lobbying push related to blockchain. CNBC reported in February that the NFL lobbied the Securities and Exchange Commission on “issues related to blockchain technology” from July through December 2021. The NFL also lobbied the White House Office and the Departments of Justice and Commerce.
“In this evolving regulatory environment, it remains essential that we proceed carefully when evaluating potential commercial opportunities involving blockchain technologies, and conduct appropriate diligence on all potential partners and their business models,” the memo reads.
The memo comes days ahead of the NFL’s annual meetings, which start Saturday in Florida. The league will update team owners on business initiatives, including the revised blockchain guidelines. It’s the first time the league will hold the meetings in person since 2019 due to the pandemic.
CNBC obtained a copy of the memo issued by NFL chief revenue officer Renie Anderson and chief media business officer Brian Rolapp. The update comes after the NFL and the players union stuck a deal with blockchain company Dapper Labs to produce video collectibles. Panini has the league’s NFT trading card rights. In addition, the NFL approved media partners to allow blockchain advertisements during its games for the first time during the 2021 season.
Joe Ruggiero, the NFL’s head of consumer products, told CNBC the team deals with blockchain companies will not exceed three years, “so that it gives us flexibility for the long-term.” Ruggiero added the NFL could put its official blockchain rights on the marketplace, too.
It’s unclear how much the NFL would seek. CNBC previously reported that the National Basketball Association struck a deal with Coinbase worth $192 million over four years. Likewise, cryptocurrency platform FTX’s $10 million deal with the NBA’s Golden State Warriors could be a blueprint for potential deals between blockchain-linked companies and NFL teams under the newly issued guidance.
“We’re extremely bullish on blockchain technology,” Ruggiero said. “We think that it has a lot of potential to really shape innovation, shape fan engagement over the course of the coming decade.”
Blockchain tech serves as digital ledgers similar and is used for cryptocurrencies like bitcoin. It also effectively gives virtual collectibles like nonfungible tokens, or NFTs, unique and non-hackable certificates of authenticity. Tuesday’s memo also granted teams limited permissions on NFTs.
“Subject to League approval, Clubs may now accept advertising (without use of club marks and logos, unless in connection with a League NFT deal) for NFTs and NFT companies,” the memo reads. Yet the league will continue to prohibit teams from “engaging in product licensing arrangements or sponsorships for NFTs or NFT companies (other than as permitted in connection with League-level NFT partnerships),” it adds.
NFL stars such as Tom Brady and Rob Gronkowski have capitalized from the blockchain marketplace with NFT deals. Brady’s NFT platform, Autograph, raised $170 million in January, according to Bloomberg.
E-commerce giant Fanatics – which the NFL co-owns -invested in NFT company Candy Digital. That firm launched in 2021 and locked up Major League Baseball NFT rights. In October, CNBC reported Candy Digital is valued at $1.5 billion after a raise from investors, including NFL legend Peyton Manning.
Ruggiero said the NFL would continue to evaluate its remaining restrictions on blockchain-related technologies.
“Everything is changing so quickly – we all have to be looking at the next areas of innovation,” he said. “So, we’re spending a lot of time looking at where the future might go.”