The Future Of Sports Can Be Changed By NFTs, Virtual Reality, And DAOs

One of the hottest gifts in Wisconsin over the holiday season was Packers “common stock,” allowing fans who buy in to hold a small percentage of ownership in the NFL franchise. The Packers are selling 300,000 shares of the stock priced at $300 to raise money for stadium improvements at Lambeau Field and sold more than 100,000 in the first week alone. Many are skeptical of why fans are spending hundreds or thousands of dollars on shares that, by rule, cannot provide them with any financial benefit. You can find an explanation by looking at a seemingly unrelated technology: non-fungible tokens. An examination of the market for NFTs not only provides insight into the “common stock” phenomenon, but may also provide a glimpse at a different future for how we support and even participate in the decision-making process of our favorite sports teams.

Packers Stock as an NFT

The Packers ownership structure is unique in the National Football League. The NFL has rules requiring that franchises be owned by an individual or a small group of owners. The Packers have an exemption to this rule, as the team has been owned by stockholders since 1923 when it sold shares of the organization to keep the team financially solvent and located in Green Bay. Stockholders were prevented from selling their shares to anyone but the team for a fraction of the purchase price in order to prevent the team from being sold to an individual and then moved to a larger market. The Packers held similar stock sales in 1935 and 1950.

After financially stabilizing the team, further stock sales were held in 1997 and 2011 to fund additions and redevelopment to their stadium. Previous stockholders were given large splits, essentially guaranteeing that they had an outsized role in leadership decisions of the franchise.

Shares sold in 1997, 2011, and 2021 provide minimal benefits to those who purchase them. They provide a uniquely numbered ownership certificate, the ability to purchase owners-only merchandise, an invite to the annual owners meeting, and votes to decide Green Bay's board of directors and a seven-member executive committee that represents the team at league meetings. The maximum number of shares an individual can purchase is 200, and stock cannot be resold and may only be transferred to immediate family members.

Still, despite minimal benefits and the heavy restrictions, these sales have been enormously popular, with the offerings raising $24 million in 1997, $64 million in 2011, and a projected $90 million this time around. Today there are approximately 361,300 stockholders, including myself, who hold roughly 5 million shares.

So what does Packers stock have to do with NFTs?

NFTs face much of the same criticism as Packers stock. Created to provide scarcity to digital art and other online goods, the NFT market has increased rapidly in scope with many NFTs selling for millions of dollars in cryptocurrency. Many see NFTs as nothing but a scam on unsuspecting customers as NFTs provide little to no tangible benefit to those who purchase them — just like Packers stock.

But people who buy Packers stock or NFTs seem to value these commodities for the same reason. Packers fans are proud of their team's ownership structure and want to display the part they play in keeping the Packers a fan-owned team. And as Techdirt's own Mike Masnick recently noted in a podcast, owning NFTs is also a way to prove fandom. While NFTs do not grant a copyright on an image, the blockchain does provide a proof of ownership of the NFT for all to see.

Both provide a kind of status symbol of fandom for those interested in the industry to view.

While Packers stock shares traits with NFTs, it lags behind as the process of sending the stocks and verifying who owns them remains offline. Likewise NFTs have yet to contemplate what role they might play in sports beyond providing ownership of sports moments such as NBA Top Shot. The following will provide some ways in which these models might converge to bring both different experiences to fans and even provide for a decentralized governance model for sports team ownership.

Stock and NFTs as Fandom

Without a doubt, the most popular use of Packers stock isn't attending the owners meeting or voting on the future of the team; it's displaying the certificate of your share in your home or office. Many fans own stock from each of the major sales to display together and prove their extreme Packers fandom. In this way, Packers stock is most similar to NFTs, though the digital nature of NFTs lets them be displayed to the whole world rather than just those who can physically see the stock (photos posted on the internet notwithstanding).

There is no reason a marriage of the physical and digital couldn't take place with Packers stock, or other forms of fan involvement.