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The NFL Continues to Warm Up to Cryptocurrencies

In a memo this week, the NFL granted limited permission to teams to seek blockchain sponsorships. This is a partial reverse from last summer as the technology gains popularity among athletes and fans. However, clubs will continue being prohibited from directly promoting cryptocurrency. Still, it’s a step forward, as blockchain technology can protect the data tied to betting options like NFL lines and Kentucky Derby odds.

After evaluating the technology, the league stated that it decided to allow promotional relations without taking excessive regulator or brand risks. The NFL must approve the updated team guidelines and they do not include stadium signage. For now, there are restrictions on certain cryptocurrencies and fan tokens that can be exchanged to purchase merchandise or experiences.

NFL Advances Crypto Policy

After its recent lobbying efforts related to blockchain, the NFL has taken the decision. The league had lobbied for the Securities and Exchange Commission from July to December 2021 on “issues related blockchain technology.” The NFL also lobbied the White House and Departments of Justice and Commerce.

The memo the NFL issued states that the evolving regulatory environment makes it essential to proceed carefully when evaluating potential business opportunities involving blockchain technologies, and conduct appropriate diligence upon all potential partners and the models of their businesses.

Clubs may sign sponsors for crypto exchanges, wallets or payment processors. Clubs cannot promote cryptocurrency directly. These designations should not include the words “crypto” and “cryptocurrency” but instead, use terminology like digital currency. This restriction was put in place to ensure that the NFL is not distracted by illegal activities and cryptocurrencies.

This memo is coming days before the NFL’s annual meetings, which begin Saturday in Florida. The league will provide updates to team owners about business initiatives, including the updated blockchain guidelines. The meeting will be the first to be held in person by the NFL since 2019, following the COVID-19 pandemic.

NFL Also Exploring NFTs

This update is coming after the NFL and players union reached a deal to produce video collectibles with blockchain company Dapper Labs. Panini holds the rights to NFT (non-fungible token) trading cards for the league. The NFL previously approved media partners to allow blockchain ads during NFL games starting in 2021.

NFL Head of Consumer Products Joe Ruggiero said that the team deals with blockchain companies can’t exceed three years. Ruggiero also suggested that the NFL could sell its official blockchain rights to the market.

It is not clear how much the NFL would want. CNBC reported previously that the NBA had reached a $192 million deal with Coinbase over four years. The $10 million deal that cryptocurrency platform FTX made with the NBA’s Golden State Warriors was also a model for possible deals between blockchain-linked businesses and NFL teams, according to the newly released guidance.

Ruggiero explained that the league is extremely bullish about blockchain technology. It believes blockchain has the potential to shape innovation and fan engagement over the next decade.

The Power of Blockchain

Blockchain tech is used to create digital ledgers, such as those seen with Bitcoin. It effectively grants virtual collectibles such as NFTs, unique and non-hackable certificates of authenticity.

The memo states that clubs can now accept advertising without club logos or club marks, provided they are approved by the league. It adds that the NFL will not allow teams to engage in product licensing arrangements or sponsoring for NFTs and NFT companies, other than as permitted in connection with league-level NFT partnerships.

Rob Gronkowski and Tom Brady, NFL players, have taken advantage of the blockchain marketplace to make NFT deals. Bloomberg reports that Brady’s NFT platform Autograph raised $170 million in January.

Fanatics, an eCommerce company owned by the NFL, invested in Candy Digital, a NFT company. The firm was founded in 2021 and secured MLBl NFT rights. Candy Digital was valued at $1.5 billion after an investment by Peyton Manning, a legend in the NFL.

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