Michigan football, meet NFTs: Wolverines first to partner in new NIL venture
Break out your checkbooks — or cryptowallets — Michigan football fans. Wolverines players are headed to the world of NFTs.
Not to be confused with the NFL, where multiple Wolverines are expected to be drafted in late April, Michigan players' likenesses will soon be attainable as individual "nonfungible tokens". NFTs are unique digital assets, usually audio or visual files purchased with cryptocurrency, that represent real-world objects and are stored on a blockchain.
BlockPack, a company that creates NFT marketplaces and plans to link them with college sports fans, will make the digital tokens and facilitate their resulting auction, according to a release from the company. Players will provide the images themselves, said Richard Oh, BlockPack's CEO.
Last summer, the NCAA rescinded or lightened most rules that barred student-athletes from making money based on their name, image and likeness. Oh believes this partnership with Michigan will be the first of its kind.
A Michigan associate athletics director declined to comment on any potential BlockPack relationship with players, saying simply the company is not an official U-M partner or licensee. That makes sense because universities, due to state regulations that go into effect later this year, are not supposed to have an economic involvement or oversight of NIL deals with students.
Oh said he had been in contact with Michigan officials, also adding that state and NCAA rules bar the university from reviewing or participating in agreements.
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Michigan football players were the first partners in this exercise, Oh said, because of the size of the school's fan base and the number of players who agreed to provide the images. He said this first-of-its-kind idea is unlike other NFT marketplaces because the market will be built by interested buyers before the NFTs are public, instead of the other way around — with someone making an NFT then trying to garner interest.
The intensity of college sports fandom makes Oh believe hundreds, if not thousands, of Michigan fans and alumni will put up funds in exchange for a chance to put money in student athletes' pockets and have a token for themselves.
"We start with basically a collective," Oh said. "So it's a function of boosters and large-dollar people who say, 'I want to buy, I want to support the team, I don't care about how many NFTs I get, I want to contribute X.'"
That fundraising period helps determine the interest and individual NFT market price, then an auction allows buyers — those of more modest incomes than big-money donors who will initially fund the project — to purchase one-off NFTs or "blind packs."
These packs are essentially digital NFT-based "trading cards," similar to physical trading cards like the ones made by Topps. Except in this case, the players are receiving 80% of the proceeds while BlockPack receives 20%. (Those who own the NFTs can make money by trading them within the marketplace as well.)
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These NFTs will be based on the 2021 roster, which numbers over 100 players, but don't expect to see one for likely top NFL draft pick Aidan Hutchinson unless things change. Oh said Hutchinson "might be a little busy" and isn't one of the many students who've agreed to provide an image.
"Our plan is to do 500 per student-athlete (but it could potentially go up depending on interest)," Oh later wrote in an email. "The goal in this initial team program is not to create exclusive NFTs that trade at some exorbitant value, but to create the strongest dynamic community of supporters. We won't know the final NFT count for the collection until we close the period for student-athlete sign-up."
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When asked about its availability to Michigan State football players, Oh said he'd reached out to several programs, including MSU, but the players' buy-in wasn't quite high enough yet.
"Absolutely, this could work at Michigan State," he said.
He thinks if this program is a success — he said there's the potential for millions to be contributed in the fundraising stage — other students at other universities will see the utility.
After all, it cost the players nothing, he said.
Oh expects the auction process to begin at some point in June and will last several days, with players receiving their first round of payments before the football season. The money will be evenly distributed throughout all players, Oh said, with each participant having the opportunity to earn future payments through royalties.
Follow the Free Press on Facebook and Twitter for more news. Tyler Davis can be contacted at tjdavis@freepress.com or on Twitter @TDavisFreep.
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This article originally appeared on Detroit Free Press: Michigan football 1st to have players' NFTs available for bid
