The Premier League signs an agreement with NFT-based fantasy football game Sorare

Sorare, the $4.3 billion fantasy football game, has signed a four-year deal with the Premier League that will provide the world’s top football league with licensed official player cards.

Players of the game will be able to purchase and use official Premier League licensed NFTs under the exclusive multi-year deal.

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Paris-based startup Sorare, which has 3 million users worldwide, lets people compete in five-a-side fantasy football matches. Chances of success are based on the real-time performance of players on the field.

Sorare said it is also launching two new features in the game. These include the ability to compete with league-specific player cards and a “financial fair play” feature that prevents users from selecting star teams.

Sorare were first rumored to be in talks with the Premier League – the top tier of England’s men’s football leagues – about a licensing deal in October 2022. Sorare boss Nicolas Julia said things took longer to close than expected as the Premier League had an existing NFT licensing deal with another company.

Sky News previously reported the deal was worth £30m. Julia declined to share details about the financial terms and length of the deal.

As part of the deal, the Premier League has bought shares in Sorare which gives it the option to take a stake in the firm at a later date, confirmed spokespeople for Sorare and the Premier League.

The news comes despite a sharp decline in NFT trading activity.

The values ​​of NFTs – or non-fungible tokens – have plunged amid a slump in crypto prices known as the “crypto winter”, exacerbated in recent months by the bankruptcy of the FTX exchange.

According to data site CryptoSlam, the average sale price of an NFT in December 2022 was $143.22, down 63% from $383.73 in December 2021.

Trading volumes are also significantly down. Total NFT sales plunged 78% in December to $678.2 million from $3.1 billion a year ago.

Julia said that Sorare has “trained very differently than the rest of the room.” Total card exchanges on the platform amounted to $500 million last year, almost doubling from $270 million in 2021.

Still, the company has noticed a shift in usage with players more inclined to use “free to play” mode where they don’t have to compete with paid cards.

About 87% of Sorare players “don’t even spend money on the platform,” Julia said.

That has raised an obvious question about the sustainability of Sorare’s model: how does it make money when most of its users aren’t transacting?

Julia, for her part, said that the large power users were enough to anchor revenue generation. Sorare takes an unspecified cut of all transactions via its service.

It’s worth noting Sorare is the third largest NFT pool globally, according to CryptoSlam data. The firm processes roughly $1 million in transactions in a 24-hour period, CryptoSlam’s figures show.

The Premier League’s partnership with Sorare adds to a series of deals between sports leagues and crypto platforms.

Sorare himself has previously announced deals with Major League Baseball and the National Basketball Association.

Some deals, such as Crypto.com’s deal for the naming rights to the Staples Center arena in Los Angeles and FTX’s now-defunct sponsorship of the Miami-Dade Arena, have soured amid the plunge in crypto prices.

Julia said Sorare was shielded from the fallout from the crash on crypto-focused sports advertising as his firm focuses on intellectual property licensing rather than sponsorship.

The French startup was last valued by investors at $4.3 billion in September 2021. Sorare is backed by top names, including Japan’s SoftBank and the venture capital companies Accel and Benchmark. It also counts sports stars Lionel Messi, Serena Williams and Kylian Mbappe as shareholders.

Sorare has not been without its controversies and has come under fire over accusations that it encourages gambling.

The UK Gambling Commission is investigating the firm “to determine whether Sorare.com requires an operating license or whether the services it offers do not constitute gambling,” according to a notice on October 8, 2021.

Julia said he was unable to provide an update yet on the process of the UK inquiry.

In November, the startup committed to making some changes to its platform following action taken by France’s national gambling authority. They included strengthening the free-to-play elements of the game. The company is required to enforce these measures by 31 March.

SEE: FTX’s collapse shakes crypto to its core. The pain may not be over