(Bloomberg) — Sorare, the maker of a fantasy sports app popular in Europe, will create a version of the crypto game with Major League Baseball, the first addition of a big four American sport.
The game will resemble the company’s European football app, which has 1.8 million players worldwide and has made Sorare a sought-after investment for venture capitalists. People will be able to buy and sell digital baseball cards, represented as nonfungible tokens, and assemble a fantasy team that’s ranked based on the athletes’ performance during the season. Sorare will offer free and paid versions this summer after the All-Star Game in July, the MLB said.
Fantasy leagues and trading cards have long been a part of baseball culture, said Nicolas Julia, the chief executive officer of Sorare. The company will also seek to draw fans by offering rewards that include player meet-and-greets and stadium tours. “We are seeing a lot of potential,” he said.
MLB sees the partnership as a potential way to broaden baseball’s fanbase, said Noah Garden, the league’s chief revenue officer. NFTs and fantasy sports tend to be more popular among younger fans, and Sorare could introduce baseball to a more international audience, Garden said.
Crypto and sports are becoming increasingly aligned. The National Basketball Association already has its own NFT initiative, NBA Top Shot, with the startup Dapper Labs. Crypto companies have bought up the naming rights to sporting venues, including the Staples Center in Los Angeles, which is now the Crypto.com Arena. Coinbase Global Inc. is a sponsor of the NBA and FTX of MLB.
Julia co-founded Sorare four years ago in France, and it quickly won over football fans across the continent. Sorare generated about $325 million in sales last year, the company said. Investors were drawn to the growth — nearly 4,000% last year — and the prospects. SoftBank valued the business at $4.3 billion in 2021 knowing the goal was to expand to a major American sport, Julia said. It unveiled a deal with Major League Soccer in March and plans to finalize a partnership with another big US league, in addition to MLB, later this year, Julia said, declining to identify the sport.
MLB initially had some hesitations about embracing crypto, Garden said. (He has personally owned and lost money on NFTs.) But Garden said the NFTs used on Sorare’s platform will have staying power because of their connection to gaming. “I don’t want somebody investing a lot of money in something that either decreases very quickly in value, or worse, it goes away,” he said.
Indeed, it’s a tricky time to sell the idea of investing in crypto tokens. An index of NFT assets fell by about 26% over the last week, and high-profile scams plague the market. Monthly sales volume for NBA Top Shot in April were less than half of what they were in January, according to the research firm CryptoSlam. Sorare’s volume declined 40% to $21.1 million over the same period.
Investors said the market will rebound. People’s love of sports and gaming will outlast market turmoil, said Peter Fenton, a member of Sorare’s board and a general partner at the VC firm Benchmark. “Sorare is an ah-ha moment of what’s possible in crypto,” he said.
Alexis Ohanian, the Reddit co-founder and a Sorare investor through his VC firm Seven Seven Six, compared the startup to Magic: The Gathering and Dungeons & Dragons, where people own the assets they play with. Blockchain technologies “take us back full circle to the traditions of gaming,” said Ohanian, whose wife, the tennis great Serena Williams, is an adviser to Sorare’s board.
Sorare is profitable and doesn’t expect to seek more financing in the near future, said Julia. An initial public offering in the U.S. is something the company could explore down the line, he said. “Right now, we are really focused on launching the US sports.”
(Updates with additional Ohanian title in the penultimate paragraph.)
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