Back in March Liverpool made the somewhat controversial decision to enter the world of non-fungible tokens (NFTs). The LFC Heroes Club collection of collectible digital artwork was launched via famous London auction house Sotheby's, the five-day sale seeing a percentage of the financial gain heading towards the LFC Foundation, Liverpool's charitable arm of the football club.
The sale did not deliver the kind of numbers that were hoped for, with £1.125m in revenue arriving, with 95 per cent of the available NFTs going unsold. Out of the 171,072 that were available to purchase, just 9,721 were sold - 5.7 per cent of the full drop.
Liverpool CEO Billy Hogan intimated during the summer that the club hadn't necessarily closed the door on a return to the NFT space, which has tumbled dramatically from the boom that it had enjoyed during 2021 and early 2022, where a number of professional leagues, teams and athletes had moved to create their own NFTs in order to find a way into a new revenue stream that had presented itself during a period when, due to the pandemic and other effects such as potential new legislation around gambling sponsorships in football, some traditional revenue streams had been squeezed or closed off entirely.
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Liverpool's senior vice-president of digital marketing, media and technology, Drew Crisp, speaking at the Leaders Week sports conference at Twickenham Stadium on Thursday, admitted that the launch had been something of a learning curve but didn't rule out NFTs fitting into the Liverpool business in some form moving forward.
Crisp said: "We have a responsibility to our fans to enter these worlds. We know how important sport is, we know what it can do for mental health, physical health and communities. For us as a club, one billion fans worldwide, we want to give them an experience and this technology and this world enables us to give them an experience and take the authenticity of football to wherever they are in the world. That's absolutely something we should be leading on and something we shouldn't be shy about.
"Why did we try LFC Heroes? We could have sat on the sidelines and just commented on what everyone else said about NFTs or just saw what others did, but we wanted to know what it took to create them, to sell them, to market them, to understand who buys them, and you can't do that unless you're in it. You have to be on the pitch in order to play the game and we had to be in the NFT world in order to understand it.
"We learned a lot from it. We got some things wrong, we got some things right. We've got an audience that we didn't have before and a sense of where NFTs might play in our eco system and that they're not things to be scared of. It was a really good test and learn for us and the good thing is that outside of the Legends games that we run for our LFC Foundation it is the biggest earner for the Foundation that we've ever done."
The club created two categories of digital collectibles - a set of 24 unique ‘Legendary’ 1 of 1 NFTs, and a series of generative ‘Hero Edition’ NFTs that combine multiple player illustrations to produce a unique digital collectible for each fan. The ’Legendary’ and ‘Hero Edition’ digital collectibles were made available to purchase during a three-day sale from Wednesday, March 30 to Friday, April 1. Within the sale window, the ‘Legendary’ 1 of 1 NFTs, which consisted of 24 legendary heroes, were made available to purchase through a live auction.
The 'Legendary' auction saw an auction of 24 items raise $744,750 (£567,760). The biggest sellers at the auction were Mohamed Salah's NFT at $88,200 (£67,227), Jurgen Klopp's at $81,900 (£62,425) and Trent Alexander-Arnold's at $69,300 (£52,821). Of the total raised, minus costs, the Foundation were in line to receive 50 per cent of the total. A total of £281,375 has been raised for LFC Foundation from overall sales so far, money which will go towards its work in the community, including their education and employability programmes, inclusion and special educational needs and disability support.
But the club's launch was not without criticism due to the risk of potential financial harm to investors and the impact on the environment through the energy required to 'mint' NFTs on the blockchain. All unsold NFTs from the LFC Heroes collection went unminted, meaning only the purchased NFTs will be on the blockchain. The remaining permutations have not been minted and therefore cannot and will not be burned, where an NFT is removed permanently from circulation.
NFTs have formed one part of a new strand of revenue streams that have come online for clubs, including the likes of cryptocurrency.
There has been much talk around the 'metaverse' and 'Web 3.0', where there is hope among some sports executives that technology such as augmented reality will allow for them to create new strands to their business models by reaching their global legions of fans and allowing them to experience, albeit artificially, experiences that match-going fans do.
But while Crisp described such technology being available to aid those efforts as his 'dream' for his time in football, he explained the ways that Liverpool are working towards trying to make some inroads already, although stressing that it was a process that takes time and one where the financial yields may not be swift in arriving.
Crisp said: "There's loads of stuff that we're looking at in terms of thinking about ways that we can bring the experience of, say, walking to the stadium, the experience of taking your seat, the experience of hearing You'll Never Walk Alone, the experience of last minute goals. We are always looking at ways we can bring that across the various channels we have got to our global fans.
"We will continue to identify those different opportunities. How do we build the virtual reality of the stadium and is there some connected merchandise that we can explore so people feel the experience and moment of the game when they are 3,000 miles away. I'm sure we will trial some new things and in due course there will be more products that we launch.
"It's a slow burn. My peer who runs commercial, my CEO who consistently says we need to earn more money from technology, they are right but some of this new technology takes time to build that money, it takes time to build that business model.
"The businesses cases that cross my desk almost every day about how the metaverse can make us millions of pounds, but it's not going to tomorrow. Let's face some reality here, that's where we have to test and learn this stuff."
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