It appears as though the public’s appetite for NFTs isn’t as strong as Liverpool FC were hoping.
In March, the Reds announced a mammoth non-fungible token project, the LFC Heroes Club, that would see 170,000 individual pieces of digital art featuring the likes of Mo Salah and Virgil van Dijk sold and/or auctioned off.
However, the launch has proven to be a monumental failure, and by April 4 just 10,000 items had been sold – barely 6% of the total collection.
The project has been considered controversial by many inside football, with the sale of NFTs still completely unregulated by the UK government. Others consider it a simple ‘money grab’, tempting fans to spend as much as £57 on a cartoon that – while exclusivity is the main selling point of – can be easily replicated. Shouldn’t engaging with your supporters be free, too?
Liverpool had called upon auction house Sotheby’s to assist with the launch, which would see 171,000 ‘Hero’ tokens – featuring caricatures of the club’s players and coaching staff in superhero guises – put up for sale, while a selection of ‘Legendary’ tokens went to auction.
The latter group fared reasonably well, with lots featuring Jurgen Klopp, Alisson and Van Dijk exchanging hands for more than $40,000 (£30,000). But less than 10,000 of the Hero pieces, which are distributed to the buyer at random – meaning they could spend £57 on a reserve team player, have been purchased….leaving more than 100,000 unsold at the end of the three-day sale period from March 30 to April 1.
It means that those NFTs that went ‘un-minted’, i.e. that were unsold and didn’t get added to the blockchain, won’t be taken out of circulation, which assumes that another sale will take place in the future.
Misreading the Room
There is a sad truth to the tale – the club’s charitable foundation was expected to benefit to the tune of nearly £1 million from projected sales of £8.5 million, according to Liverpool’s PR team. However, their 10% cut of the current sales means they will receive just £140,000 instead.
It flies in the face of research conducted by Liverpool’s commercial team, who expected their younger fanbase to be bang up for spending a few hours’ wages on an NFT of James Milner.
“We know that not all fans will be ready to explore the world of NFTs. However, we have conducted some in-depth fan research before entering into this market,” so said the Reds’ vice president of digital, Drew Crisp.
“We found that almost a quarter of 18-34-year-olds would be likely or very likely to participate in official NFT offerings from the club.”
Crisp has since admitted that the decision to enter the fan token space was ‘polarising’ and that they took a ‘tough choice’ in launching the NFT collection. The sales figures would suggest it’s an error they won’t be repeating in a hurry.