We had the chance to interview Elena Borroni, Head of Sponsorships and Brand at the Royal Spanish Football Federation. With the rise of the topic around NFTs and Fan Tokens, we wanted to deep dive into the how and why the Royal Spanish Football Federation decided to get involved with NFTs and Fan Tokens and to understand a little more about the deal.
1. Can you tell us a little bit about how the Royal Spanish Football Federation handled the NFT and fan token opportunity? And, and you know, which vendor you decided to partner with?
With the rise of the topic around NFTs and Fan Tokens and how the sports industry was starting to get into this new market, we wanted to be innovative and be one of the firsts National Associations to get involved in a project like this. So, in May, right before Euro 2020, we signed two deals for both NFTs and fan tokens. We partnered with Bitci, and with Oaro. The reason why we partnered with Bitci was that their structure distribution was aligned with our vision and strategy, and also from an economical standpoint, it was a better fit.
In terms of objectives, we can say that this project is part of a wider strategic objective of digitalization and innovation. So these deals for us are to get closer to our fans, especially in this specific and peculiar pandemic period. So thanks to this digital asset, we can get closer to our national and international fans over the world and also identify new fans globally that were not included in our database.
2. Can you provide a little bit more information as to why you decided to go with two vendors? Do you have one specifically on the NFT aspect and the one on the fan token, or are they linked to both products?
Bitci is for both NFTs and fan tokens, but in terms of NFTs, it’s just focused on the Spanish National team. Bitci has the right to create products from the date of the signature onwards.
Oaro is the general partner of the Royal Spanish Football Federation, not just for the Spanish National team. Oaro also provides the user facing interface where player NFTs created by Oaro or any other brand in case it would be necessary, can be traded. Oaro has the right to create products from the date of signature all the way to the more historical images.
3. How was the commercial structure of the deal? For how long did you sign with the vendors? And is there any sponsorship agreement in place as well?
The commercial structure of the deal is very similar to a licensing one, and choosing one vendor over the other will depend on the overall strategy of the Federation. The business model of the deals we signed had an upfront guarantee fee and on top of that, added royalties over the transactions made with their fan tokens. The upfront fee could vary depending on the value of the digital properties of the federation. We also gave them sponsorship offsets and visibility in order to promote and give a sort of credibility to the brand that for the fans is something completely new.
What we experienced with the different companies that we talked to, they tried to push for long-term agreements but due to the ever-changing landscape and the evolving market, we decided to sign a 3-year partnership and not a longer one. This allowed us to test the market but also renegotiate the contracts after three years.
¨With the rise of the topic around NFTs and Fan Tokens and how the sports industry was starting to get into this new market, we wanted to be innovative and be one of the firsts National Associations to get involved in a project like this.¨
4. Who led the project internally? And how long did the negotiation last between the first outreach from Bitci and Oaro all the way to the contract signature?
In order to make the deal happen, we involved internal and external experts.
Internally, the project was led by the marketing department since the beginning in full coordination with our presidential board. Our legal department was also involved once the negotiation was going forward in order to investigate as deep as possible the credibility of our partner and secure and assured structure and safe agreements. Once the contract was signed, our communication department also got involved in order to promote and communicate this new product that we have.
Externally, we were supported by a marketing agency that was really important in the ultimate success of the agreements. They introduced us to the partner and supported us in the entire negotiation. They are also helping us with Bitci in the contract implementation by being our daily contact for all the operational tasks. So, they are really present and they’re really part of the entire process from negotiation to signature.
The negotiation was pretty fast-moving and it lasted approximately six weeks. This timing was facilitated by the intention to start our collaboration before Euro 2020 so it was really fast and this was also the reason why we involved lots of departments at the same time because we needed to assure that everything was perfect and that we didn’t leave behind any detail and with such new product we need to be careful and assure that everything was really dialed up.
5. The Royal Spanish Football Federation has deals both on the fan token and the NFTs side. So on the NFT’s, can you tell us a little bit about the assessment that was made on IP rights’?
Our approach was similar to our previous assessments of other partners & agreements and it was important for us to respect the individual image rights. For example, in our case, the rights of at least a group of five players can be used as a team or individually. That is how we are able to launch the NFTs of the squad players who were competing in the Euro 2020. So, from a legal point of view, it’s very similar to the agreement that we have with Panini. Basically, treating the individual image rights as a team and creating their NFTs just like a piece of ad hoc design. There are multiple different ways to create NFTs or other products that, for sure, will come out in the future. But, in our case, we use user groups and not individual players and at least 5 players need to be together to not break any rules that we have in place at the Spanish Federation for individual image rights.