What started as an NIL-inspired side project for four former University of Georgia football players has turned into a full-fledged business.
The Players’ Lounge, an NFT-backed community for college fans, has appointed two of those former Bulldogs, Keith Marshall and Aaron Murray, as co-CEOs with hopes of expanding the project beyond Athens, while convincing athletes and fans that two industries mired in uncertainty—NFTs and NIL—can work in tandem.
The platform was initially built to sell Georgia football NFTs to the Bulldogs’ rabid fan base, but its leaders saw a flaw in their model: Crypto is risky, while college fans are risk-averse.
“We quickly realized that a large percentage of the population that we were ultimately trying to market and sell to, which were collegiate football fans in the Southeast, are fairly conservative,” Marshall said. “When you hear things like crypto [or] blockchain, they were extremely hands-off.”
Instead of trying to strictly sell NFTs to a skeptical consumer group, The Players’ Lounge turned the freshly minted digital collectibles into an access pass to a fan-centric community. Purchasers gained access to the athletes involved, special events and exclusive content. The NFT was no longer the end product but rather an entrance fee—and one that could be bought with cash instead of cryptocurrencies.
The NFT side of the business currently serves only as a means to an end, but Marshall and Murray still fully believe in NFTs’ place in the future of sports fandom, so much so that Marshall passed on a post-MBA offer from McKinsey & Company to join The Players’ Lounge full-time. Though nearly $8 billion was traded in NFTs in the first quarter of 2022, the volume of sales slowed substantially, falling by nearly 50% according to data collection website NonFungible, as the volatility of the market hit cryptocurrencies and took down many NFT projects with it.
During that same span, The Players’ Lounge’s first Georgia drop in January generated $1.5 million in revenue (the 4,500 NFTs returned $900,000 in primary sales and another $600,000 secondarily). Some 50% of the primary NFT sale proceeds went directly to their initial player partners, putting nearly $30,000 in each athlete’s pocket.
The Players’ Lounge was able to make NFTs appealing to college sports fans, most of whom aren’t comfortable with crypto, Marshall said, by asking them to spend actual dollars for real-world experiences rather than pushing digital currency and speculation.
“It’s more about utility,” Marshall said. “It’s not just a cool piece of art. This is your subscription to this community. [So] we’re selling NFTs, but we’re not really selling NFTs. You could literally sell a ticket instead, the NFT is just an effective way to do it in Web 3… which is the way society is moving. The underlying technology, the blockchain decentralization that allows for visibility, for easy transactions—that’s not going away. And that’s why [we] feel strongly that NFTs are going to have some staying power in sports.”
The Players’ Lounge’s collectibles don’t currently feature the image or likeness of any actual players. The Georgia NFTs are called “DGDs,” for “digitally generated dogs,” some of which boast player signatures, including national champion quarterback Stetson Bennett’s. But the platform does lean on player participation for its real bread and butter: the community access gained from purchasing the NFT.
Marshall and Murray, a Georgia quarterback from 2010-13 who tops the SEC in career touchdown passes, will now look to build The Players’ Lounge into something much bigger than a Georgia football fan community, where they, along with their two other co-founders, brothers Trent and Ty Frix, all have deep ties.
They’ve tapped 150 athletes, both men and women, from sports including gymnastics, volleyball, track and field, baseball and basketball, as well as football, to help build momentum throughout the SEC (including its future members). They plan to launch at LSU, Texas, Oklahoma, Alabama and Auburn in the coming months.
Rather than continuing with a revenue share model, this crop of players will instead receive a salary to remain involved in the community in the 12 months after the NFTs drop. Athlete partners are expected to engage with the NFT-holders “however they see fit,” Marshall said, only owing The Players’ Lounge an hour of content a month. Those interactions could include anything from chatting with fans on message boards, making podcast or video appearances or even playing a round of golf with community members—whatever is authentic to the athlete’s interests.
It’s too early to tell if that community will be enough to keep secondary sales flowing and demand for new drops high. But for now, The Players’ Lounge founders are banking on the insatiable appetite of SEC fans.