They declined to identify the club until the sale is complete, which they said could be within the next month. The team competes in one of the lower two leagues of the English Football League, known as League One and League Two, the investors said.
“EFL has proven to be surprisingly progressive in our conversations with them,” said Eben Smith, co-founder of the group, “and they’re excited by the outsized interest we hope to bring.” An EFL spokesman declined to comment.
Cryptocurrency and NFTs have become increasingly entrenched in the sports world, with athletes, teams and leagues all selling digital offerings and collectibles. The Los Angeles arena shared by the Clippers and Lakers will be renamed Crypto.com Arena. The Sacramento Kings started mining cryptocurrency in their arena three years ago. And an increasing number of organizations have offered limited NFT collections, including the NBA’s Golden State Warriors and Washington Wizards and the NHL’s New Jersey Devils and Washington Capitals.
But WAGMI United is aiming for something more comprehensive, making NFTs a cornerstone of the organizational blueprint around which it hopes to build a vibrant — and financially invested — digital community.
The group is led by Preston Johnson, a prominent sports gambling analyst, and Smith, a former derivatives trader now immersed in the NFT space. It also includes Daryl Morey, the Philadelphia 76ers’ president of basketball operations; businessman Gary Vaynerchuk, the chair of VaynerX; social media personality Bryce Hall, who has more than 21 million TikTok followers; and several creators, collectors and investors from the NFT and cryptocurrency worlds.
Most members of the group have no formal soccer background. But they feel the traditional ownership model is broken and plan to employ a novel approach that relies heavily on NFTs as a revenue stream. They will use that money to invest in analytics, they say, and outspend opponents to quickly climb the EFL ladder. Their goal, they say, is to eventually gain entrance to the English Premier League — a potentially lucrative long shot that has turned lower-levels English teams into lottery tickets.
“Owning a club is kind of like a dream as a kid, right?” Johnson said. “So this is our chance, and it’s kind of the perfect time. Everything’s hitting exactly right with what we can do with digital branding and communities and crypto.”
The blueprint has hints of a 21st-century version of the Green Bay Packers, a publicly owned team in which fans are akin to shareholders. The Packers have raised more than $54 million in their latest offering of “shares,” which pay no dividends, aren’t available for resale and come with no real ownership rights.
The WAGMI United group won’t offer ownership shares, either. But by selling NFTs, they would in effect offer a piece of a sports team, they say, giving fans a sense of ownership that doesn’t exist in today’s sports world.
“We’re not selling securities, to be totally clear,” Smith said. “No, you are buying a collectible that comes with certain intellectual property rights that previous collectibles did not.”
An NFT is a unique digital asset — a piece of art, music, video or even a meme — that relies on some of the same blockchain technology and principles of cryptocurrencies. The market for NFTs has exploded among investors as rare assets have skyrocketed in value. A digital collage of hundreds of images sold at a Christie’s auction earlier this year for $69.3 million.
Entire communities have sprouted around some NFT collections, such as the CryptoPunks and the Bored Apes Yacht Club. Those NFTs, featuring digital cartoon characters, amount to collectibles, like Pokémon cards, with some rarities fetching hundreds of thousands of dollars.
Johnson and Smith believe that model could help a team to become “Crypto’s Club,” with a unique community of online investors and fans. While some sports teams have sold NFTs, WAGMI United envisions a larger offering — not a one-off cash-grab but a collection that builds a digital universe, a real-world community and a sustainable business.
People who purchased NFTs of the Bored Apes have watched their investment spike while also laying claim to a unique community. NBA star Stephen Curry, for instance, purchased his cartoon ape earlier this year for $180,000 and uses the image as his Twitter profile.
WAGMI United aims to create a collection of NFTs associated with and branded by the soccer club, which might feature characters, uniforms, videos or photos. For many, it could be an investment; for others, a chance to have a unique piece of a sports franchise.
Unlike many sports-related NFTs, which often limit commercial pursuits, the group hopes to transfer some IP rights to the NFT owners, allowing fans to pursue their own merchandising opportunities. Or NFT owners might sit on their digital asset, content to perhaps brandish their team-created NFT as an online avatar, such as Curry and his digital ape.
The WAGMI United group hopes the sprawling crypto community will eagerly adopt the team with their wallets and their loyalty. If the WAGMI group’s initial NFT collection includes 10,000 offerings, Smith said, that’s “10,000 pretty rabid brand ambassadors right off the bat."
“It’s kind of like community storytelling,” Smith said. Unlike established sports brands such as the Yankees or Manchester United, he said, his group would be “starting from scratch,” allowing it to be “riskier in what you allow your brand to become. Then you can work with your community to figure out what it is together.”
The Yale-educated Smith, 38, had a background in finance when he began focusing on NFTs three years ago. He co-founded one start-up company that connects fans with digital collectibles featuring athletes, and another that is focused on licensing opportunities for NFT franchises.
Johnson, 34, is perhaps best known as a big-bearded ESPN sports gambling analyst. He has a master’s degree in sports psychology and relied on analytics and betting models to distinguish himself in the gambling world. He left that gig earlier this year to focus on NFTs. One of his projects — Pixel Vault and PUNKS Comic — became one of the early NFT success stories, in part because of how it grew a community around a single NFT concept.
The ability to buy low and potentially scale the European soccer ladder was attractive as Johnson and Smith sought other investors. They’re among many investors and EFL owners who have been inspired by the recent success of Brentford FC, a club owned by a successful sports gambler who used analytics to turn around the team’s fortunes. Brentford was promoted this year to the highest level after a 74-year absence.
The WAGMI group wouldn’t reveal the expected purchase price of the club, but an EFL team could likely be had for less than $20 million — a relative pittance compared with the $400 million-plus that a Saudi investment fund paid for the EPL’s Newcastle United.
“By bringing new technologies and fresh thinking to the world of English football, I believe WAGMI United could be on the leading edge of a revolution in how sports franchises are run — both on the field and in the front office,” Morey said in a statement.
The NFT money would be reinvested in the club. The group isn’t fashioning itself as a Ted Lasso-esque outsider charging across the Atlantic to make a bunch of unorthodox soccer decisions. Though Smith says they want to challenge conventional thinking on the field as well as off, the group will rely on soccer people to make soccer decisions. WAGMI United already has contracted with England-based data analytics firm StatsBomb.
Still, they know they will be viewed as outsiders. Most of the EFL teams are more than a century old, where fan loyalty is passed down from generation to generation and soccer outsiders can be met with healthy dose of skepticism or even hostility.
“I not only think that’s a fear,” Smith said, “that’s kind of our expectation. The truth is that if you want to run an English football club in a conventional way, you can guarantee yourself that you’re going to lose 300,000 to 500,000 pounds a year with no pathway to growth and no way to get out of it because there's a town right next door.
“So we are going to try a bunch of unconventional stuff but will be pretty much led by the numbers from an analytical perspective. And our hope is that it works. There’s not that much downside if it doesn’t.”