Latest News

Candy Digital Pushes Forward With New MLB NFTs After Fanatics Divestment

Major League Baseball is launching new digital collectibles for the 2023 season in collaboration with Candy Digital, an NFT business in its third season as an official MLB partner. Candy Digital was created in 2021, as the NFT industry reached new heights, but faced obstacles in late 2022 and early this year.

A source verified to Decrypt that the company laid off more than one-third of its around 100-person staff in November 2021, and that Fanatics sold its nearly 60% controlling ownership in Candy to a consortium led by Galaxy Digital this past January.

“During the past year, it has become evident that NFTs are unlikely to be sustainable or lucrative as a standalone business,” Rubin said in an email to Fanatics personnel. Nevertheless, Candy Digital CEO Scott Lawin told Decrypt Wednesday that Fanatics hasn’t completely exited the venture.

“Fanatics was a terrific partner and investor to get started with—they’re still an investment in Candy, albeit on a lower scale,” Lawin said, adding that “we still feel there will be opportunities to collaborate in the future.”

He went on to say that Fanatics, the sports retailing behemoth, is “a physical-first firm, they manufacture physical sports memorabilia.” Fanatics just purchased legendary trading card brand Topps, which also has its own NFT project. “Candy was and continues to be a digital-first business,” Lawin explained.

Candy Digital was founded in June 2021 by entrepreneur and VeeFriends inventor Gary Vaynerchuk, Fanatics CEO Michael Rubin, and Galaxy Digital CEO Mike Novogratz.

After obtaining $100 million in October 2021 in a round co-led by Insight Partners and Softbank’s Vision Fund, together with investments from former NFL star Peyton Manning, Link Ventures, and Will Ventures, the firm swiftly reached a $1.5 billion value.

After Fanatics exited, Galaxy and ConsenSys Mesh jumped in with a Series A1 round to pave a new course. (Disclosure: Decrypt was incubated within ConsenSys Mesh before being spun out in 2022; ConsenSys Corp. remains a shareholder.)

“I think that while markets are volatile, people can have different ideas on the viability and focus of the firm,” Lawin told Decrypt. He also mentioned the layoffs.

“Unfortunately, we, like many other companies in the area, did reduce part of our workforce at the end of last year—really with an eye toward an environment that could be lower for longer,” Lawin explained. “You had a lot of money going into the sector at the end of ’21 and the beginning of ’22, and a lot of people stepping in who didn’t really have a long-term vision.” They were there to generate as much money as possible as quickly as possible.”

Lawin was blunt about so-called “tourists” in the Web3 sector who had vanished during the crypto bad market and decreased NFT sales excitement.

“I suppose those people are mostly gone,” he added, “the tourists are gone, and the settlers are here to keep building.”

Candy Digital announced its 2023 MLB Showstopper ICON series, an NFT collection of 43 MLB stars priced at $43 each pack with three player collectibles included every pack, ahead of Opening Day on Thursday. That drop sold out in just three minutes on Wednesday, according to Lawin.

Candy’s commemorative game tickets will be available again this season after approximately 200,000 NFT collectible tickets were redeemed by fans who attended games during the previous MLB season. Last year, a #1 edition of 451 2022 Pittsburgh Pirates Season Ticket Collectibles went for $400 on Candy’s secondary market. Candy’s MLB collectibles are produced on Palm, an Ethereum sidechain designed specifically for NFTs.

MLB fans must still purchase a separate regular ticket to enter the ballpark, but Lawin anticipates NFT collector tickets ultimately offering admittance to events as well.

“I believe it’s unavoidable that the collectible ticket and the entrance ticket will merge over time,” Lawin added. “Being able to produce a dynamic digital asset that’s a collectible and contains information—possibly updated box scores, video content, and so on—and then being able to monitor that fan journey on chain and having that information available to teams so they can determine who their actual fans are… That excites us tremendously.”

“There are a lot of big, incumbent players in the access ticket area,” he said, adding that “we do believe the access ticket and the NFT ticket become one, but that’s probably a little further down the line.”

Candy used 3D volumetric technology to scan real-world artifacts from Stranger Things’ set into digital collectibles last year as part of its cooperation with Netflix.

Lawin plans to apply that approach, as well as augmented reality (AR) integrations, to its other digital collectable projects, which include collaborations with the National Baseball Hall of Fame, NASCAR teams, WWE, and Getty Images. According to him, ConsenSys Mesh will play an important part in the evolution of Candy’s NFT products.

Other notable competitors in the sports NFT area include Dapper Labs, which operates digital collectible marketplaces for the NBA, NFL, UFC, and LaLiga, as well as fantasy sports NFT business Sorare, which has partnerships with MLB, the NBA, MLS, and the English Premier League.

Candy is a “official NFT partner” of MLB thanks to a 2021 agreement, whilst Sorare became the league’s “official NFT baseball game partner” in 2022 after launching an NFT-based fantasy baseball game. With a shared MLB license, they may be competitors, but Lawin sees a future in which they may collaborate for the benefit of collectors and fans.

“I’d want to find a way to collaborate with Sorare to offer benefit to both their and our clients,” Lawin stated. “One of the aspects of sports licensing in any league is that there are various parts of rights on what can and cannot be done with those assets.” I think it would be fantastic if we could find a way to collaborate from the standpoints of fans and collectors.”

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.