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1% Stake in Mexican Soccer Team Up for Auction as NFT

For anyone who has ever dreamed of owning a professional soccer team a non-fungible token (NFT) token representing a 1% stake in Club Necaxa might be their best bet. 

Club Necaxa of Mexico’s Liga MX has become the latest sports team to jump into the NFT landscape. While most teams are holding auctions featuring NFT art or digital wearables, Club Necaxa is taking things a step further.

The team has announced their intention to auction off a 1% stake in the team in the form of an NFT security token. The auction will take place on the OpenSea marketplace with the bidding to start at $1.3 million. The stake in question is currently owned by Al Tylis’ group of investors who bought 50% of Necaxa, last week. 

This auction is notable for many reasons and reportedly is the first such sale to take place. 

Terms of the NFT sale

One of the more interesting terms of the sale will be the permanent ownership of 1% of the team which comes with “all of the benefits of my shares,” Tylis says. That includes part of the team’s annual revenue. That means that, even if Tylis’ group’s equity in the club falls, the NFT owner will retain a 1% stake in the club.

Therefore, it is not necessarily 1% of what the club is worth today, instead 1% of what the club is worth on any given day. Also, the winner will not be required to invest in the club, and simply enjoy the benefits of being the only one of their friends to “own” a soccer team.

As Tylis says, “if we all have a capital call because we want to build a new training facility, [the owner of the NFT-tied stake] isn’t required to make that call.” Another very important difference to NFT ownership is that if the winning bidder wishes to transfer the token, they are not required to first offer it to the current shareholders.

But, every time the token is re-sold, the Tylis investors get 10% of the sale. The winning bidder will also have no rights to vote on anything team-related but will get tickets to all games and team facilities. 

The investment group is not allowing just anyone with a hefty bank balance to bid on part ownership of their new team. There will be a vetting process that any serious better must pass, before bidding can occur. This vetting process will also apply to anyone the NFT owner wishes to transfer ownership to. As Tylis points out “usually, [sales] are subject to my right of first refusal,” and any future sale of the NFT will be no different. 

Possible issues with the NFT sale

An important distinction is that this sale is going down in Mexico meaning it will have different legal requirements for securitization in the United States or Europe. Ergo, despite the digital nature of the NFT, anyone outside of Mexico looking to bid will apparently face more complex legal issues to navigate.  

Another possible snag could come from the Mexican Football Federation (FMF), which must approve all sales within the league. The sale of this NFT, at least under the current terms, would not follow that rule and might cause some turmoil within the organization.

In a statement posted this morning on their website, the FMF said that “any change or direct or indirect addition of shareholders (regardless of the legal form in question) will be considered as a replacement of the membership certificate and therefore will be subject to compliance with the requirements described above.”

The post 1% Stake in Mexican Soccer Team Up for Auction as NFT appeared first on BeInCrypto.

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