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Why Bills' Josh Allen launched NFTs with DraftKings, Metabilia, tech startup led by WNY native

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Buffalo Bills Football

Bills quarterback Josh Allen (17) is at the top of the market to win NFL Most Valuable Player.

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Josh Allen is working on his conditioning, passing, rushing and blockchain.

The Buffalo Bills’ superstar quarterback has partnered with DraftKings and Metabilia, a startup led by East Amherst native Joe De Perio, to produce and sell limited edition NFTs, or virtual collectibles, with tangible benefits. NFT stands for “non-fungible token,” a unique form of digital data stored in a blockchain, a verifiable, online ledger of transactions.

De Perio, 44, is a former hedge fund manager turned tech entrepreneur and the co-founder, CEO and chairman of “I Got It Holdings Corporation,” which does business as Metabilia and deals in physical and digital sports collectibles.

“Essentially, what we deliver is an opportunity for a fan to take part in the journey with Josh and profit from great things that happen,” De Perio said.

De Perio is accused in a lawsuit of defrauding investors of another company he co-founded, SportBLX, which sought to “tokenize” and “sell shares” of professional athletes as collectibles and investment vehicles, but told The Buffalo News he believes the lawsuit against him and the company in Manhattan federal court has no merit, will be dismissed and has nothing to do with Metabilia or Allen.

Allen holds an equity stake in Metabilia, which touts partnerships with DraftKings, at least a half-dozen NFL and NBA franchises, the Pro Football Hall of Fame and more than 40 individual athletes.

The company will sell a limited edition of Allen’s “Series 1 Member” NFTs at 3 p.m. Thursday on the DraftKings Marketplace, an exchange created by the fantasy sports and betting provider in August. The NFTs will be sold in three tiers – 50 black, 400 platinum and 1,000 green – which will cost $2,000, $200 and $100, respectively.

Metabilia is offering owners of these Member NFTs long-term benefits, including additional NFTs commemorating Allen’s career achievements, which can be resold, as well as exclusive access to auctions, discounted memorabilia and special event invitations. The Member NFT, its auction pass, memorabilia pass and special event pass can be broken up and resold separately.

Deloitte Global estimates sports NFTs will generate more than $2 billion in transactions in 2022, about double the figure in 2021. But demand for NFTs has cooled amid the latest crash in cryptocurrency prices, with sales of NFTs dropping more than 90% since September, according to the industry data and analysis website NonFungible.com.

Metabilia plans to release a new “Member” series of Allen NFTs each year. Proceeds from the 17th NFT in each series will benefit the Patricia Allen Fund at the John R. Oishei Children’s Hospital.

“My background is in finance, so we have an understanding of markets and asset classes and how to create something of longevity,” De Perio said. “We’re not just looking at this as putting pictures and video out as a token and expecting people to bid it up. There needs to be a purpose to owning a Josh Allen NFT, and I think we figured it out.”

Allen’s Metabilia NFT features a still image of the quarterback wearing a plain black hoodie, and a moving, GIF-like image of Allen spinning a football on the ground while wearing his Bills uniform without the shoulder pads, helmet or jersey. He appears in a white shirt with the Bills and NFL logos blurred, to avoid infringing on trademarks.

Metabilia is hosting an information session and will raffle Allen-signed memorabilia from 11 a.m. to 1 p.m. Saturday at 12 Gates Brewing in Williamsville.

Allen is scheduled to meet with a group of “Founders Series” Black Level Member NFT holders at the first members-only event Sunday in downtown Buffalo.

A lukewarm reception?

Metabilia sold 172 Founders Series Allen NFTs  on June 2, De Perio said.

“Shoutout to #BillsMafia for the INSTANT SELL OUT of my Founder Class #NFTs yesterday!” Allen tweeted Friday. “Go to metabilia.io for your FREE chance to grab signed gear & meet at my VIP Event. Follow @metailio_io to learn about my Member Program for my next NFT drop on June 9th.”

Allen was met with an unusual torrent of criticism from his followers on social media:

“Not you too…”

“Please no Josh not NFTs.”

“I think I’ve liked every JA tweet but this is a no.”

“Smh. Bro I really thought you were different. Pushing NFT scams on your fan base is not cool. We’re a loyal bunch, don’t take advantage.”

The Bills, who are not partners with Metabilia, deferred NFT-related interview requests for Allen to his agent, Tee Stumb, at Creative Artists Agency. Stumb declined to make Allen available for an interview with The Buffalo News and did not respond to a follow-up request for comment on the quarterback’s partnership with Metabilia.

“Metabilia and I see eye-to-eye on the potential for the NFT program,” Allen said in a written statement provided by Metabilia. “I believe fans will see value over time and understand my commitment to a successful venture.”

Metabilia is the second NFT company to partner with DraftKings Marketplace, following “Autograph,” which was co-founded by Tom Brady.

A spokesperson for DraftKings, the exclusive distributor of Metabilia NFTs, provided a written statement on the partnership from Beth Beiriger, the senior vice president of DraftKings Marketplace operations.

“The affinity for sports collectibles continues to rise in the digital space, and DraftKings Marketplace is committed to building a fan-first destination that captures this growth and unlocks new experiences,” Beiriger said. “Metabilia brings a wealth of capabilities in sports memorabilia and this collaboration represents our latest efforts to immerse fans and form passionate communities around emerging star players.”

Allen blazes own trail

Metabilia has released, or “dropped,” member NFTs featuring Major League Baseball players Vladimir Guerrero Jr. and Ronald Acuña Jr. The company is preparing to release an NFT featuring Fernando Tatis Jr., De Perio said.

Allen is the first National Football League player featured by the company. Aaron Donald is next, De Perio said.

The NFL is embracing NFTs by forging partnerships with other companies.

The NFL and NFL Players’ Association in 2021 announced a collaboration with Dapper Labs to create exclusive digital video highlight NFTs. The league and Live Nation last year also began providing fans with ticket stubs to some games, including the Super Bowl, in NFT format.

The Bills entered the space by offering a ticket-stub NFT to fans who attended the team’s 14-10 loss to the New England Patriots in a windstorm Dec. 6 on Monday Night Football in Orchard Park.

In January, the NFLPA announced a partnership with Upland to produce interactive player NFTs.

In May, the NFL partnered with Mythical Games for an NFT-based video game.

The wild, wild ‘web 3’

There is no limit to the number of NFTs that can be minted, and there are no significant barriers to producing them.

OpenSea, a high-profile crypto startup and the largest open-source marketplace for nonfungible tokens, is facing backlash over stolen and plagiarized NFTs, The New York Times reported this week.

A search of OpenSea reveals the platform has aggregated all 1,450 of Allen’s Series 1 Member Metabilia NFTs, which are built and appear publicly on the “Polygon” blockchain, a Level-2 Ethereum sidechain, though they are not for sale. The site also lists another 100 Allen-related NFTs and more than 44,000 Bills-related NFTs.

“Anybody who can set up a website can launch an NFT,” said Bina Ramamurthy, a professor at the University at Buffalo’s computer science and engineering department and director of the school's Blockchain ThinkLab. “So you have to be careful where you’re buying an NFT from and what you are going to use it for. Don’t think that it’s a collectible that’s going to go up in price. It all depends on how many items. If they release 10,000 or one million of these digital copies, your value is nothing.”

Ramamurthy described blockchain technology as an intermediary that establishes trust between two parties, enabling peer-to-peer transactions and obliterating political and regional boundaries. But she also stressed the importance of consumers exercising due diligence when purchasing an NFT and to ensure their authenticity by only buying from reliable sources.

The power and promise of NFTs, she said, far exceeds artwork and collectibles.

“Understand that NFTs can be used for so many other things,” Ramamurthy said. “NFTs can be used for identity management. Your passport could be an NFT. Your real estate document could be an NFT. Beyond all the sports memorabilia and collectors’ items and art and other things, there are profound implications of blockchain as a trust layer, as well as NFTs themselves.”

De Perio said he’s mindful of how value is tied to authenticity and scarcity.

“What we’re not going to do is flood the market and crush the value of them,” he said. “We’ll be thoughtful with Josh about when to do a ‘Series 2,’ when to do a ‘Series 3,’ in the future.”

De Perio faces lawsuit

In 2018, De Perio co-founded the company SportBLX, an investment platform that made headlines with its efforts to “tokenize” and sell shares of professional athletes to the public. Its lone athlete was P.J. Washington, a forward for the Charlotte Hornets and the 12th overall pick in the 2019 NBA draft.

A lawsuit filed by Cypress Holdings against De Perio and SportBLX in U.S. District Court for the Southern District of New York claims investors were duped into contributing $1 million to the company in 2019 when it reportedly misrepresented a business plan that failed to develop.

SportBLX has said claims of fraud and misrepresentation “border on bad faith.”

De Perio said he still holds stock in the company, but is no longer involved in its management and described his departure as “amicable.”

“They’re trying to turn athlete earnings into securities,” De Perio said. “My interest lied more in NFT technology and pushing the envelope of what those could be. … I’m not prone to hyperbole, but I missed out on the Internet boom because I was still in high school. I missed out on the smartphone because I was doing leveraged buyouts for a private equity firm.

“Blockchain technology is a very similar shift in technology. There’s going to be a lot of development over the next few years. There’s going to be a lot of ‘eToys,’ and there’s going to be a few ‘Amazons,’ and hopefully, we’ve developed a company that has lasting, staying power.”

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