Mexican soccer league Club Necaxa offers 1% ownership stake in NFT auction

Al Tylis, Club Necaxa Co-Owner joins the Yahoo Finance Live panel to discuss Necaxa’s NFT and stake in a Mexican Soccer Team.

Video transcript

JARED BLIKRE: Welcome back to Yahoo Finance. I'm Jared Blikre. You ever wanted to own your own football club? That would be soccer for us Americans. Well, Al Tylis did, and he's invested in a Club Necaxa-- Nick-axa, I think that's the right pronunciation. Thanks for joining us.

This is a fascinating story, because you were just searching around for a club to invest in. What was your journey and how did you decide on this one?

AL TYLIS: Well, look, sports teams are ultimately media properties. And I've been an investor in a number of other sports leagues, both in the US and abroad. And once I realized how popular the Mexican soccer league is in the United States-- and in Mexico, it is the combination of football basketball, baseball, hockey all rolled up into one.

In the US, I realized that there are more people watching Liga MX, which is the main Mexican soccer league where we're an investor, there are more people watching those games in the United States per game on average than the Premier League and Major League Soccer combined. And once I saw that and realized it, I felt like there was a massive opportunity.

And then there was also some very meaningful long-term tailwinds, where currently, there are nearly 60 million Hispanic Americans. That number-- more than half of those are Mexican-Americans. That number is projected to double in the next 20 years, and so we feel like we've got some really interesting macro tailwinds behind our investment.

AKIKO FUJITA: So, Al, you've got this NFT offering now that allows those fans to really be invested even more in this team. Why go that route? Why an NFT?

AL TYLIS: So one of the things we wanted to do here is the club has been run incredibly well by the Tinajero family. This club has been around for 98 years. And one of the things that we wanted to do was be a little more forward-thinking, a little more thinking about where things are going rather than where they've been.

And for us, NFT-- and this is the first ever of its kind, where the NFT will actually afford you an economic interest in a professional-- in a major professional sports team. And ultimately, I see a lot of professional sports teams going this way. I see, ultimately, the democratization of ownership of sports teams.

And at the end of the day, fans are the lifeblood of these teams. And the more we can engage with our fans, the more our fans can feel like they own something, I think that is going to drive interest, that'll drive attention, and ultimately create a greater stronger fan engagement with our club with the league generally.

AKIKO FUJITA: And I know you've got one more day until the bidding closes-- what kind of take-up have you had?

AL TYLIS: So it's been incredible so far. So we've had nearly 500 people register, which means they went through a rigorous KYC process, signed non-disclosure agreements, provided us their crypto wallets. And we've already received several-- a handful of bids. They're sealed bids, but they are all above the $1.3 million reserve price. And we're excited to see what happens at noon tomorrow.

Anybody who's interested can go to NecaxaNFT.com. It's all automated on the website-- the KYC, the registration process, and you could bid on there. But it's really been-- it's really been exciting, it's been interesting. I think we've also opened a lot of people's eyes in the sports world generally.

JARED BLIKRE: Yeah, it's opening my eyes. And you're an investor-- I'm wondering what else you're investing in. And if this is a success, and it looks like it's going to be a success, are you going to apply this strategy to something else?

AL TYLIS: I think so. Like, I think there's-- with the technology of the blockchain, I believe there are many assets that ultimately have liquidity associated with them that today are not liquid. My old business was in the real estate space, was a public company that I sold several years back. Clearly, you could see the application of non-fungible tokens and just overall blockchain technology to various parts of the real estate transaction ecosystem.

I think, again, in sports-- I could see this being-- we're doing this kind of unique, scarce, 1 of 1, first in the history token. But ultimately, there's no reason why tokens can't create different layers of ownership, different rights, different opportunities to engage, different discounted stores, access to the players, access to the club in certain ways.

I just think there's a lot of deeper angles that you can ultimately take. And another space that I've spent time in where I think there will be applicability is esports. I've been avid investor in the esports space for a handful of years now, including on G2E Sports where I'm on the board. And I think there's meaningful applicability there as well.

AKIKO FUJITA: Yeah. I mean, to the point you made, Al, it's interesting how with NFTs in sports, we've seen it applied to, obviously, highlights, with those tokens being issued. You talked about merchandise-- we've seen that side explored too. But ownership is a new one. And you're the first one to do this. What's the structure you think other sports teams can follow based on the experience you've had so far with this offering?

AL TYLIS: Yeah. And, look, that's the-- there's a lot going on in the NFT space, right? And that is the unique aspect of this. And so structurally the way we've done it is we've bought 50% of the club. We have a US-based LLC that owns 50% of this team. The token owner will own 2% of that vehicle, which on a pass-through basis will be 1% of the club.

And I think we've opened a lot of people's eyes. I think from a structural standpoint, there aren't really impediments. If you think about what this is, we have other limited partners in the group whose ownership is effectively reflected on a piece of paper. And in this case, the ownership is reflected in a unique digital asset.

And so it's not-- it feels like a big leap. And I think, again, we've opened a lot of people's eyes. But at the same time, structurally, it's really not all that different. It's really just using the blockchain technology, using a digital asset to represent something that other investors are already a part of.