Non-fungible tokens (NFTs) have blown up in 2021. While the art world is making the biggest headlines, pro sport NFT sales are gaining ground. From the NBA to NFL and across the pond to the EPL, the wide world of sports is taking notice of this growing trend.
NFT market explosion in 2021
Be it leagues, teams, or players, it seems like everyone wants a piece of the NFT action these days.
In 2021 alone, there have been countless big sales and noteworthy collaborations across many industries.
In February an 18-year-old digital artist named FEWOCIOUS teamed up with virtual sneaker brand RTFKT to design several NFT kicks. Those sneakers sold for a total of $3 million in under seven minutes.
The biggest news to date by far has been a digital artwork by Beeple that sold at Christie’s for a staggering $69,346,250. So far, no single NFT has sold for anywhere close.
With all the money flying around the NFT market, it’s no wonder that the mega-industries such as professional sports have taken notice.
What this means for athletes
The rise of NFTs toward the mainstream has created a lot of space for new markets to break in.
In many ways, due to the craze surrounding NFTs right now, they can function as a viable marketing platform. Much like teams selling merchandise, trading cards, bobbleheads, or memorabilia, NFTs function as another e-commerce option.
The big difference is the lack of limitations and potential for creativity that NFTs provide. So far, the driving factor in bringing NFTs to the sports world has been the athletes themselves.
Professional athletes have a history of creating brands around their names and, in essence, serving as their own media platforms. NFTs are a perfect way for individual players to market themselves via a trending platform and make a buck.
NFTs offer new marketing opportunities
NFTs provide better accessibility. While the superstar players like Rob Gronkowski and LeBron James grab headlines, many other lesser-known players are also creating NFTs.
Cleveland Browns’ safety Sheldrick Redwine is not exactly a household name. However, he might be popping into your newsfeed after announcing he will be the first player on the team to offer an NFT for sale.
It’s not only the pros who are getting in on the action either. NFL prospect Zach Davidson announced his plans to launch the first-ever NFT rookie card.
The news broke before the NFT draft last week, and, at the time, Davidson’s future in the league was still uncertain. A week before that, Iowa basketball player Luke Garza became the first college athlete to market an NFT.
The inclusion of college athletes is particularly interesting considering they do not get paid to play. There is a comprehensive rulebook they must abide by in terms of earning money while playing in the NCAA.
However, this rulebook doesn’t account for NFTs. As such it will be interesting to see if selling NFTs can or will affect a college athlete’s eligibility.
The rise and success of NBA Top Shot
There is no better example of the success of NFTs and U.S. sports teaming up than NBA Top Shot. The company created digital basketball cards that can be bought and sold virtually. The cards feature art and/or video clips highlighting noteworthy events in the NBA.
The blockchain-powered platform gives users the ability to not only buy digital packs of cards but also sell or trade them. The product has been around since 2019 and was the brainchild of Dapper Labs and the NBA Players Association (NBPA).
The product describes itself as a:
“Revolutionary new experience in which jaw-dropping plays and unforgettable highlights become collectibles that you can own forever.”
Cards are created through a collaborative effort by the NBA and Dapper Labs. The former choosing highlights, and the latter determining how many of each they will sell.
The lowest classification of cards on Top Shot is common, which are moments that can have 1,000+ digital copies. From there, classifications continue to rare(150-999 copies), legendary (25-99 copies), platinum ultimate (3 copies), and genesis ultimate (1 of 1).
The rare and legendary cards require users to purchase specific packs at $22 and $230, respectively. The ultimate editions are only available through an auction.
So far, the four highest-selling Top Shot moments are all LeBron James highlight dunks, and each sold for north of $100,000.
The goal is to become the future of sports trading cards, and so far, the project has been incredibly successful.
With single-day sales reaching $34 million on February 22nd and totals sales of over $250 million, it appears Dapper Labs CEO might be on to something.
Pro sports teams are now joining the NFT craze
While players have been spearheading NFTs, the teams they play for are starting to jump on board as well.
Recently, the Golden State Warriors became the first professional sports team to release an NFT collection. The collection contained many custom artworks, but the big items were digital and physical NBA championship rings.
The sale netted the team more than $2 million and sold 327 NFTs. A 1-of-1 ring commemorating the team’s six championship wins sold for $871,581.
When you consider it is the second-highest price paid for a championship ring of any sport in history, this is of particular interest. The first was Charlie Sheen’s purchase of Babe Ruth’s 1927 World Series ring for a shade over $2 million.
With the success of the auction, it should only be a matter of time before other teams sell similar collections utilizing NFTs.
What is next for NFTs in sports?
It remains to be seen whether NFTs are a passing fad or a look at the future of sports marketing and merchandise.
While opinions are divided, many industry experts believe that NFTs will continue to grow and might be the future of art, music, sports, and finance.
Perhaps no market has greater short-term potential than the trading card industry. The success of NBA Top Shot has already established the demand for NFT sports cards. As a result, other leagues are already starting to look into doing the same.
One of the more recent NFT sports projects to blow up is the fantasy soccer platform Sorare. Launched in 2019, the game didn’t start picking up steam until late in 2020. The platform reported 1,000 players in November and has been growing steadily into 2021.
While there are similarities to Top Shot, Sorare takes things a bit further and utilizes collectible cards as players on a fantasy soccer team.
Users create lineups with the cards they have collected to compete in fantasy soccer games. The company has announced an upcoming mobile app.
They also plant to grow the players offered. Already 135 clubs worldwide have been licensed from leagues like the MLS, J League, K League, and Euro clubs such as AS Roma, Juventus, Liverpool, and PSG.
The game itself has a real shot at bringing NFT trading cards together with fantasy sports players to create a unique industry.
While the product’s current value of $15 million is dwarfed by NBA Top Shot, the idea is a lot more ambitious than just selling cards.
Despite the much smaller player base, the average sale price of $283 in March was more than 80% higher than their NBA competition.
NHL considering NFTs
The National Hockey League (NHL) has also expressed interest in joining the NFT world with a collectible card platform of their own. Elliotte Friedman, an NHL journalist, commented positively on the likelihood of NFTs making their way to the NHL.
“It’s impossible for all these leagues not to notice what’s going on here and say, ‘We have to find out about this.’ They’ve begun discussing this with the NHL, the players’ association, and the alumni. There are obviously rights issues, there are issues about who gets a piece of what percentage of each sale.”
As Friedman points out, it is hard for leagues and players alike not to be aware of all the money flying around right now. With the NHL Salary Cup not happening in the near future, players and teams will be looking for any way to scrounge up a few extra dollars.
NFTs future in the hands of fans
The question remains. Will NFTs last, or will they fall by the wayside as many trends do.
At the end of the day, the demand and market will be determined by the fans. Will the esteem that comes along with buying a six-figure digital NBA card endure? Currently, the NFT bubble as it relates to sports appears far from popping.
While the future of NFTs is murky, one thing is crystal clear. As long as leagues, teams, and players can make money on NFTs, they will remain a part of the industry indefinitely.