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Professional sports leagues have made billions over the years from the sale of licensed collectibles, slashing everything from team jerseys to artwork to autographed soccer balls. In the US, the National Basketball Association is taking the industry to a new level – selling game highlights to fans as digital tokens on the blockchain.
The company is called NBA Top Shot, a joint venture between the league, its players association, and a consumer blockchain company that says it is creating licensed sports memorabilia for the digital age.
Top Shot’s popularity has skyrocketed in recent weeks, to the point that a single 12-second climax of a November 2019 LeBron James dunk sold for more than $ 200,000. A similar clip can be viewed on YouTube for free.
In layman’s terms, Top Shot takes NBA highlights, encodes them into a digital asset known as a non-fungible token (NFT), and allows consumers to buy and sell them on an online marketplace licensed by the league itself. These transactions are kept on the blockchain, which serves as a record of ownership.
Each token, known in Top Shot parlance as a “moment,” receives a serial number and is sold in limited-edition “packs,” ranging from $ 9 to $ 230 depending on the moments they contain, similar to packs. of baseball or basketball cards. .
Collectors can buy and sell moments from each other on the secondary market, which has posted more than $ 300 million in sales since Top Shot’s public launch in October – $ 250 million in the past 30 days, according to the NFT cryptoslam tracker. io.
Players, team owners and broadcast hosts have contributed to the publicity for Top Shot in recent weeks. Portland Trailblazers point guard CJ McCollum tweeted about entering the trade, inviting fans to direct message you on social media to discuss. “I want to learn more about these moments,” he wrote. “Especially my moments hahaha.”
The US sports memorabilia market is already worth $ 5.4 billion annually, according to a 2018 estimate from Forbes. Angela Ruggiero, CEO of the Sports Innovation Lab, a research firm that studies technology and fan behavior in sports, said that digital tokens could expand the market to people who are not considered “traditional fans,” generally defined. like those who watch games on television. or buy tickets and t-shirts.
Case in point: Robyn Batnick, a high school counselor from Long Island, New York, said she was immediately captivated by the Top Shot compilation moments after her husband suggested it as an activity they could do together.
“He said, ‘I have a confession to make, I just spent $ 2,500 on a hologram,'” he said. Initially alarmed by the dollar value, she was intrigued once he demonstrated how the online process works.
Collectors must register on the Top Shot website at established times to await a “delivery” or release of moment packets. Demand is so high that more than 200,000 people joined the queue last Friday for a drop of just over 10,000 packages.
“I’m definitely not a sports fanatic,” said Batnick, 35. “The players and the movements? They don’t mean anything to me. I see it as a game, and I say, I want to play! “
Blockchain company Dapper Labs partnered with the NBA to develop Top Shot in 2019 following the success of its previous venture at NFT, CryptoKitties.
Dapper Labs co-founder Mik Naayem said his goal was to develop a product whose popularity could spread beyond the insular cryptocurrency community. “We wondered, if we could create something nice and appropriate on blockchain, could we get ordinary people to get involved?” he said.
The proceeds from the sale of the Top Shot packages are divided between Dapper Labs, the NBA and the players association. The three groups also split a 5 percent cut from each secondary market sale, according to two people familiar with the deal.
The league helps determine which highlights turn into moments, according to Adrienne O’Keeffe, associate vice president of global associations for the NBA. Current moments are primarily limited to games from the 2019-2020 and 2020-2021 seasons, but the league could release historical highlights, such as those of Michael Jordan, at some point in the future.
Meanwhile, Naayem said that Dapper Labs plans to eventually allow collectors to use their moments as tokens in a digital game, similar to Pokémon.
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Top Shot comes at a time when the market for traditional trading cards and trading card games is booming. The “collectible cards” category on eBay grew 142% last year, with 4 million more sales in the US alone compared to 2019. Sales of basketball cards, the second most popular card category in the US. eBay after Pokémon, grew 373%.
To illustrate Top Shot’s meteoric rise, the Financial Times compared the price trajectories of a LeBron James trading card and a LeBron James Top Shot moment.
Both the card, a 2003 Topps Chrome LeBron James # 111 in mint condition (PSA 10), and the moment, a 13-second clip of James replicating a 2001 Kobe Bryant dunk as a tribute to the late Lakers star, recently sold for around $ 34,000. For the card, that was more than double the price it got in October; The current value, meanwhile, grew more than 700 times over the same period, from its October resale price of $ 46.
Robyn Batnick’s husband, Michael, who works as a financial advisor and co-host a podcast on finance and culture, called Top Shots “such a speculative asset you could own” and the hype has led him to make financial decisions in against your judgment. “I spent $ 400 for a Duncan Robinson moment. It’s not even good. I want to punch myself in the head. “
A Topps Chrome LeBron James # 111 trade card from 2003 © Card Ladder
However, it has achieved returns of between 20 and 50 percent in resales so far.
Batnick said he took an interest in Top Shot in late January when the online community of gatherers offered an antidote to pandemic boredom.
“When the fall happens and you get in line and you see your place, there is something in the community, it just erases the loneliness,” he said. “It’s not about the money, it’s about the chemicals in your brain.”
Additional reporting by Eric Platt
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