You can’t touch, feel, or hold an NFT sports collectible.
Its underlying blockchain technology and what “NFT” stands for — non-fungible token — inspire mostly glazed and befuddled looks, especially from Boomers.
But in the midst of the current collectible craze centered around old-school cardboard trading cards, NFT sports collectibles are as real as they are virtual.
“An NFT is a new cardboard that has advantages that traditional cardboard doesn’t,” said Alexis Ohanian, investor, internet entrepreneur, and proud new owner of the 1989 Fleer Billy Ripken obscenity-scrawled baseball card. “Time and time again, when I think about what makes technology successful, I look toward the user experience.
“It’s less important to me that people understand NFTs — I mean, they should; please, do your research, educate yourself — but what’s going to make it cross the chasm, though, is an amazing user experience so that it’s seamless to get on board and be a part of, that it’s as simple as downloading an app, creating an account, and then getting in it.”
Think of them like stocks, or the money in your bank account. It’s there, and it’s yours. You just don’t have anything in your hand.
NBA TopShot was the first major pro league-endorsed and -licensed NFT platform.
A TopShot NFT is an NBA or WNBA “moment” — a short video clip of a player making an impressive play, with a few graphic bells and whistles stitched in. Sure, you could view the same video clip on YouTube, but that does not mean you own it. Because blockchain guarantees that they are authentic and unique, the TopShot moments, like a cardboard card, are not only bought but resold on the platform.
The site went gangbusters for the first half-year after debuting last October, generating some half a billion dollars in sales.
Star power, authenticity, and the scarcity of moments that were minted are the three major factors that influence TopShot’s marketplace, which has conducted more than $700 million in sales in less than a year. The top price paid for a single TopShot was $230,023 late last month for a LeBron James dunk from last year’s NBA Finals. That NFT was one of 79 minted, with a serial number of 23, also James’ uniform number. As of Friday, the three highest priced TopShots for sale were going for $1 million apiece, two 2019 James dunks and one Derrick Rose layup from last year.
Jimmy Perfetuo sees TopShot, as well as Bitcoin, as a money-making opportunity.
“COVID created a lot of time, so I thought it could be a good investment,” wrote the 46-year-old Marshfield resident. “I don’t necessarily have favorite ‘moments’; I try to collect top players and rookies with the lowest serial numbers possible.”
Since his first purchase in late January though late July, Perfetuo has held on to 47 moments and sold 10. He is turned off by high price tags on some pack drops — a recent pack offered by TopShot listed at $799 — and he has already learned that “the computer-savvy people tend to buy the best moments within 30 seconds” on another TopShot marketplace, Livetoken.
He’s planning to stick with TopShot for now.
“I’m still ahead in value; I’m up around $125,” said Perfetuo. “I believe the market is there, but it will depend on how they operate. They are still in ‘beta’ mode. If packs are affordable and have good value in each, then I believe this could be a great long-term investment.”
‘If packs are affordable and have good value in each, then I believe this could be a great long-term investment.’
Jimmy Perfetuo, Marshfield resident and TopShot collector
The Celtics dive in
The NBA told its 30 teams early this year that if they wanted to test the NFT waters to get it up and running by the end of July.
The Celtics accepted the challenge, and at the end of last month became the first New England professional team and fourth NBA team to release its own set of NFTs, called the “Celtics Heritage Collection.”
It bears little resemblance to TopShot. There are no video clips, and the offerings are divided into three categories. The Champs Series and Crypto Champs Series feature images of the team’s championship banners, and the Lucky Card Series features depictions of the club’s mascot, Lucky the Leprechaun, through the decades.
The Celtics’ NFTs are on the OpenSea platform and are not sold in US dollars but in Etherium, or “Eth,’' cryptocurrency. That means a Celtics NFT collector needs to already have a digital wallet that holds Eth in order to bid or buy.
Banking on two of the club’s most iconic symbols to be the visual NFT component leading into the club’s 75th anniversary season was perhaps the easiest choice faced by the Celtics.
Tougher was knowing who would visit OpenSea to buy Celtics NFTs.
“We tried to figure out at the beginning of all this if our audience at OpenSea would be more Celtics fans and did it make sense to message and position them more directly to our season ticket-holders,” said Nicole Federico, the Celtics vice president of partner development.
“After doing some research and talking to OpenSea, we didn’t necessarily think that would make the most sense; we didn’t think there would be a ton of overlap in our season-ticket member base that was familiar enough with the whole crypto and NFT market to know the steps you have to go through to even be able to purchase one of our NFTs.”
But the Celtics’ NFTs, all 177 of them, found their audience.
The collection sold out, most of it purchased in the first 10-12 hours, said Federico, with one of the championship banners receiving a winning bid of $4,311 (based on July 16 Eth prices) and a Crypto Champs banner topping out with a $3,521 bid. On average, a Champs Series banner sold for less than $80, less than $150 for a crypto banner, and less than $100 for a Lucky card.
The fluctuation of Eth and all cryptocurrencies makes a cost analysis of the overall success of NFTs a moving target.
Financial details of the Celtics’ venture aren’t available, but with increasing fan engagement the endgame of all the pro leagues and teams, the Celtics think their first foray into the NFT arena was worth it.
“Was it a financial windfall? No, but that wasn’t the goal to start,” said Ted Dalton, Celtics senior vice president of corporate partnerships and business development. “It’s a way to engage an audience that we probably don’t have regular conversations with, people in the digital art collection space, people who are probably very casual fans but who might live in Africa or China but don’t feel like they can engage with us in a way that’s meaningful for them. So this might be a way for them to become more engaged with the team.”
A venture in its infancy
As a business concerned with making itself relevant to a younger generation, Major League Baseball is making two plays in the NFT realm.
In April, longtime MLB licensing partner Topps released a couple of series of digital baseball cards — not markedly different from the cardboard variety — that sold out quickly and are being resold on NFT aftermarkets.
The other bolder venture is with Candy Digital, a digital collectible company that will endeavor to move MLB into the NFT conversation that’s been dominated so far by the NBA.
“We saw what was going on with TopShot, but we frankly remained a little concerned because of the way the prices were going way up and then way down,” said Noah Garden, MLB’s chief revenue officer. “We learned a lot from that effort and that helped us craft what we have moving forward.
“We think this is a space that’s going to be around a long time. It’s in its infancy — probably the first or second inning, to use a baseball analogy — and we wanted to deliver something that our fans can trust and that they can rely on.”
The Candy Digital-MLB partnership began with three NFTs. The first was a 16-second black-and-white video featuring a rotating Lou Gehrig bust and clips from his 1939 “Luckiest Man” speech. That sold for $70,000, plus 100 Gehrig bronze-bust NFTs sold out in 90 seconds for $250 each.
In cooperation with the Los Angeles Dodgers, Candy Digital-MLB produced an NFT version of the team’s World Series ring from last year plus the real ring and a first-pitch experience that sold for $95,000. They also sold out all 1,687 World Series champion medals — featuring a spinning Dodgers and World Series logo — at $20.20 apiece.
The NFL has yet to reveal its NFT strategy. Ex-Patriots tight end Rob Gronkowski issued his own set of NFT cards, and Tom Brady launched an entire company, Autograph, devoted to NFTs, with a series of Brady, NHL legend Wayne Gretzky, tennis star Naomi Osaka and gymnastics star Simone Biles’ “autographed” NFTs on sale at DraftKings’ new NFT Marketplace. The cost of the Brady and Gretzky NFTs ranged from $12 to $1,500.
Each of the athletes’ 10,412 respective NFTs sold out shortly after being placed on sale, generating combined sales of $806,000. Earlier this month, two of the 12 rarest Brady NFTs, which sold for $1,500, were on sale for $107,000 each on the DraftKings marketplace.
Sorare has grabbed a new NFT niche, blending the purchase of digital trading cards of international soccer players with the ability to construct fantasy teams with the collection and play in leagues.
A McKinsey & Company analysis showed that the sports NFT audience is relatively diverse, spread out among speculators, tech-lovers, collectors, and sports fans. While weekly sales figures and prices of sports-related NFTs have dropped dramatically since February, monthly transactions have increased, suggesting some stickiness to the market, which could reach $2.5 billion annually from US buyers.
Artists, musicians, and a rising number of businesses are exploring how to turn NFTs into new revenue streams. The Celtics or any other local team, pro or amateur, could integrate an NFT into a digital ticket to create an enhanced fan experience.
But NFT sports collectibles will forever be tied to the pandemic-era boom in traditional cardboard card trading, when collectors took another look at their stashes and began to trade.
NFTs emerged at roughly the same time. The point of collecting this new type of cardboard may forever elude collectors from a graying generation, but that’s not the audience NFT creators are placing their long-term faith in.
“My daughter, who is 3½, is going to have a very different relationship to the NFT and digital world than I will,” said Ohanian, referring to Alexis Olympia Ohanian Jr., whose mother is tennis legend Serena Williams. “That’s going to be her normal. And she is going to have a very different relationship to the cardboard world than I did or my dad did.”
Michael Silverman can be reached at firstname.lastname@example.org.