Photo courtesy of Unsplash.
NFTs are all the rage these days, even getting their own rap song on a March 28 SNL episode hosted by Jack Harlow. What are NFTs? Non Fungible Tokens are one of a kind digital entities that can be auctioned off, similar to the way a physical item would be. The items are certified as being one of a kind because of the way they are programmed on blockchains. What are blockchains? Blockchains are just incredibly secure ways of recording digital information that can’t be copied, hacked or stolen. Why not just screenshot the digital art someone else is willing to pay hundreds of thousands of dollars for? This will suffice but what people are gaining by purchasing a NFT is ownership of the digital entity itself. With an investors mindset people may believe they are purchasing something now that could be 10x as valuable or more years down the road. All in all, NFTs are one of a kind, and when desirable, also very very valuable.
The current NFT market is valued at over $300 million dollars in total. The total market value for NFTs has increased over 700% in the last three years and is rapidly climbing (Forbes). NFTs come in all shapes and sizes. Twitter CEO Jack Dorsey turned his first tweet into an NFT and sold it for over $2 million dollars for charity in March 2021. A graphic designer who goes by the name of Beeple, sold a piece titled “Everydays: The First 5,000 Days” for an unfathomable $69 million dollars through the auction house Christies, giving NFTs “a newfound institutional legitimacy” (Insider).
Trading cards, the physical kind, have been selling for record breaking prices. All in the last calendar year records for cards of the MLB, NBA, and NFL have been set in the sales of a $5 million dollar Mickey Mantle card, a $4 million dollar Luka Doncic card and a $2 million dollar Tom Brady card.
Topps, the ever popular trading card brand that made the record setting, now a $5 million dollar Mickey Mantle card back in 1952, experienced a 23% rise in sales, earning $567 million in 2020 (CNBC), largely in part to the company’s focus on the digital market. The company will go public this year, pushed by a $250 million dollar investment by investor Jason Mudrick who is betting heavy on the future for the company in the NFT market.
Topps, a powerhouse when it comes to physical trading cards will have to compete with already established NFT trading card companies like NBA Top Shot in the digital world. Since October 2020, NBA Top Shot, a Canadian blockchain technology company, has earned over $500 million dollars in sales of virtual one of a kind “moments.” The company is already a smashing pop culture success with investors like Michael Jordan, Kevin Durant, and 2 Chainz.
What are people buying exactly through a platform like NBA Top Shot? By going to NBA Top Shots online website, nbatopshot.com, and creating an account, individuals can acquire, collect and trade their favorite players “moments” by shopping the Top Shot “marketplace” or obtaining “moments” at random through the purchase of “packs.”
These player “moments” are NBA certified blockchain based video highlights that can be collected, bought and sold with live fluctuating prices similar to stocks in the stock market. Players who participate in having their Top Shot “moments” included are eventually compensated through the 5% sellers fee on every purchase that gets shared between Top Shot, the NBA, and the NBPA. The most expensive NBA Top Shot moment sale thus far was a Lebron James windmill dunk for $210,000 on March 20th, 2021.
In one of the first experiments by an individual athlete in the NFT market, tight end Rob Gronkowski created digital trading cards of himself to be sold online at auction. He created five different cards, with four of them each having 87 editions and the last card, a “Career Highlight Refractor Card” being a singular one of one edition. The results were unbelievable. Gronk netted $1.6 million from the total sales of the cards, with the individual “Career Highlight Refractor Card” selling for $435,000 alone.
The Gronk NFTs are now being resold on OpenSea, the world’s “largest digital marketplace for crypto collectibles and Non Fungible Tokens (NFTs).” An example of the listing price for one of the cards on the resale market is 54 ethers (a cryptocurrency), aka $113,231.
Many other athletes have quickly followed in Gronk’s footsteps. Luka Garza, the winner of the 2021 Naismith Award, naming the best college basketball player in the country, completed the auction of his first NFT card on OpenSea on April 10th. Garza, who played his last college basketball game as a senior in the March Madness tournament earlier this year is no longer bound by NCAA rules stating he is not able to profit off of his image, the way a professional athlete like Serena Williams would in a Gatorade commercial. The card sold for $41,141 with a portion of the proceeds going to charity. The auction marks one of the most effective ways for big time NCAA athletes to profit off of their name and likeness, an issue that is being heavily debated in sports today.
In addition to all of the NFTs, many sports games such as the always popular, Madden, FIFA, NBA 2k and MLB the Show franchises all have their own versions of “ultimate team” modes. Within the ultimate team mode of each video game users assemble their “ultimate teams” by collecting the electronic cards of their favorite players to compete with. Players are primarily acquired through in-game packs or through each game’s online open market in which different users can buy and sell cards to each other with the in-game currency. Users can earn in-game currency by competing in online games and tournaments and also by strategically generating buying and selling electronic player cards to generate profit on the open in game market. The ever popular game mode gives sports fans yet another platform to express their desire to collect trading cards.
No matter the fashion, digital or physical, people will always love to collect. The new emergence of NFTs gives sports fans another way to relate to favorite players and express their fanship, pointing towards a future for trading cards and sports memorabilia that is still yet to be fully explored.
