How NFT Sports Collectibles Are Unlocking New Revenue Streams for Sports Franchises
NFTs give brands new and lucrative opportunities for fan engagement
Sports collectibles are as old as the games themselves, with memorabilia like trading cards, apparel, and autographed equipment preserving the history of these beloved pastimes while deepening the personal connections fans develop with their teams and players of choice. Now, NFT (non-fungible token) sports collectibles offer brands and fans alike the chance to push their passions into the future, deepening their bond and driving revenue along the way by turning those items of historical record into eternally preserved digital collectibles.
Diving into NFT sports collectibles can be intimidating, but they’re not nearly so hard to understand as brands may fear. In fact, with the right implementation, they can be intuitive and easy to access for fans of all engagement levels. Here’s how your brand can leverage NFT sports collectibles to pull in some extra revenue while bringing your fans further into the fold.
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What are NFT sports collectibles?
NFT sports collectibles are either digital assets on the blockchain or physical assets with corresponding blockchain tokens that ensure their authenticity. In both cases, they leverage the best qualities of NFTs to solve shortcomings among physical collectibles and to provide new functionality that improves the collecting experience. With NFT sports collectibles, authenticity is guaranteed, provenance is publicly accessible and easily established, quality never degrades, and trading is easier than ever.
Purely digital assets at their most basic can be thought of as digital versions of more traditional collectibles — picture a digital version of a basketball trading card and you’ve got the basic idea. But because of their digital nature, the possibilities of what can be made into an NFT are almost limitless and NFT creators have already begun pushing the boundaries of what a collectible can be.
Two of the most prominent examples of purely digital NFT sports collectibles are NBA Top Shot and NFL All Day. Orchestrated in partnership with Dapper, which runs its own Flow blockchain and marketplace, the two brands take not just players, but specific moments or plays, and turn them into digital collectibles. They’re often represented by digital videos, but NFTs allow collectors to own the moment itself in the same way one might own a game ball, providing a deep and high-tech way for fans to connect with the game. In February and March 2021, over $400 million in NFTs were sold on Top Shot, and the NFL NFT collectibles actually outsold their NBA counterparts for the first time in September 2022.
Another approach to NFT sports collectibles is the physical goods backed by an NFT. In this approach, a user mints an NFT to represent a physical item such as a rare trading card or a game jersey. The NFT then functions as a deed of ownership, freeing the owner of the need to store the collectible themselves and allowing them to move it to the storage facility of their choosing. They can then keep, sell, or trade the NFT rather than moving the collectible itself, allowing the item to stay perfectly preserved and safe from the risk of damage even as ownership changes hands. All the while, the blockchain records the transactions, making provenance and authenticity easy to verify.
This form of NFT sports collectible is even more nascent than its purely digital cousin, but some major names have already entered the ring. For example, Nike acquired the NFT brand RTFKT in 2021 and used the brand’s NFT expertise to develop collectible physical garments backed by valuable NFTs. The NFTs for each garment ensured scarcity and authenticity, making the items more exciting for customers. The two brands reportedly made $185 million in revenue in 2022 through their collaboration, with nearly half of that revenue coming from royalties generated by sales on the secondary market — sales made significantly easier through the incorporation of NFT technology.
How do NFT sports collectibles generate revenue?
NFT sports collectibles provide value in two main ways. The first is through the initial sale of the NFTs, which can pull in huge value spikes. Sports collectible company Topps sold a one-of-one Mickey Mantle NFT trading card in 2022 for $471,000, pulling in a tidy bit of revenue for the brand. The Golden State Warriors became the first NBA team to mint its own NFTs in April 2022 and sold 327 NFTs for over $2 million total.
But the ongoing value of NFTs comes in the form of royalty payments on every subsequent transaction. Because collectibles tend to appreciate in value, they also tend to be sold frequently, ideally bringing in more money each time. With the right balance of availability and scarcity, brands can leverage NFT drops into vibrant marketplaces wherein trades are frequent, and each trade sends a kickback to the brand itself. In this way, NFT sports collectibles can become significant passive revenue generators, as they have for the NBA (which passed $1 billion in all-time Top Shot sales in May) or the NFL.
How to break into NFT sports collectibles
If all this talk of NFT sports collectibles has you interested in the space, but unsure how to get started, Dibbs is here to help. Dibbs is one of the top players in the physical-backed NFT space. Collectors can mint NFTs for their sports collectibles, send it to be stored in Dibbs’ climate-controlled, highly secure vault, and trade the NFTs to their hearts' content. Thousands of collectors have joined our marketplace, trusting us with their prized collectibles and demonstrating the approach’s ease of use. Should a customer desire, they can turn in their NFT to retrieve the corresponding physical item itself in just a few days.
If you’re ready to get in the NFT game, our team of experts can guide sports brands through the process, steering them away from pitfalls and toward profit. Schedule a demo today to learn more.
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