The Essential Guide to Sports NFTs
Few fans are as passionate as those rooting for their favorite teams. Whether it’s cheering on the home team in the World Series, watching a star athlete break yet another record, or commiserating over a heartbreaker of a game at a sports bar, sports connect people from all walks of life. That dedication from fans is what makes sports and NFTs (non-fungible tokens) such a perfect fit — this new technology helps players and teams immortalize everything from licensed apparel to trading cards to unforgettable moments on the field.
So how are sports teams, athletes, and other athletic brands using NFTs to engage with fans and unlock new revenue streams? Read on to find out everything you need to know — including how to get in on the tokenization game yourself.
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What Are Sports NFTs and How Do They Generate Revenue?
NFTs have created a lot of buzz in the past few years, but if you’re still not sure how they work, you’re not alone. Short for “non-fungible token,” an NFT is a unique digital asset that can be bought, sold, and stored on a decentralized online ledger known as the blockchain. This not only guarantees the token's authenticity but also records every transaction from its creation onwards in a way that’s publicly accessible.
While still nascent, NFTs can take almost any form, with artwork, music, and video game assets (think playable characters or outfits) among the most popular. Some NFTs are purely digital, while others are backed by physical objects and experiences. Because of their collectible nature, NFTs can be an exciting, lucrative way for brands to dip their toes into the world of Web3.
So what does that all have to do with sports? Think about it — sports collectibles have been around almost as long as the games themselves. Fans love anything that brings them closer to their favorite players and teams, whether it’s a trading card, an autographed jersey, or floor seats at the game. Sports NFTs expand on this centuries-old concept in new ways and further deepen that connection while creating new revenue streams in the process.
NFTs generate revenue in two core ways:
- Initial sale: When an NFT first goes on sale, it can generate an enormous amount of buzz. Just ask legendary card maker Topps, which sold a one-of-a-kind digital version of a 1952 Mickey Mantle card for nearly half a million dollars in 2022.
- Royalties: Like other collectibles, sports NFTs tend to appreciate in value. Every time an NFT is sold on secondary markets, the original creator gets a royalty payment — think of it like the cast of Friends still getting paid every time someone streams the popular sitcom.
To learn more about how sports NFTs unlock new revenue streams for franchises, check out the full blog post.
What Brands and Players Are Capitalizing on Sports NFT Opportunities?
While sports NFTs may sound futuristic, a number of brands have already found success with Web3 projects. One of them, Enjin, has been around since the earliest days of cryptocurrency before shifting its focus to NFTs. More recently, Derek Jeter’s Arena Club mixed the digital and physical by combining NFTs with old-school trading cards. Fans can buy, sell, or store physical cards on the Arena Club platform, which already has an active user base less than a year after launching.
Though far from the only type of sports NFT, trading cards are especially well-suited for the tokenization process because of their focus on design. Collectible art is one of the top NFT categories, so it makes perfect sense that premier trading card company Topps was among one of the biggest NFT creators of 2022. As we mentioned above, Topps’ digital version of a 1952 Mickey Mantle card sold for nearly half a million dollars. Of course, it didn’t hurt that the winner had the chance to meet Mantle’s sons, showing how NFTs tied to experiences can be lucrative opportunities.
Meanwhile, sportswear brands like Nike and Adidas are making their marks with their own NFT projects. Nike partnered with the popular NFT company RTFKT to create hybrid virtual and physical collectibles backed by tokens, the first of which was a tokenized AR Genesis hoodie that customers could then redeem for a physical version. Adidas has also incorporated physical backed NFTs into its offerings with its Into the Metaverse collection, which minted purely digital tokens in its first phase that could be traded for corresponding physical items in phase two.
For more on these and other brands getting into the sports NFT game, read 4 Successful Brands Capitalizing on Tokenization in Sports and 5 Sports NFT Companies Killing It in 2022.
What Are Some of the Most Successful Sports NFT Projects?
If you’re wondering exactly how lucrative the sports NFT market is, these massively successful projects should give you an idea:
- NBA Top Shot: As one of the first sports NFTs to market, NBA Top Shot set the tone with a digital alternative to collectible cards called “Moments,” or short videos of basketball highlights. Among the rarest of these is a LeBron James slam dunk that went for $387,600 when it was first released.
- Sorare: Sorare combined a card-inspired NFT marketplace with fantasy sports, and the results were impressive. Just a few years after its 2018 founding, the company is valued at $4.3 billion, with estimated revenue of $29 million per year.
- Fanzone Sports Club: Instead of focusing purely on collectibles, Fanzone Sports Club gives sports fans experiences they’ll never forget. Each membership tier comes with exclusive benefits like access to real-world events and digital experiences with athletes, with individual NFTs going for hundreds of dollars (or more).
- NBA The Association: During the 2022 NBA playoffs, NBA The Association minted 32,000 NFT cards representing players from 16 teams — with a twist. Each token was connected to live data feeds, changing the visual characteristics of the NFT based on player performance. Long after the playoffs concluded, fans continued to trade these special NFTs, with prices ranging from $20 to over $1 million.
Want to know more? Check out the full blog post: The 5 Most Lucrative Sports NFT Projects of All Time.
How Can Players Benefit From Sports NFTs?
Franchise owners and associations aren’t the only ones finding lucrative new revenue streams from NFTs. Individual athletes at both the pro and college levels can also mint and release NFTs on their own terms.
Here’s how a couple of professional athletes have already pulled it off:
- Bryson DeChambeau: The 2020 U.S. Open champion, who bills himself as “the first professional golfer to release his own official limited edition set of NFTs,” did just that in 2021. Each NFT features artwork of DeChambeau, along with his signature.
- Nakobe Dean: As a rookie linebacker for the Philadelphia Eagles, Dean partnered with NFTs by Athletes to launch a line of tokens designed to look like digital trading cards. Each of the three types of tokens in his collection was produced in limited supply — two at 500 apiece, and one at only 17 individually numbered NFTs.
For decades, NCAA players weren’t allowed to monetize their images or sign brand deals, but that all changed on July 1, 2021. It took only minutes after the policy change for student-athletes to sign their first deals, so it was just a matter of time before players like Luka Garza and Blake Corum got in the game.
For athletes looking to tap into the unlimited potential of NFTs, their first step should be to partner with an existing platform that already has the infrastructure in place to mint tokens and capitalize on the unique benefits of physical-backed NFTs for connecting with sports fans. At Dibbs, we work with brands and individuals to create physical backed NFTs that can be sold and resold, while the correlating physical item is stored safely in our vault. Ready to get started? Book a demo with Dibbs now!
How Can Brands, Franchises, and Athletes Break into the Sports NFT Game?
Partially driven by “rapid technological advances,” the global sports memorabilia market is expected to reach $227.2 billion by 2032 — a stark increase from its $26.1B valuation in 2021. In other words, sports-related brands that don’t invest in NFT technology will be leaving money on the table as the lines between the physical and digital continue to blur.
That said, the tokenization of sports collectibles requires expertise and infrastructure that sports brands don’t necessarily have in place. Hiring a consultant or teaming up with an established platform can help brands quickly overcome this knowledge gap.
What Are Sports NFT Consultants and What Do They Do?
NFT consultants are experts in their field who offer their professional services to brands hoping to get an informed perspective. Here are a few ways consultants can help get sports NFT projects off the ground:
- Strategy: Because NFTs are designed to bring in revenue long after the initial launch, brands need a long-term strategy that includes secondary markets and well-crafted smart contracts. Consultants can advise on pricing and marketing strategies, as well as token supply and customer demand.
- Minting: NFT consultants can step in and ensure the token creation process runs smoothly by advising on blockchain technology, thereby laying essential groundwork for creating new sports NFTs, all without requiring existing staff to go through a crash course in blockchain engineering.
- Marketplace management: Once an NFT is created, an important question remains — where should it be sold? Consultants can guide NFT creators to active marketplaces that are compatible, trustworthy, and brand-safe.
Naturally, hiring a consultant requires an upfront cost, but a good one will increase your revenue potential far beyond their fee. Consultants also typically have significant professional networks, giving clients access to even more leaders in blockchain tech and tokenized assets.
To learn more about the benefits of hiring a sports NFT consultant, read our blog.
What Are Some Established Platforms That Handle Sports NFTs?
Depending on the project, it may make more sense to partner with an established NFT marketplace. These platforms already have the infrastructure needed to mint, sell, and resell NFTs, helping projects get off the ground more quickly. When considering an NFT marketplace, you’ll want to consider the size of the market, the specific blockchain technology in place, and any transaction fees.
We’ve rounded up a few of the top sports NFT marketplaces to get you started:
- Dibbs: It’s probably not a surprise to see us on this list! Dibbs specializes in physical backed NFTs or NFTs that correlate to ownership of a real-world physical item. Dibbs handles things like authentication, insurance, storage, and security of these items while creating the tokens that represent ownership of these collectibles.
- Autograph: With some of the top names in pro sports on board, including Tom Brady, Wayne Gretzky, Simone Biles, and Tony Hawk, Autograph’s platform is built around signed, limited-edition collectibles and curated fan experiences.
- OpenSea: The biggest NFT marketplace currently in operation, OpenSea allows brands and individuals to mint, buy, or sell NFTs across multiple blockchains. However, given its size, standing out in a crowd can be an issue, especially for newer brands.
- Nifty Gateway: This platform is a little different in that its unique custodial option lets fans buy NFTs and store them in a Nifty-managed wallet, negating the need for an on-chain solution. This simplifies the onboarding process, though users will be limited to the Nifty Gateway wallet unless the company decides to branch out.
Find out more about top sports NFT marketplaces in the full blog post.
What’s Next for Sports NFTs?
Sports NFTs already represent exciting opportunities for teams, players, and associated brands, but keep in mind that it’s all just getting started. We’re just scratching the surface of what’s possible with blockchain and NFT technology, so we should expect to see the market expand beyond collectibles and into one-of-a-kind experiences for the most dedicated fans:
- Virtual access tokens: Imagine if you could rewatch a memorable game with input from the coaches, almost like a DVD director’s commentary track. This is just one use of virtual access tokens, which pair purchases like NFT game tickets with exclusive perks such as pre-game chats, coach commentary, and footage of training sessions and player interviews.
- Season ticket NFTs: Fans who shell out for season tickets expect to be treated like VIPs. Don’t be surprised if you see exclusive NFT perks minted specifically for the most diehard fans, like tokenized moments from the game or physically backed NFTs with exclusive rewards.
- Fantasy sports: In 2022, the NFL partnered with Mythical Games to develop an NFT-based video game, which is due to launch in 2023. NFL Rivals puts players in the general manager’s seat, much like in fantasy sports; however, they’ll assemble their rosters using collectible NFTs of their favorite players.
Want to know more? Check out The Future of NFTs in Sports: Revenue, Retention, and Fan Engagement.
The sports NFT market is already thriving, and there’s much more to come. If you’re ready to talk about getting your brand on the blockchain and minting some NFTs of your own, get in touch with us now to schedule a demo!