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- A video of LeBron James sells for over $200,000 – helping to hype NFTs
- The market for NFTs has exploded within mere months
- TCould it be the next big market for sports memorabilia?
Heard the hype about NFTs?
What is an NFT?
To give them their proper name – Non-fungible tokens (NFTs) – are, basically, digital items that are sold online using cryptocurrency. It’s as simple as that. An NFT is, in effect, a digital certificate, kind of like a digital barcode, which certifies that a person owns that memorabilia.
The simplest way to think about NFTs is to look at any memorabilia you may have as a sports fan. Own an old, iconic jersey or scarf? An NFT is just a digital version of this.
Examples of NFTs
So we’ve nailed down what an NFT basically is – what do you get if you buy one? Well, let’s look at some examples:
- NBA Top Shot: Launched, officially, by the NBA, Top Shot is an NFT product. The most famous piece of memorabilia which has really established this NFT craze has been LeBron James’ video clip which sold for more than $200,000. Yes, a video clip sold for that much.
- Beeple: Likely the most high-profile NFT artist – Mark Winklemann – otherwise known as Beeple, sold an NFT for $69 million. Before this digital art, Beeple had not sold a physical print above $100.
- Kings of Leon: The rock band became the first music group to launch a new album as an NFT. The album, When You See Yourself, offered fans different products. For example, some versions contained additional audiovisual art, while another offered front-row seats for life.
- Other sports-focused NFTs: The NBA has definitely been ahead of the curve with this market, but other sports are jumping in with both feet. MLB is said to be planning to offer such products to fans, meanwhile French football club Paris Saint Germain (PSG) signed a deal with Sorare to create such NFT products also.
How big is the NFT market?
It really is a hot market right now. The NBA Top Shot product has amassed over $230 million in sales in just seven days.
This is incredible growth, just for one product within NFTs. For example, the entire market value for NFTs in 2018 was $40 million. This year alone there’s been a market cap growth of 1,785%.
What do NFTs mean for sports?
More memorabilia to be sold which means more revenue.
Teams and leagues can move beyond just physical items and offer a plethora of digital products for fans to buy, opening up a completely new revenue stream.
Look at the PSG deal mentioned above. That includes both current starts like Kylian Mbappe, but also former players like David Beckham. The Englishman played for the club back in 2013, which just illustrates how deep into the archives sports teams may be able to delve into to create a huge bank of NFT assets for sale.
Sports teams and leagues could sell footage, art pieces, personalised audio and visual content and a host of other items in the form of NFTs to fans.
The Smart Money Podcast talks about NFTs
NFTs were a topic covered on The Smart Money Podcast – a new monthly podcast from A State Of Mind.
My guest, Colin Watt, and I delved into what the effect this digital memorabilia could have for sports fans. Check the podcast out here (and above) and read more about the launch of The Smart Money here.
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So how big can the NFT market get?
I, like many, many sports fans, love memorabilia. NFTs, for me, are just the logical extension of such memorabilia in the digital era we now live in.
With that in mind, my take is that, like any market, there will always be early adopters, as we’ve seen with the success of the NBA Hot Shot product. It may take NFTs five years, or even a decade, to really jump into the mainstream. However, the simple fact is that sports fans really do have an insatiable thirst for memorabilia and NFTs, at some stage, will just become a regular, accepted form of such memorabilia.
