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If you had asked Philadelphia 76ers president Chris Heck about crypto a year and a half ago, he jokes he would have thought you were talking about a Superman comic.
But cryptocurrency has since become something of a quarantine obsession for the NBA team executive. After spending around a year poring through research on the trend, Heck formulated a three-year plan to turn nonfungible tokens—a digital asset ownership record stored on the blockchain—into a source of revenue and brand awareness.
The 76ers aren’t alone. As a burgeoning craze around NFTs has consumed the media and entertainment worlds, teams, leagues and athletes are exploring how the tech can unlock new markets for memorabilia and marketing. In much the same way sports collectors might buy a rare trading card or an autographed jersey, these efforts find fans who are equally interested in a GIF of LeBron James dunking or a digital poster of soccer star Lionel Messi.
In the 76ers case, the team’s first release will consist of 13 commemorative digital tickets from important games or milestones in the franchise’s history. The collection was created in partnership with the team’s newly signed jersey patch sponsor Crypto.com.
“The way that we planned this out was a three-year run on themes of what the Sixers brand and our fans would find interesting as well as valuable,” Heck said. “We want to have a bit of patience and do this with a long-term vision.”
Most sports organizations are still in the experimental stage, testing out different concepts to see what types of digital collectibles make the most business sense. After New Jersey Devils svp of marketing Jillian Frechette oversaw her team’s project to release the NHL’s first-ever NFTs, she said she received calls from executives at rival teams and other professional leagues seeking advice on how to steer similar campaigns.
Sports NFT projects
The sports world is experimenting with different ways to take collectibles into the virtual realm using NFTs:
- Lionel Messi created the Messiverse crypto art collection, commemorating successes in his career.
- The NFL announced in November that it will attach NFTs to tickets for 21 select games, which can be resold on a Ticketmaster-powered marketplace.
- The NFL and Spanish soccer league La Liga partnered with Dapper Labs in September to create NFT marketplaces similar to Top Shot.
“There’s so many decisions that you need to make, that not everyone’s journey should mirror the next guy’s,” Frechette said.
One thing all these organizations do seem to agree on is the sports NFT space has the potential to become a significant market in the near future. Recent analysis from McKinsey & Company found while overall interest in NFTs has tapered off somewhat since a high point earlier this year, monthly purchases of sports NFTs have continued to grow, indicating a durable market that could be worth $2.5 billion among U.S. buyers alone.
Part of the reason is the sports NFT space has a unique confluence of traditional sports collectors and crypto-enthusiast speculators, according to Ben Vonwiller, head of McKinsey’s global media, entertainment and professional sports practices.
“What was fascinating for us is that these discrete segments saw something totally different in the product or the asset,” Vonwiller said. The trick, he added, is figuring out: “How do I continue to innovate with NFTs to make them more appealing to the biggest slice of sports fans?”
Many sports crypto experts look to the NBA’s Top Shot platform, the league’s marketplace for NFTs of authorized video highlights, as a model example. Launched in 2019 through a partnership with startup Dapper Labs, it has generated nearly $750 million in transaction volume to date.
“Our goal was to create an experience that’s about owning and showcasing NBA fandom,” said Adrienne O’Keeffe, associate vice president of global partnerships at the NBA. “Putting those elements at the forefront and utilizing blockchain behind the scenes was important.”
Joseph Saavedra, CEO and founder of startup Infinite Objects, which turns video clips into physical collectibles sold on NFT markets, said Top Shot has been transformative in making NFTs accessible to fans who might not be familiar with crypto. Infinite Objects counts Dapper Labs as an investor and the NBALAB incubator as a partner, and the startup launched a native integration with Top Shot in late November.
“The NBA is so unique and uniquely positioned in that they like to do experiments,” Saavedra added.
As fans get more acquainted with the idea, Vonwiller said teams could experiment with the products they offer. “You’ll start seeing the sort of blending of these digital assets with real-world experiences,” Vonwiller said. “That starts to get much more interesting in terms of who you can engage with.”
This story first appeared in the Dec. 6, 2021, issue of Adweek magazine. Click here to subscribe.
