Major League Sports and NFT Collectibles

Sports NFTs Unlock Fan Engagement

Non-fungible tokens (NFTs) have already made a big impact in the art and gaming sectors, and throughout the world of sports, NFTs are being used to unlock new channels for fan engagement, revenue generation, and creative expression. For example, NFTs are providing a digital update to the long-beloved traditions of trading cards and sports memorabilia, and many of the world’s most watched leagues — like the NBA, NFL, and NHL — are rolling out sports NFTs. These NFTs feature three core characteristics: authenticity, scarcity, and transparency.

Authenticity: When it comes to sports collectibles, authenticity tends to be valued first and foremost. Platforms such as NBA Top Shot and DraftKings offer NFTs with legitimacy, authenticity, and provenance coded right into the asset. These digital assets are practically impossible to counterfeit, damage, or displace, and are publicly verifiable. As a result, collectors can feel increased confidence that their collectibles are legitimate, even if purchased in a secondary market.

Scarcity: In addition to authenticity, official sports NFTs are provably scarce, meaning that there is no ambiguity about the number of any type of asset in circulation. As an example, most NFT trading cards feature an unalterable numbered stamp directly on the card, meaning that it is functionally impossible to create more of each individual asset. Smart contracts help protect against illegitimate supply increases — using the blockchain as verification, collectors can review the smart contracts responsible for creating a specific NFT collection.

Price transparency: Since every NFT has a public record of creation and transaction history that is immutably recorded on a blockchain ledger, collectors can see each asset’s full chain of custody and price history. This is a significant improvement over current standards in non-NFT collectibles, wherein collectors must often rely on potentially spotty ownership records and the word of the seller to determine the potential value of a collectible asset.

The above characteristics are a marked departure from traditional sports memorabilia like baseball cards, which need to be sent out to be graded for their value and must be delicately stored to avoid physical degradation. Additionally, the analog nature of these non-NFT collectibles can make it difficult for prospective buyers and sellers to find one another.

Major Sports Leagues Are Embracing Sports NFTs

NBA NFTs: The National Basketball Association was one of the first sports leagues to launch its own NFT platform — NBA Top Shot — which allows fans to buy, sell, and trade unique NBA NFT tokenized versions of officially licensed video highlights. NBA Top Shot NFTs have steadily gained traction, and several other major sports leagues have launched NFT projects of their own.

NFL NFTs: In September 2021, the National Football League announced an upcoming NFT marketplace platform in partnership with Dapper Labs, the team behind NBA Top Shot. The NFL’s agreement grants Dapper exclusive licensing rights to produce official NFL NFT collectibles on the Flow blockchain. Dapper Labs is currently in the process of building the product, and while few details about it have been released, it appears that fans will be able to collect and own NFL NFTs featuring players and in-game moments.

MLB NFTs: During the spring of 2021, Major League Baseball began a partnership with trading card manufacturer Topps to launch its first line of MLB NFT collectibles. These Topps NFT collectibles are generally designed to resemble Topps’ nostalgic baseball cards. Many of these Topps NFTs also include motion graphics and other digital features. In 2021, the MLB also announced a partnership with Candy Digital to launch a wider range of digital collectibles, such as memorabilia-style MLB NFTs, NFTs of highlight plays, and exclusive artwork immortalizing big moments on the field. The first MLB NFT collection with Candy Digital was headlined by a one-of-a-kind NFT of Lou Gehrig giving his famous "Luckiest Man" speech, and proceeds from the sale were donated to an ALS charity in his honor.

NHL NFTs: While the National Hockey League has yet to launch an NHL NFT marketplace of its own, in July 2021 the Las Vegas Golden Knights NHL team launched its own independent NFT collection composed of seven one-of-a-kind NFTs along with 1,500 additional smaller pieces.  Separately, the Kontinental Hockey League, which consists of member clubs based in Belarus, China, Finland, Latvia, Kazakhstan, and Russia, recently began issuing NFT hockey cards exclusively on the Binance NFT marketplace.