How sports memorabilia went digital
Sports fans have attached value to physical items — trading cards, framed shirts, cup winners’ medals — for years. But with the rise of NFT collectibles, is the business about to go virtual?
Written by Mattha Busby
Illustration by Lennard Kok
Collecting the ball on the edge of the key, the legendary basketball player LeBron James bounces it once and moves forward, nonchalantly leaving two men for dead.
Now several yards from the hoop, while being fouled, he leaps — switching the ball from his left hand to his right — and the four-time NBA most valuable player ruthlessly dunks, helping the Los Angeles Lakers on their way to a momentous championship in the decisive game of the series.
You can watch this iconic clip and other highlight reels of classic basketball moments on YouTube over and over, for free. Like everyone. But now you can own them, too — through non-fungible tokens (NFTs), digital contracts stored transparently on the blockchain, an open ledger of transactions.
NBA Top Shot buyers, who have collectively spent in excess of $250 million so far, do not own the rights to the highlight itself but, rather, a digital version ranked in a tiered format (common, rare, legendary, platinum ultimate, genesis ultimate) that serves as a means to engineer rarity. That’s a charitable phrase. Others call it manufacturing scarcity — there are fewer digital copies in the higher tiers.
There are just three reels of each moment in the platinum tier and a single one in genesis ultimate. One buyer, @easyaces, was willing to pay $230,000 to have this version of the James clip.
“There is no physical version of a highlight reel, there is only the memory of that moment,” says Sam Smith, a sports collectible expert and broker. “And this is best stored and remembered through digital means. Sure, people can watch the clip on YouTube, but holding an original is desirable for fans and collectors.”
To be a sports fan once consisted of watching and attending games, perhaps wearing a scarf or a jersey, or even owning a piece of rare memorabilia, like a cup winners’ medal. But with the NBA auctioning off reels of legendary moments and an NFL player selling digital NFT collectible cards of his classic Super Bowl moments, enthusiasts can pay to take their fandom to the next level.
“Through a series of factors, someone is attaching a value to something and using currency to establish the underlying worth of the item they are pursuing,” writes NFL columnist Charles Robinson in Yahoo! Sports. “Much like the age-old debate of what makes some collectibles worthless and other collectibles worth hundreds of millions of dollars, it comes down to what the marketplace values, whether it’s Gauguin or Garbage Pail Kids.”
The Dallas Mavericks’ owner, Mark Cuban, believes it could become one of the top three income streams for the NBA, and the company behind the project has been valued at $2.6 billion.
The stage is set for the NFL to follow the NBA and allow people to own digital memories of classic moments. Rob Gronkowski — the running back who caught many incisive throws from quarterback Rob Brady — has already become the first professional athlete in any sport to create their own NFT trading cards.
His drop immediately generated more than $1.2 million, with all but one of his 349 cards selling soon after becoming available. Brady is following his longtime teammate into the NFT space through the creation of a collectibles marketplace, Autograph, which recently raised $170 million in funding and could host innumerable pieces of digital memorabilia.
Is it a fad? A recent report by the management consultants PricewaterhouseCoopers (PwC) suggests NFTs may represent the future of digital assets in sports amid a wider boom in the market that saw one artwork sell at the auction house Christie’s for $69 million in 2021.
Certainly it is a golden — perhaps unprecedented — money-making opportunity for clubs and leagues and it has recently been estimated that five million sports fans would purchase or be gifted an NFT in 2022, with sales expected to double those of 2021. And NBA Top Shot is at the vanguard. Its sales rank second, after the Axie Infinity game, for the most blockchain gaming industry NFT transactions. Whether resale values hold, only time will tell — but similar phenomena, like the 1990s comic book boom and the dotcom bubble, have burst.
There are two strands of value in the collectibles world. The first is perceived economic and resell value. And then there is the value collectors and fans place upon simply wishing to own a piece of history in some way. Items attached to historical events, like a championship-winning F1 grand prix, have an almost tangible value, and their value increases in line with their rarity and the relative significance of the moment.
“There is emotional attachment within ownership of a sports collectible, insomuch as it tells the story of an event that affected you,” Smith explains. Although this has long been more of a North American obsession. The fact the collectibles market in the US is more mature than in the UK and Europe also reflects this.
But apart from the success of Top Shot, the sports industry as a whole may have a long way to go in figuring out exactly what fans and collectors want. In March 2022, the first “NFT drop” by any UK Premier League football club was released by Liverpool FC, in partnership with Sotheby’s, but it was quickly criticised as a failure.
“Dedicated to making NFTs accessible to its entire fanbase, the club has created two categories of digital collectibles — a set of 24 unique ‘Legendary’ 1 of 1 NFTs, and a series of generative ‘Hero Edition’ NFTs that combine multiple player illustrations to produce a unique digital collectible for each fan,” the club said before the auction. (Additionally, 50% of the proceeds would be going to its charitable foundation.)
One week after the drop, only 5% of the digital cards had been sold. The club had already acknowledged that “not all fans” would be ready to traverse the terrain of the NFT world: research it carried out before the auction found that almost a quarter of 18 to 34-year-olds were likely to participate in the drop — suggesting the figures for other age groups were much smaller.
“It feels like the whole thing was thought up and designed in silo, without any real thought as to what might resonate with the fans,” Capital Sport Media chief executive Tim Mangnall wrote in SportBusiness. “What was the club thinking in trying to sell over 170,000? It set the whole project up to fail. Given knowledge about NFTs is still extremely small across the footballing demographic, to think they would sell anything close to this was ridiculous.”
The widely panned episode demonstrates that while digital sports collectibles curated by governing bodies and clubs can be desirable, failures can damage the entire brand and anger fanbases who feel attempts are being made to financially exploit them — particularly when collectibles are awarded places in a seemingly arbitrary hierarchy like packs of collector cards.
“‘The Liverpool way’ doesn’t involve scamming your fans with a Ponzi scheme,” one fan tweeted. “With NFTs you get a link that says you own a JPG using a [flawed] technology.” Another wrote: “Bad decision to continue with these. We were surveyed and plenty of us put forward our view that these NFTs are unethical.”
But with the UK’s top football division, Spain’s LaLiga and Germany’s Bundesliga looking set to launch their own NFT collectible cards, others defended the venture. “Yes, all physical collectibles made by indentured slaves in developing countries is better and more economically friendly shipping them from those developing countries and going into a landfill eventually,” one tweeted.
Roberto Reigada, a security engineer from the blockchain security firm Halborn, says he believes sentimentality can reside in a digital sports collectible, like any NFT, but he is wary of some of the collections coming to market.
“When you have an NFT with very rare and unique attributes, you have a valuable collector’s item and somehow you get attached to it,” he says. “The NFT market has grown a lot in the past two years, but at the moment there are still too many [unscrupulous] people launching projects out there and selling them without delivering on promises made about the collections. There are many people creating NFT projects just to get people’s money.”
Still, people are investing. Jeff French, creator of Blokpax, a company that mints physical sports cards as unique NFTs, has been a collector of sports cards since the 1980s. While the majority of collectors of both physical and digital memorabilia will have an emotional affinity with the items, he surmises, they naturally also hope they will appreciate in value — and most tend to make their purchases accordingly.
“When I’m 80, I can hopefully sell these and they’ll be part of my retirement,” he says. Although some of his physical collections bring him a warm sense of nostalgia — since they include items pertaining to his favourite baseball players — French adds: “It’s not that I love them so much that I would pay $2,000 just to have them.”
He believes sports collectible NFTs are here to stay. “Adoption is absolutely going to come bottom up as younger people move up. But at the same time there are a lot of people in their forties who I do believe will be curious enough.”
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About the author
Mattha Busby is a freelance writer based in Mexico. His work has appeared in the Guardian, the Observer, Vice, GQ, Leafly and other publications. @matthabusby
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