When NBA Top Shot took off last year, the league was a part of one of the first successful mainstream NFT projects. On Wednesday, the NBA stepped further into the Web3 world with a new partnership it hopes can put a new spin on fantasy sports.
The NBA and NBPA have come to a multiyear agreement with Sorare to be their official NFT fantasy partner in a deal that will combine NFTs and fantasy basketball. The contract will give the league equity in Sorare as well, according to multiple sources with knowledge of the deal.
BREAKING: @Sorare x @NBA x @theNBPA enter a multi-year partnership to launch the first NFT-based fantasy basketball game. 🏀
Sign up now 👉 https://t.co/kAYif7bCPI pic.twitter.com/IuDYxumAQC
— Sorare (@Sorare) September 7, 2022
The three sides have been talking for almost a year about a potential deal, before coming to an agreement this month. The NBA has agreed to allow Sorare to use its official logos, while the NBPA licensed its players’ name, image, and likeness rights to the company.
“We thought this was a really interesting innovation in the sports media landscape,” Scott Kaufman-Ross, the NBA’s senior VP and head of gaming and new business ventures told The Athletic. “Both an extension of fantasy basketball as well as a new application for NFTs.”
The deal will put an NFT component into fantasy basketball by asking consumers to buy NFTs of their preferred players, which then allows them to use those players in their fantasy lineups. There will be some free tournaments, but Sorare will also create an auction place for NFTs, and a secondary market for re-sale, much like other NFT collections. Once a player’s NFT is bought, it will remain in the owner’s possession as long as that player is on any team’s active roster.
Sorare already has similar products in global soccer and Major League Baseball. This will allow Sorare to expand its US footprint. Its NBA product is expected to launch this fall, but perhaps not in time for the start of the 2022-23 season, Kaufman-Ross said.
“The NBA was an absolutely critical piece for us,” Michael Meltzer, the company’s head of business development, said.
Josh Goodstadt, the executive VP of licensing at Think450, the NBPA’s marketing arm, said the union had been approached on an almost daily basis since 2021 by an NFT company that hoped to partner with them and license the players’ NIL rights. After Top Shot, Think450 wanted to strike a deal on an NFT project with a gaming utility but wasn’t sure whether to work with a traditional gaming company or a Web3 company. Once Goodstadt and others settled on Web3, they were won over by Sorare’s track record in global soccer, where it has over two million users in 185 countries.
Goodstadt believes that the combination of NFTs with fantasy basketball will make it “unique,” and he focused on bringing a utility to NFTs in the fantasy sports world.
“Offering up the NFTs, not just from the value standpoint, but also just from the gameplay,” he said. “And that utility became really important for us and also really excites us.”
Neither the NBA nor the union were worried by the volatility in Web3 over the last few months. Cryptocurrency prices have tumbled this year, and the NFT space remains loosely regulated, which has allowed for sped-up boom-bust cycles, and occasional accusations of wrongdoing. Yet, recent issues have not stopped the NBA from leaning further into deals with Web3 companies.
Web3 has been a financial boon to sports leagues and teams. The NBA announced a deal with Coinbase last fall. Several teams have sold naming rights to their arenas to crypto companies, and crypto companies bought the rights to a jersey patch for a handful of teams last season.
The Top Shot market has not been immune. As of Tuesday, a Top Shot NFT sold, on average, for $21.87 over the previous seven days, according to dappradar.com, There were 77,000 transactions last Sept. 8, according to the site, and 8,960 users; in the 24 hours preceding Tuesday after that there were 2,421 users and 36,440 transactions.
“We’re still in the early days of this marketplace,” Kaufman-Ross said. “The whole industry is about 18 months old. Some volatility in the early days is to be expected. It’s because of that that we’ve been selective about who are partners and we haven’t partnered with everyone that’s come to talk to us.”
Still, Top Shot was undeniably a success and it showed the league that its fans had an appetite for NFTs, he said. The deal with Sorare, he added, was another way to engage them.
By partnering with Sorare, the NBA and the union are trying to replicate Top Shot’s success but in another paradigm. Meltzer said that Sorare and Top Shot are not analogous, calling his company a different use case for NFTs. Goodstadt said the union waited to partner with another NFT company because it wanted Top Shot to survive on its own, at first.
While Dapper remains an NBA partner, with investments from NBA players as well, this new deal with Sorare will allow the league to keep finding new business in the NFT world.
“We were at the forefront of the popularization of the NFT industry together,” Kaufman-Ross said. “But this is a nascent and growing space. And we’re seeing the emergence of different genres within it. As I’m sure you would imagine, we’ve seen a lot of opportunities come across our desk but we’ve been really thoughtful about where to engage and we want to make sure that we’re being very deliberate and selective with who we partner with in this new and emerging category. And we think this partnership with Sorare is complementary to what we’re doing with Top Shot and that there’s enough differentiation between these product experiences. And we see NFT fantasy as a distinct fan experience and we think it will complement what we’re doing with Top Shot, well.”
(Photo: Chuck Cook / USA Today)
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