NFTs and Basketball: Slam Dunk or Worthless Junk?

August 25, 2021

Here’s an (almost) philosophical question for any NBA fan: What if you could own “The Block”? 

By The Block, we are referring to one of the most iconic moments in basketball history –  when LeBron James’ seemingly materialised out of thin air to block a layup shot by Andre Iguodala in Game 5 of the 2016 NBA Finals. The Block, as it has come to be known, turned the game on its head in the final two minutes, and helped LeBron and the Cavaliers ultimately secure the most unlikely of NBA Championships against the Golden State Warriors. 

Of course, if anyone could be considered to “own” The Block, it’s James. One of the greatest ever NBA players; it’s just one of the magical moments he has created in his storied career. However, those kinds of moments have come up for sale in the seemingly crazy world of digital art and NFTs (Non-Fungible Tokens). 

To explain a bit more succinctly: Companies like Top Shot have started selling clips of important moments in sport, which are signed digitally by the athlete. Top Shot works in partnership with the NBA (and presumably the players) to sell the video clips to collectors, who will own the clip via a digital certification. A quick browse on Top Shot’s marketplace right now showcases a rare dunk by Kevin Durant. The asking price? A cool $20,000. 

Owning digital moments has become a huge industry

Now, many people reading this will think buyers are out of their minds. After all, I can watch The Block or any other NBA moment I want on YouTube. And, even if I buy it, other people can watch it. Ownership is in name only, therefore. But this whole idea of owning digital sports moments, which are not limited to the NBA, is growing into a huge industry. 

Much of this is linked to the concept of NFTs. You might have seen them in the news recently after someone paid a couple of million dollars to buy the first-ever tweet (sent by Twitter founder Jack Dorsey). More often, NFTs are pieces of digital art. A good example might be a famous meme – let’s say that chef, “Salt Bae”. You can purchase these types of images, receiving a record of your sole ownership through a ledger on the blockchain. 

Like a modern version of trading cards

If we are to find some logic within all of this is that buyers don’t simply want to hang a clip of a Magic Johnson dunk on their (virtual) wall. They consider them an investment. Trading occurs a lot too. You might even consider it somewhat akin to the collecting of trading cards. Some of the old baseball cards still sell for millions. This is a bit like a digital version of that. 

If you were wondering, the record sale (so far) on Top Shot is a James dunk from a game for the Lakers against the Rockets in 2020. The clip shows James emulating a Kobe Bryant reverse dunk, and it sold for $387,600. The average price of a clip is somewhere around $50. 

It’s a fair assumption to say that record will be broken at some point. Top Shot is very astute with its marketing. You cannot simply log on and buy Ray Allen’s iconic 3-pointer from the 2013 NBA Finals. The company drip feeds the customer base, creating anticipation about what will come next. You can be sure that they are planning to release some more iconic moments, and buyers will be busting a gut to pay for them. 

 

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This post was published on August 25, 2021