Top Shot and the Potential of Digital Collectibles

Though it’s been a busy stretch for the basketball world the WNBA free agency shuffle brightened the offseason, while their male counterparts hit the midway point in their season with an All-Star break in Atlanta—the hoops conversation has been dominated by one thing: NBA Top Shot. The crypto-collectible has taken the world of sports memorabilia by storm, not unlike, well, the Seattle Storm, who won all six of their postseason games on their way to last year’s championship.

So, before we get to its connection to the W: what is NBA Top Shot, and how does it work? Dapper Labs, the company behind it all, has created this NFT (non-fungible token) marketplace and economy. In essence, a Top Shot “Moment” is just thatan isolated play from a basketball game in the form of a short multi-angled video clip bookended by flashy graphics and statistical context. Like trading cards, there are pack drops that start at $9 (though special limited collections go for more); these packs contain between three and five randomized highlights. Your Moments then end up in your virtual wallet; from there, you can buy, sell, trade, or gift them to others via the digital marketplace. 

I’m sure many of you have experiencedor are currently experiencingthe initial confusion surrounding this business. Do your eyes glaze over, like mine do, when you hear the phrase “blockchain technology”? Plus, the Moments themselves. Why pay hundreds, or thousands, or tens of thousands on a 12-second highlight you can find for free online? I’ve spent hours watching and extracting individual plays from WNBA.com for articleswhy would I pay for that?

Well, it’s as simple as this: something has value if people believe it does. Money is abstract, as we’ve seen in recent stock market runs or record-setting baseball card sales. This Mark Cuban blog post helped me understand why digital assets are not just a logical continuation of sports memorabilia collection, but an improvement:

 When you collect stamps or cards, you have to worry about getting them graded. Is it mint condition? You have to store them and maintain their current physical state. You need to protect them and keep them safe. When you want to sell them, you need to physically deliver them, which entails considerable risk during shipping. Because much of the industry is person-to-person, there are a variety of other risks and costs introduced into the system as well. All of these are expensive, time consuming, risk increasing, and annoying.

With a digital trading Moment on NBA Top Shot as an example, you have all the fun, none of those risks, and the value is still set by the same laws of supply and demand… Some people might complain that I can get the same video on the internet anywhere any time and watch it. Well guess what, I can get the same picture on any traditional, physical card on the internet and print it out, and that doesn’t change the value of the card.

I’d also recommend this episode of ESPN Daily with Pablo Torre and guest Brian Windhorst, which further contextualizes the new platform (and cemented my desire to jump onto a queue). In the weeks since pitching this story, I’ve been lucky enough to snag a few packs of my own, and I’ll admit to taking vigorous swigs of the Kool-Aid. (“For research!” I’ll tell myself until this piece goes live, and then I’ll find another way to rationalize.) 

Money has been moving, with more than $230 million in transactions since October 2020. A single LeBron James highlight sold for $208,000, or, in other words, more than a WNBA max contract. Pack openings and primetime segments have quickly become the norm. Already, #NBATopShotThis is a trend, both on Twitter and during in-game broadcasts. Is this a passing fad, or is it the next big thing?

Renee Montgomery, co-owner of the Atlanta Dream, believes in the potential of the crypto-collectible. “Top Shot came onto the scene and took it over.” she told Winsidr. In fact, Montgomery has seen the frenzied fandom firsthand. “I opened my pack on my podcast, Remotely Renee, and shot up to #18 in the technology category on Apple podcasts. Can’t wait to own my own moment!” The one-minute clip revealing the cards contained in her pack has, as of this writing, totaled more than 28.7k views on Twitter.

While there have been rumbles about the W joining the digital collectible game, potentially as soon as July 2021, they’re still just rumors for now. I hopped on stage in a Clubhouse room last week when I noticed Dapper Labs CEO, Roham Gharegozlou, participating in a panel, and I asked if anything concrete was in the works. While he stated enthusiastically that they loved the W, he hit me with a corporate “no comment.”

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Some athletes in the W, like Crystal Dangerfield of the Minnesota Lynx, are excited about the potential of the blockchain blockbuster. “I absolutely think the WNBA can and should aim for a partnership,” the 2020 Rookie of the Year told Winsidr. “The audience is definitely there. We’re always pushing for extra exposure and I think Top Shot is where we should look for an opportunity next.” Dangerfield and Montgomery are the first two women to be designated Certified Ballers on Top Shot, joining a list which, like a blue checkmark, showcases and authenticates the athletes participating on the site, and allows collectors easy navigation into the assets that fill their digital wallet.

 

 

As a potential revenue stream, what would this do for the WNBA? The deal with the NBA is the blueprint. With each transaction on the marketplace, there’s a five-percent seller’s fee. That rake, per the licensing agreement, is split three ways, between Top Shot, the NBA, and the NBPA. So, hypothetically, if Diana Taurasi’s Moments are selling at a premium rate, she’s not the direct (or sole) benefactor. There’s an equal trickle down to each athlete in the W. 

Another benefit here could be finding an untapped selection of basketball fans that have already bought into the Top Shot community on the men’s side, hobbyists that have decided this is the next wave of sports collectibles. Per data gathered by Zoomph, women’s sports excelled in engagement rate in 2020, with the NWSL and WNBA topping all sports during pandemic-altered play.


 “At a time when sports continue to shed live viewers, the WNBA’s numbers this year shows they still have not hit their ceiling,” Brendon Kleen wrote for Forbes. “More people tuned into the biggest WNBA games this year, even with many more options than usual. When fans weren’t tuned in, they engaged with social content in record numbers.”

On the part of fans, there’s a direct correlation between digital engagement and financial investment. Anya Packer, a former hockey player and current board member of the NWHLPA, spoke to this last month during Chrissi Sanders’ Women in Sports Business panel, noting that while there are fewer women’s sports fans, the level of dedication from each laps the field. That, in turn, leads to money spent on merchandise and tickets. The hope is that these engagement rates are also the metrics that attract brands to invest in associations like these. You can be sure that the WNBA and its players association, with its strong messaging and integrity, will be discerning before jumping at any opportunity.

“I think something like [Top Shot] would be really dope for our league,” said Washington Mystics star Natasha Cloud. She did, however, mention that the unparalleled access to the players is something that is important to her. “As much as we want to be involved with our NBA counterparts, it might not be our top priority. The coolest part of our league is if you’re a fan, you can really get to know us, so something more intimate might be better for us first.”

 

If the day of the digital collectible has dawned, as Alexis Ohanian and so many others believe, the W would do well to catch some of its glow. Could a Vandersloot assist or an Arike stepback go for hundredsor thousandsof dollars? Perhaps, when the season tips off in a few short months, we’ll see LaChina Robinson running through halftime highlights during a national broadcast, while a #WNBATopShotThis chyron fills out the screen.

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