The NBA and NBPA are partnering with the NFT fantasy sports company, hoping to find their next top shot

When NBA Top Shot took off last year, the league was part of one of the first successful mainstream NFT projects. On Wednesday, the NBA moved further into the Web3 world with a new partnership they hope can put a new spin on fantasy sports.

The NBA and NBPA have reached a multi-year 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 several sources with knowledge of the deal.

BREAKING: @Sorare x @NBA x @theNBPA enter into a multi-year partnership to launch the first NFT-based fantasy basketball game. 🏀

Sign up now 👉 pic.twitter.com/IuDYxumAQC

— Sorare (@Sorare) 7 September 2022

The three sides have been talking for nearly a year about a potential deal before reaching an agreement this month. The NBA has agreed to allow Sorare to use its official logos, while the NBPA licensed the players’ name, image and likeness rights to the company.

“We thought this was a very interesting innovation in sports media,” said Scott Kaufman-Ross, the NBA’s senior VP and head of games and new business ventures. 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 will then allow them to use those players in their fantasy lineups. There will be some free tournaments, but Sorare will also create an auction site for NFTs, and a secondary market for resale, much like other NFT collections. Once a player’s NFT is purchased, 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. The 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,” said Michael Meltzer, the company’s head of business development.

Josh Goodstadt, executive director of licensing at Think450, the NBPA’s marketing arm, said the association had been approached on an almost daily basis since 2021 by an NFT company hoping to partner with them and license the players’ NIL rights. After Top Shot, Think450 wanted to do a deal on an NFT project with a gaming utility, but wasn’t sure if he should work with a traditional gaming company or a Web3 company. When 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 the combination of NFTs with fantasy basketball will make it “unique,” and he focused on bringing a utility to NFTs in the world of fantasy sports.

“Offering NFTs, not only from a value point of view, but just also from the gameplay,” he said. “And that tool became very important to us and excites us as well.”

Neither the NBA nor the union were concerned about the volatility in Web3 in recent months. Cryptocurrency prices have fallen this year, and the NFT space remains loosely regulated, allowing for accelerated boom-bust cycles, and sometimes accusations of wrongdoing. Still, recent problems haven’t stopped the NBA from leaning further into deals with Web3 companies.

Web3 has been a financial boon for 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 jersey patch rights for a handful of teams last season.

The Top Shot market has not been immune. On Tuesday, a Top Shot NFT sold for an average of $21.87 over the past seven days, according to dappradar.com. There were 77,000 transactions as of September 8, according to the site, and 8,960 users; in the 24 hours before Tuesday after 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 first few days is to be expected. It is because of that that we have been selective about who we partner with and we have not cooperated with everyone who has come to talk to us.”

Still, Top Shot was undeniably a success, and it showed the league that 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 a different paradigm. Meltzer said Sorare and Top Shot are not analogous, calling his company another use case for NFTs. Goodstadt said the union waited to partner with another NFT company because it first wanted Top Shot to survive on its own.

While Dapper remains an NBA partner, with investments from NBA players as well, this new deal with Sorare will allow the league to continue to find new business in the NFT world.

“We were at the forefront of popularizing the NFT industry together,” said Kaufman-Ross. “But this is a nascent and growing space. And we’re seeing the emergence of different genres within it. As you can probably imagine, we’ve seen a lot of opportunities come across our desk, but we’ve been very thoughtful about where to engage, and we want to make sure that we’re 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 those the product experiences. And we see NFT fantasy as a distinct fan experience, and we think that will complement what we’re doing with Top Shot, right.”

(Photo: Chuck Cook / USA Today)