By Niovie Constantinou, Contributor
Professional athletes have a relatively short career playing sport, living most of their life off earnings made off the field, which is why commercializing their Name, Image and Likeness (‘NIL’) is important. Athletes have traditionally been commercializing their NIL via endorsement deals and sponsorships by advertising products or becoming brand ambassadors, while as of late, athletes may also commercialize their NIL through the use of NFTs.
NFTs (non-fungible tokens) are unique digital assets that exist on a blockchain and may represent digital or real-world items. Popular NFTs include collectibles such as digital artwork, while NFTs in the sports industry may include limited-edition video clips of sporting moments (such as NBA moments) or player cards. The value of each NFT depends on different factors, such as the prominence of an athlete, the significance of an event, any additional content included within the NFT (e.g. athlete’s signature or commentary), and demand.
Athletes may automatically receive royalty rights each time an NFT which uses the athlete’s NIL (such as merchandise or branded memorabilia) is sold, while they may also mint NFTs (i.e. create digital assets) themselves. Examples of NFTs featuring athletes include a video clip of NBA star Zion Williamson blocking an opposing player’s shot, sending the ball into the stands at the Smoothie King Center in New Orleans and a video clip of LeBron James reverse-windmilling a dunk at the Staples Center in Los Angeles, both sold at over $100,000.
Another popular type of NFT includes the digital trading card, which resembles the traditional player trading cards, an already widespread form of collectible. Recently, an NFT in the form of a digital trading card featuring striker Erling Haaland has been sold for more than $600,000, smashing a record that was set by a similar NFT featuring Cristiano Ronaldo which was sold at auction for $400,312.
On the college level, NFTs have also started gaining popularity after July 2021 when the Supreme Court of the United States ruled against the National Collegiate Athletics Association prohibition on college athletes from monetizing or profiting from their NIL in any form. College athletes can now commercialize their brands via NFTs by selling digital NIL content they produce (be it images, music, videos) across marketplaces using smart contracts. For example, University of Alabama quarterback Bryce Young launched his own NFT of an animated artistic rendering of himself against a backdrop of roses which is currently priced at 0.1 Ethereum, or $477 at the current cryptocurrency exchange rates!
NFTs are proving to be a very inventive way to monetize an athlete’s NIL as they can be utilised in different ways to create multiple streams of income, which is why they have gained huge popularity in 2021. Indeed, famous athletes across the sports spectrum are joining the NFT community, including tennis legend Andy Murray whose NFT representing the moment when he won Wimbledon in 2013 was sold for $177,777 at auction, in addition to the sale of a series of collectibles representing his Wimbledon victory on a platform called WENEW, which sells videos of moments from culture and history in the form of NFTs.
A strong brand is an athlete’s greatest asset and NFTs are offering the means to commercialize that brand more than ever before. Vice versa, NFTs may even help young athletes build their brands by creating and selling digital content, and making it easier to engage with their fans.
How NFTs will unfold in the future remains to be seen, however, they are undeniably a major economic innovation and Blockchain technology is transforming the way we interact and do business. The key takeaway is that athletes are being presented with this exciting opportunity to raise funds for themselves by using their NIL in a new and revolutionary manner!
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