How players make money off NBA Top Shot

How players make money off NBA Top Shot

Business

How players make money off NBA Top Shot

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NBA Top Shot started as a curiosity for players and fans that has rapidly become a trending topic across the country over the past month.

Why pay and try to collect players’ highlights? That’s a question players and fans initially asked when they could go on YouTube and just watch them. Over the past couple of weeks, however, several NBA players have taken up Top Shot as a hobby and learned it can be an investment opportunity while increasing their engagement with fans in the process. Since then, players have tweeted about Top Shot more often, and it’s become a conversation starter on and off the court.

“For some reason, a lot of f*cking moments are against the Pelicans,” New Orleans guard Josh Hart told HoopsHype while laughing. “Either someone scoring against the Pelicans, Rudy Gobert blocking my damn layup, or some bullsh*t like that. We played the Jazz. I think Gobert’s getting into it (Top Shot). He had a dunk. It wasn’t on me, but I was in the general vicinity, and he knows I do Top Shot. He looked at me while we were running back and he said like, ‘There’s a Top Shot moment right there.’ I was like, ‘Ah, f*ck you.’”

A few days later, Hart had a conversation with teammate Zion Williamson that provided a glimpse into the financial impact Top Shot can have.

“We were going through a walkthrough in San Antonio, and somebody was trying to sell me one of Zion’s moments,” Hart explained. “I think he wanted like $7,500 or something like that. I showed Zion the price of how much people are selling his moments and a lot of them were putting astronomical numbers there. The amount of money people spend on his moments is crazy. I showed him that the other day and he was like, ‘What the f*ck?’ Maybe we can get him on there at one point.”

In addition to Hart, HoopsHype spoke with Kings two-time Rookie of the Month Tyrese Haliburton, Hornets guard Terry Rozier, Magic guard Terrence Ross, G League player Malcolm Miller, and others to learn more about Top Shot’s financial impact on the players and how it’s changing the game.

Players are making money through revenue sharing

Josh Hart, New Orleans Pelicans

The NBA and NBPA have a revenue-sharing agreement with Top Shot. For every single moment that’s transacted there, there’s a five percent seller’s fee. That five percent is revenue shared between Top Shot, the NBA, and NBPA. When a player’s moment is sold, the cut is divided across the entire league and not just to that specific player. As a result, there’s no direct financial incentive to the players other than viewing Top Shot moments as investments.

The agreement is no different than the rest of the players’ consumer product licensing. The revenue is derived through the royalties generated from the licensing of the active NBA player IP rights, where active players receive a portion of the royalties generated. As of right now, G League players’ and former NBA players’ IP rights are not being used in the product, so they do not make money off Top Shot.

“I’ve been pretty big on crypto, blockchain technology, and all that type of stuff,” Miller told HoopsHype. “I do see the value in the NFT market, and the fact that it’s backed by the NBA and NBPA, that’s putting some money in players’ pockets. It’s definitely something respectable, and it’s got a lot of pop to it.”

While Miller and other G League players don’t make money off Top Shot their early collection of moments from their colleagues in the league could pay off down the line.

Despite an NBA player not directly getting compensated for the sale of his Top Shot moment, a handful of the players polled believe the revenue will help the league overall amid a global pandemic.

“I think it can help a lot because, with Covid, you’re missing so much in terms of the BRI and all the financial stuff,” Hart told HoopsHype. “You go on here, and you see people buying cards for $50,000. I think the highest one now is $208,000 that’s been sold. They’re setting their own personal records. There are days of $16 million in transactions in a single day. It’s crazy. The league definitely can benefit from the financial aspect of it, especially during this time.”

Some players are investors in the company

Initially, Dapper Labs secured $12 million in a funding round led Spencer Dinwiddie, Andre Iguodala, JaVale McGee, Aaron Gordon, and Garrett Temple. They invested in getting the Top Shot platform off the ground and have options and equity in the success of the platform as a whole. The NBA and NBPA also have that upside, but those players are getting the upside of the evaluation of the company if it goes public. Since the initial investment from Dinwiddie, Iguodala, McGee, Gordon, and Temple, other NBA players have also expressed interest in putting money in the business.

“I think it’s a new era of sports memorabilia and sports trading cards,” Ross told HoopsHype. “I don’t think we’re going to go back to the way it was for years. It’s a new time. Growing up, I used to collect cards. I used to trade them with my friends, and I’d try to get money to go buy big ones and have these rare cards like every other sports fan did growing up. It almost takes the middleman out. It lets you interact with the fan. When I was younger, this would’ve been dope because I’d be able to interact with NBA players. That’s a different type of value when you have that than a card of a guy.”

Today’s NBA players have expanded their business interests in diversified investments more than ever. Iguodala is a board adviser for Zuora, an enterprise software company, and was also an early investor in Zoom. Dinwiddie partnered with Bison Trails, a budding New York-based blockchain enterprise, and also tried to use his contract as a digital investment vehicle before the league denied his request.

Some players are investing in Moments like everybody else

You’ve heard of players being sneakerheads and fans being trading card collectors, so why not officially licensed highlight collectors?

“I got into Top Shot because there was some big buzz around it and it seemed cool,” Rozier told HoopsHype. “But the way the site is growing, I don’t know how you can’t look at it as an investment opportunity. It’s like the stock market, and you get a rush from it, but for anyone involved it’s about making smart investments at the end of the day. You hope your investments pay off.”

Rozier has donated portions of his Top Shot giveaways to his 12 Blessings foundation. Others such as Hart, Haliburton, and Ross have done several giveaways with fans through social media platforms like Twitch.

“I buy a lot of shoes,” Haliburton told HoopsHype. “I explain to my financial advisor, girlfriend, or my brother when I get a side-eye that I can resell them eventually. This is really similar. This has become an addiction. I’m on the website all day. When I buy these moments, nobody gives me the side-eye anymore because they understand that it’s really a long-term investment. We all think Top Shot has very high potential.”

Looking ahead, Hart and Haliburton believe a large group meeting for players with Top Shot, NBA, and NBPA representatives could help answer questions players have such as whether one day a fraction of a moment will be available for purchase? In doing so, they believe it would create more players to participate in Top Shot, more subsequent revenue for everyone involved, and more engagement and profitability for fans as well.

For the latest on NBA Top Shot, click here

You can follow Michael Scotto on Twitter: @MikeAScotto

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