Big money in fastrising new NBA marketplace
Slickly packaged highlight videos bought, sold like shares of stock
To convey NBA Top Shot’s abrupt ascent, from idle curiosity to fullfledged phenomenon, consider how Warriors guard Damion Lee connected with Charlotte’s Terry Rozier before the teams met Feb. 26 in San Francisco.
Lee didn’t text Rozier or discreetly suggest they trade jerseys after the game, a custom among friendly NBA adversaries. Lee tagged his fellow Louisville alum in a Twitter post and asked about swapping Top Shot “moments.” Rozier quickly tweeted back his agreement.
This exchange — two players openly embracing a nascent digital marketplace, where slickly packaged highlight videos are bought and sold like trading cards or shares of stock — resonated with basketball fans such as
“If you like bobbleheads or trading cards, it’s a very logical step.” Kirk Lacob,
Warriors executive vice president
Stephen Cameron. He’s a marketingcontent producer and Alameda resident in his early 30s who grew up in Orlando following the Magic.
A selfdescribed NBA junkie, Cameron heard about Top Shot near the end of last year, soon after it launched, and began acquiring some of the videos running 5to15 seconds. Cameron bought a KarlAnthony Towns moment, followed by John Collins and Eric Gordon. Cameron flipped all three for a modest profit.
“This felt like investing in a sport I know,” Cameron said.
Then he struck a minijackpot: Cameron drew a good spot in Top Shot’s digital line, purchased a “rare pack” for $229 and discovered one of the moments in his pack was a LeBron James dunk, with a low serial number (enhancing its value), in the AllStar Game. The lowest asking price for that dunk stood at $1,740 on Monday, though Cameron is holding on to it and hoping the price will rise.
He’s hardly alone in his strategic maneuvering, and nowhere near the biggest beneficiary of this Top Shot craze. One of Cameron’s Florida friends, Adam Papageorgiou, turned $875 of small purchases into more than $10,000. Papageorgiou knows another Top Shot enthusiast who put in $9,000 and already has accumulated more than $1 million — and another who invested $330,000 and now has a portfolio worth “tens of millions,” according to Papageorgiou.
These eyecatching numbers help explain why people are drawn to Top Shot (nbatopshot.com), a venture between the NBA, its players association and Dapper Labs, a Vancouverbased company.
Still, the website’s wild success sparks natural, skeptical questions. Namely, how can a digital highlight be worth money when videos of these moments easily can be found and shared online? And how can you own it when there’s no hard copy?
The key is a technology called blockchain, a digital ledger that enables cryptocurrency transactions. That’s what makes each Top Shot highlight a unique asset and gives it monetary value — along with a public record showing previous transactions (including users and amounts), potentially increasing the value of highlights owned and traded by NBA players themselves.
The whole process blends elements of physical trading cards, fantasy sports, eBay and the stock market, at a time when memorabilia is booming. An autographed Luka Doncic rookie card sold for $4.6 million in February (the most expensive basketball trading card ever), not long after a 1952 Mickey Mantle rookie card went for $5.2 million (the most for any sports card).
Or contemplate this: Mike Winkelmann, an artist known as Beeple, sold one of his digital artworks for $69.3 million last month. That set a record for nonfungible tokens (NFTs), which are digital assets verified using the blockchain technology.
Top Shot assets haven’t reached that staggering realm, but the marketplace is quickly expanding. The site has generated more than $491 million in sales on about 3.2 million transactions (as of Monday), including nearly $190 million and 1.3 million transactions in the past 30 days, according to cryptoslam.io, a website tracking NFTs.
Most notably, one LeBron James dunk “moment” (not the one Cameron purchased) sold last month for $208,000. (A common pack of nine moments sells for $9).
So what’s driving the appeal of these digital collectibles? The answer parallels physical trading cards, Top Shot users said, hinging mostly on scarcity, the “cool” factor and snazzy digital packaging.
Plus, as Warriors executive vice president of basketball operations Kirk Lacob put it, the new generation values online communities such as Top Shot.
“If you like bobbleheads or trading cards, it’s a very logical step,” Lacob said. “You get to own something that’s collectible and relatable to the game. … It’s a way to connect with the NBA in a different way.”
Even so, there’s a segment of the digital crowd wondering if this is all a big investment bubble destined to burst. Winkelmann/Beeple used the “bubble” word on “Fox News Sunday,” comparing the turbocharged digitalart marketplace to the early days of the internet.
But basketball fans, at least for now, are captivated by their shiny new toy. Ros GoldOnwude, the former Stanford guard turned ESPN sideline reporter, acknowledged on the “Roundball Roundup” podcast that Top Shot makes her feel like she’s buying stock in rising young stars, hoping to make a profit as they ascend and their moments become more valuable.
That’s also why Warriors forward Eric Paschall, in a Chronicle interview, said he’s trying to buy James Wiseman moments, because he expects his young teammate to become a “superstar in this league.”
Meantime, NBA fans such as Taylor Stein find themselves engrossed with Top Shot for both the collectible element and investment possibilities. Stein grew up in San Rafael as an avid Warriors fan, often going to games with his dad (formerly the team chiropractor).
Stein, now a data scientist for a San Francisco company, writes a weekly newsletter analyzing Top Shot happenings. He’s also a frequent user, already turning $3,000 into nearly $34,000. Stein predictably picked up a couple Stephen Curry moments, then secured young players with AllStar potential (such as Wiseman and Denver’s Michael Porter Jr.) to hold longterm.
As Stein quickly discovered, Top Shot traders covet “flash” and promise more than allaround skills. So productive players such as Draymond Green or Khris Middleton aren’t as valuable as, say, LaMelo Ball or Anthony Edwards.
And fans, not general managers, determine value in this world.
“I’m a diehard Warriors fan and NBA fan in general,” Stein said. “I’ve always thought it’s interesting how NBA fans have strong opinions, but there’s nothing you can really do with that.
“This opens some doors where you can put your money where your mouth is and invest in someone’s future. … It all comes back to the appeal among users, and that’s something you can’t measure on the stat sheet.”
Top Shot no doubt benefits from its partnership with the league and players association, legitimizing the idea to some extent. Dapper Labs announced $305 million in new funding last Tuesday, with investors including Michael Jordan and Kevin Durant. At least six active players beyond Durant — including Klay Thompson, former Warriors Andre Iguodala and JaVale McGee and MittySan Jose alum Aaron Gordon — also have invested in Top Shot.
There have been notable glitches, from long virtual lines when packs of moments become available to most users being unable to withdraw money from their accounts for now. But players such as Damion Lee remain “fascinated” by the concept.
Lee is still working on his Top Shot trade with Rozier.
“It will be pretty dope down the line, whether I trade the moment or sell it or gift it to someone else,” Lee said. “They’ll have a moment, whether it’s myself or Terry, that was once owned by us — and then they can pay it forward to another fan.”
Another example of Top Shot’s impact surfaced March 27, after Sacramento’s Harrison Barnes made an improbable, buzzerbeating, gamewinning shot against Cleveland. As Barnes did a postgame television interview on the court, teammate Tyrese Haliburton sneaked up from behind and poured water on Barnes in celebration.
“HB!” Haliburton excitedly shouted. “Put that on Top Shot!”