The National Basketball Association and its players’ union will soon benefit from the rise of NFTs and union officials Joi Garner leads one side of the discussions.
The league and the National Basketball Players Association are in negotiations with Dapper Labs to renegotiate a 2019 licensing deal. Dapper is the creator of the popular NFT brand “NBA Top Shot”. Garner is the executive vice president and general counsel for: Think 450, the licensing and marketing division of the NBPA. She said the extension talks have sparked interest among players.
“It’s probably the most requested license agreement [among players]Garner told CNBC.
Garner, the chief negotiator for NBPA deals talks, could not reveal details of the talks with Dapper due to privacy concerns. But she said the union would maximize value to players as the popularity around NFTs grows.
The NBA licenses clips to Dapper Labs, which digitizes them and converts them into a limited number of NFTs to create scarcity of its Top Shot product. Some NFTs include highlights in different angles and digital artwork. And many of the NFTs are sold out.
In licensing agreements, leagues and unions usually receive a percentage of the revenue from the sale of a product from an intellectual property company. And it’s also not uncommon for an equity stake to be included in deals.
In 2017, the NBA granted players their name, image, and likeness rights, which also allowed the NBPA to coordinate money from the rights. Therefore, companies must enter into duplicate agreements with the NBA and the NBPA in licensing agreements.
Dapper Labs is valued at more than $7.5 billion after a recent fundraiser, according to a report on the blockchain news site CoinDesk. In a February CNBC article, the company said more than $230 million was generated from NBA Top Shot products.
With those numbers out there, the NBPA gets a good idea of the revenue generated. Garner joked that she needs to get this deal right, adding that the union had hired technical advisers to provide input on the future of NFTs.
“The pressure for that deal is to make sure we get the most value for the players,” Garner said. “What we don’t want to do is end up with schmuck insurance,” or take less money now for a product that will pay more in the future.
With a background in contract negotiations, Garner joined the NBPA in 2018 under Think450 President Payne Brown. The unit was created to increase revenue for players through licensing and marketing deals. Recently, Garner has entered into union agreements with companies such as Kia and DoorDash.
The plan is that the Think450 unit will generate $200 million in the coming years, and Garner will play a major role.
“The goal for Payne when he joined in 2018 was to double sales within five years. That’s a huge goal, but he hasn’t forgotten it, and I haven’t forgotten it,” said Garner.
Garner said the NBPA is investigating content distribution agreements for three projects, including a documentary about Vince Carter’s last season and the 2020 pandemic season. This documentary features behind-the-scenes footage of the NBA campus in Orlando, shot by a production crew. used by pop star Beyonce.
“We’re wrapping up that story and will be hitting the market shortly,” Garner said, adding that the film project will end with the April 2021 verdict in the trial of former police officer Derek Chauvin, who was convicted of the murder of George Floyd in may 2020.
Garner is also monitoring the CBD industry for licensing deals, but added that the NBPA should consult the NBA because products may contain marijuana, which is still federally banned, although states are allowed to legalize it.
She said that Think450 will be in “hypergrowth mode” for the rest of 2021. Before looking ahead, completing the refresh with Top Shot has the highest priority.
“It wouldn’t be good for me to mess this one up,” Garner said. “Everyone is watching. I think the industry is also watching to see how this plays out and if NFTs are permanent.”
Correction: This article was updated to reflect that former police officer Derek Chauvin was convicted of the murder of George Floyd.