Major League Baseball will significantly expand its nonfungible tokens offerings this fall, partnering with a new company that plans to eschew the highlight-driven NFTs popularized by NBA Top Shot and instead focus on other collectible digital elements, those involved with the project told ESPN.
After months of planning, MLB on Tuesday is expected to announce a deal with Candy Digital to create and sell NFTs, the digital assets that have led to speculative frenzies in the sports and art worlds. Among those running Candy: Fanatics apparel founder and Philadelphia 76ers partner Michael Rubin, cryptocurrency investor Mike Novogratz and Gary Vaynerchuk, the entrepreneur and marketer who also owns a sports-representation agency.
While MLB offers a series of trading-card-style NFTs from Topps, the deal with Candy is expected to include a far broader suite of products.
The first release, on July 4, will be of Lou Gehrig's "Luckiest Man" speech delivered that day 82 years earlier and will be minted just once. Other digital assets, from artistic renderings to tokens for in-person experiences, are expected to roll out on the Ethereum blockchain in the fall and be sold or auctioned on Candy's platform.
As cryptocurrencies' market cap has ballooned to more than $1.5 trillion, sports leagues have looked to leverage the technology that underpins them and carve out a piece of the digital space as both a money-making and marketing play.
"I feel like this is e-commerce 25 years ago," said Rubin, whose company owns a majority stake in Candy. "I'm not just talking about NFTs but leveraging sports [intellectual property] digitally. We sell millions of MLB jerseys a year. Why shouldn't a jersey come with an NFT?
"We haven't even begun to imagine where this can go over time. It's our responsibility to innovate and disrupt this business."
The business' volatility, at least thus far, has mirrored the cryptocurrency market. The Top Shot craze, which saw back-to-back months in February and March of secondary market sales topping $200 million for its NFTs of highlight plays, has cooled off significantly. The estimated value of the best cards has remained stagnant, and the value of others has dipped.
The speculative nature of Top Shot cards didn't convince MLB and Candy to abandon the highlight NFT entirely, but to use it sparingly.
"I think it's a perfect storm of an opportunity," said Vaynerchuk, who recently created NFTs that will allow owners admission into a convention he plans to hold starting next year. "My great hope is Candy is a meaningful engine for interest around baseball. If we do this right, what we can do for baseball is what FIFA the video game did for soccer in America starting in the late '90s and accelerating in the 2000s."
The smart-contract technology that fill the Ethereum blockchain, Vaynerchuk said, provide the best opportunity for baseball to use NFTs with a younger generation of fans likelier to be more fluent in the crypto world and willing to buy into the idea of digital assets. It's not just the highlight itself but the canvas it provides.
For example, take the Chicago White Sox's Yermin Mercedes hitting a home run on a 47 mph, 3-0 pitch from Minnesota Twins Willians Astudillo -- among the most viral moments of the young baseball season. There could be a still photograph NFT. And an artist's rendering. Plus the highlight. And maybe an NFT that offers an opportunity to interact with Mercedes, Astudillo or both.
The NFT, Vaynerchuk believes, can be a mixture of collectibles and real-life opportunities.
"The ultimate goal is to deliver to our fans a product that they're asking for," said MLB chief revenue officer Noah Garden, who negotiated the deal with Candy. "You'll have the harder-to-get 1-of-1s, 5-of-5s, 10-of-10s. But it's important to us to reach all our fans. It's going to give everyone the opportunity to buy something they're going to cherish, just like when I bought my first pack of baseball cards."
Garden, Rubin and Vaynerchuk all spoke wistfully of their days as young baseball fans and how the collectible industry drove them toward the sport. The opportunity to invigorate a new generation, they believe, is there. And NFTs, Vaynerchuk said, can act as entrées to the sport for casual fans looking to expand their fandom.
"Baseball has had a lot of opportunity to do things differently in hindsight," Vaynerchuk said. "But I think there's some momentum. You talk about the [Javier] Baezes and Fernando Tatises of the future. Unlike a decade ago, it feels like the sport is embracing it rather than trying to control it. I'm really taken aback, in a great way, how Tatis is being accepted when Bryce Harper was encouraged to tone it down.
"Is there opportunity for baseball to be more contemporary? Sure. That's the exciting part. Baseball is one of the greatest and most important sports in our society. What's cool about things that have so much legacy is it doesn't take much for the culture and society to embrace it when it does something right."