Andrew Dana wrote an article in Law.com's Entertainment & Sports Law newsletter about a web of rights in digital sports memorabilia, particularly with non-fungible tokens (NFTs). Andrew provided insights and practical tips for athletes, agents, and others on how to navigate the digital sports memorabilia landscape, including in contract negotiations and disputes. 

"Unlike professional athletes in the National Basketball Association (NBA) and Major League Baseball (MLB), racecar drivers and athletes like them have room to negotiate alongside their agents to gain more benefits from the sale of NFTs," Andrew wrote. "The challenge is how the parties involved find an agreement that can benefit everyone instead of going down a path to a standstill."

"NFTs are those digital objects created by using blockchain technology to mint 'unique' versions of memorabilia, bringing the value created by scarcity of physical objects to the digital realm. With NFTs, there’s a much broader application of creating images of athletes and their sport. In the driving world, for example, there could be an NFT of a racecar crossing the checkered finish line."

"With the rise in popularity of NFTs — and the unique nature of providing fans with another way to interact with the sport— it’s important for athletes to negotiate the best deal possible so they don’t give up too much on the front end. If done right, athletes can benefit from NFTs by promoting their brand as well as the league or series brand. This can expose teams to an entirely new generation of fans."

Andrew's article included insights from a top racetrack executive on the use of NFTs.

NFTs come with a low cost to produce compared to physical collectibles, said Mike Burch, chief operating officer of Speedway Motorsports in Charlotte, NC. With the low cost, Speedway Motorsports can translate an NFT into something tangible in the real world, like a race access pass. Similar to a token at the arcade, an NFT can connect fans to much more than just collectibles.

“NFTs get you membership into a community where you could actually interact and engage with the other people who held this membership,” Burch said. This community, Burch noted, is a great way to build the company’s and series’ brand and image, especially among a younger demographic, who are more open to the idea of NFTs and their potential value.

Subscribers can read the full article here: Web of Rights in Digital Sports Memorabilia

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