Last Updated on February 3, 2023
This episode, I’m joined by Justin Herzig, co-founder of Own the Moment NFT. He’s schooling me on all things NFT, so if you barely understand what an NFT is, this episode is for you!
Justin gave me some great background on NFTs and then we dove into what they might look like in the college space. Here are some highlights from our talk:
- The definition of an NFT
- How NFT’s can be beneficial for all student athletes
- The impact athletic departments can have on the value of an NFT
- How a player’s NFT can be beneficial in promoting their own content while also not creating tension within their teams.
Justin Herzig is the co-founder of Own the Moment NFT, a venture-backed content and analytics company that helps people invest and collect NFTs with confidence. He has been working in blockchain technology for the past seven years combined with a background in predictive sports analytics.
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We’ve edited the full transcript below to focus on the highlights from the podcast.
I would love it if you would just start with sort of a basic explanation of what an NFT is for those out there who are still struggling to grasp even a big picture idea of what this means.
Yeah, to be honest, if you’re struggling, if you’ve never heard about it, you’re not alone. This is extremely new from an actual product side and what we’ve seen, but at the most basic level–NFT’s “Non-Fungible Tokens–they’re unique, they’re scarce digital assets that are on blockchain or distributed ledger technology. Now, in Layman’s terms, what this allows people to do is truly own a digital image of video or maybe even a song and prove that ownership that digital ownership through the technology.
Okay, so let’s say I work in a college athletic department, and we have a women’s basketball player who has some sort of amazing dunk, and we’ve got this awesome photo of it, or maybe video of it, we probably have both right? How does that become an NFT that can be sold or get promoted or distributed?
Yeah, and there’s a variety of methods. The most basic is just a picture. You have that picture, you can turn that into an NFT, which means you mint it onto a blockchain.
Then those can be sold or given away to your community. But that’s just an image–there’s more opportunities. Let’s say you maybe had the IP, the legal rights to the video format of it, and then you could maybe make a 5-10 second clip and that could be it. Or maybe you want to say you know what, this female basketball player, her sister is actually an amazing artist, and maybe you want to say, let’s find a way to kind of have her sister add some form of unique aspect to this. So you take the picture, and she maybe adds cartoon eyes and some some booms and zing to it, and that can be your NFT. It (NFT’s) really is fully customizable, and anything that you can see basically on your computer, on your phone as an image, that can become an NFT.
I love that idea of collaborating. Like you said, if the player happens to have a sister that’s an artist, but even if not, you know what if you’re on a campus that has a phenomenal art department, and you can find these new ways to coordinate between the athletic department and the art department. I hadn’t even thought about it and those sort of terms. I was still trying to grasp just what we were going to do with the plain old photo. I love that there’s so much space to be creative with this too.
How all athletes can benefit from NFT’s, not just the top 1%
Yeah, 100%. I mean, when I think of NIL on what’s going to be happening, the challenge is not going to be with the 1% of the athletes who are going to be approached by Nike and the major corporations to do their kind of marketing, that’s going to work itself out. The real opportunity is okay, well, what about the 99% of athletes that maybe don’t play in that main large brand sport. How do we provide them with opportunities to ensure that they have those opportunities for other economic incentives?
So I think a great example is the Monmouth basketball team. I think it was maybe three years ago, they became famous during the NCAA tournament, not because of their success on the court, but it was actually what their bench was doing. Their bench became famous for these celebrations, these just over the top team celebrations, and I think if we were in that,post NIL with the regulation, and these individuals were able to kind of profit off of that, what we could see is maybe as a team, those bench players come together, and maybe they work with local artists or something or on the campus and turn those celebrations into small art pieces, something that’s represented. And now we’re giving opportunities to people who don’t have that household name brand, who (student athletes) aren’t the ones who are going to be able to receive their economic opportunity, and I think that continues to go throughout the entire university.
Okay, I have a little NIL seed that I’m gonna plant for people, because I’ve been thinking about this a lot.
Right now, student athletes essentially sign away all of their rights when they join the athletic department in terms of the athletic department’s ability to use their name, image and likeness. But as these monetary opportunities come up, I see a time when student athletes are probably going to start standing up against this, and they’re going to want in on this.
I won’t ask you a question about it, but that’s just the way my brain works. I’m trying to think two and three steps ahead to what this is going to look like down the road, but let’s go back to the example we had of just a photo.
When you were explaining the photo and you were talking about having a series of say 100 (NFT’s), that reminds me a lot of the art world that somebody owns the original painting, but there’s probably all sorts of prints that are made in series, and sometimes those are hand signed, sometimes they are embellished by the artist himself. It kind of reminds me of that except this is all going to be happening digitally right there. There are no physical assets when it comes to NFT’s correct?
Right, and this is just the evolution of what technology can do. You use art as an example. When we think back to the very, very early days of art, it was people writing on caves. There could only ever be one of those, and then you get into lithographs and you get into these other forms, maybe even the printing press Okay, now we can make physical copies of it–now we’re able to distribute it to people because you don’t have to actually go to the cave to see that art. Then, we get to the place of now we can take photographs of it, but the difference with photographs is you can’t truly own the art through that photograph. As we have the ability, you can just copy and paste and we all still see the Mona Lisa on our computer.
The next technology advancement is the blockchain, the distributed ledger technology which provides that provenance we call it the tracking of ownership from when it first minted and became in the blockchain all the way through its lifecycle and when it was sold to the first person gifted to someone else transacted but at the most basic level.
As you said, you can take that one piece and we can determine how many of them we mint, and everyone can see how many there are. So unlike the 1990’s when the physical sports card market just kind of tanked itself because they printed millions and millions of cards, and no one knew how many there were, we have the full transparency to know exactly how scarce a digital asset is, how scarce that NFT actually is.
Advice for Athletic Departments
Let’s go back to this example. We’ve got a women’s basketball player, great dunk, this is the photo we’ve got. If I (the athletic department) know at the moment, this is going to be an incredible thing for us to use as an NFT, does that mean that I should not put it out on our social media feed? Does it limit what the athletic department can do with the photo or video?
No, it’s up to the athletic department. Some of the most popular NFT’s these days have been people actually NFTing some of the most popular memes.
So let’s say there was a girl who took a funny picture, and that (picture) went crazy on the internet 10 years ago, that’s a meme, she’s actually been able to sell that meme. And why are people buying it? Because it’s very familiar. So just because it was publicly out there doesn’t mean it can’t still turn into an NFT and you get ownership of it.
But I think the athletic departments kind of, they can play the game as they like. (For example) Maybe they’re going to have a booster auction, and they say we’re selling you never before seen interviews, never before seen pictures, footage, and maybe that adds value. Or the other side is, maybe it was a game-winning play, and that becomes the image of that team for that year. Because more people are familiar with it, the athletic department will have more of an opportunity to probably sell that to a popular crowd.
Okay, here’s another question I just thought up. I’m the one who takes the photo, and I have the intellectual property rights. If it becomes an NFT, and it gets sold to a random fan, who owns the legal rights to this photo now? Have I now given up all his legal rights, because it’s exclusively owned by the fan who bought the NFT?
Yeah, this is still probably going to play out in the courts, and we haven’t seen a true determination on this. But what we have seen are some artists who are actually saying and building it into the smart contract when they sell the NFT that you have the rights to sell this for profit, to turn it into merchandise, to reproduce it if you want– they’re (the artists) actually building in and saying I am selling you the rights to this.
I think right now most people are defaulting on unless that is kind of built in, it is still the intellectual property of the artist. Just like if I bought a Picasso, I own that Picasso, But if he wants to make reprints of that same one, it’s his intellectual property.
Education, decision making and implementation
If I’m in the athletic department, and I want to start getting involved in this (NFT’s), what is sort of that first step? How do you start creating NFT’s? How do you sell them? What would this process sort of look like?
Yeah, so first off, I think it’s important to note if college athletic programs are not proactive in this space, they risk their athletes damaging their personal reputation. The schools risk their athletes being taken advantage of by predatory individuals. They risk having their athletes distracted from their studies in sport due to kind of trying to reverse their entities on their own.
So I completely agree with you. I think especially with NIL, universities need to be proactive on this with the athletes. When we think of a path forward, I think there’s three key elements: Education, decision making and implementation.
So first, education. It’s about understanding how to create the NFT’s the right way because we’ve seen NFT projects that came across as cash grabs, and unfortunately, weren’t successful. We’ve also seen some that were able to succeed because they’ve been able to truly connect to the fans and build a community, and that’s really key in making sure that not only is the university, but also the athletes have that level of expectation.
The second element is decision making. I think the hard truth is that not every athlete is going to have that brand recognition and that following to successfully market themselves or sell NFT’s.
Athletes have unique ways to connect with their community
However, that doesn’t mean they have to be left out because there are opportunities with NFT’s to create offerings for an entire team, for maybe finding their individual skill sets.
Athletes today are more than just what they’re putting on the field, and so there’s unique ways to continue to connect with your community through the NFT’s. So I think the universities are helping the athletes understand to craft that story, let them really own their own image and brand. I think it’s huge.
The third one is implementation. This is where you were asking about the actual technology. How does this work? It’s not the most difficult thing, but this is also coming from someone who’s been in blockchain technology for seven years. I honestly think universities are going to have preferred strategic implementation partners that they’ve developed trusted relationships with, and it’s going to increase the ease of delivery and likelihood of success for those college athletes as well as their larger NFT’s.
You can incorporate a level of design artistry. The implementation, the technology, and then as we said at the end, how do you actually build and manage that community, so this isn’t just seen as a cash grab.
How can we use NFT’s to create an additional utility to tie fans and athletes together?
Kind of switching over, because we’ve seen this happen. We’ve seen professional sports get more involved in this quicker. What have you seen happening at the professional sports level in the US or otherwise that you think college athletic departments could learn from things that have worked? Or maybe, what things did not work?
Yeah, so you start off with the organization. When we think of sports collectibles, we think of NFT’s, NBA Top Shot is the largest market, it’s the most popular. They’ve had over $700 million in revenue.
What they’ve really been able to do is tap into an existing fan base of the NBA and they’ve made it a very easy onboarding experience. They’re not putting the technology at the front, they’re putting the product first. So the majority of customers don’t have to even know that this blockchain technology is working behind the scenes–rather, what they see is this really cool experience of watching a highlight of a player they like. I think that’s one thing that universities will want to focus on.
Yes, the technology is complex, and it needs to be incorporated, but the people who are buying it don’t care about the technology. They (the consumers) care about the cool experience.They care about seeing something that is in their collection.
Today, a digital method of fandom is about more than just your physical assets. So why should I not be able to show you on my phone?
Finding a way to bring additional utility to these NFT’s is the great divide. It’s the real way to connect the community and the fans with the university. So let’s say that woman college basketball player that you talked about, she’s got that picture, and they’re gonna make 100 of them (NFT’s). Maybe you say, hey, we’re going to add additional utility, if you buy one of these NFT’s, you’ll also get to attend maybe a meet and greet–or maybe you get a ticket to one of the random games, but some real world asset that kind of ties us together, and at the end of the day, is just another way to kind of express and experience my fanhood.
What does the average NFT buyer look like?
I would call them super fans. It’s super fans of whatever the topic is. In the art world, it’s people who are kind of at the leading edge and the front edge of art, and they’re the ones that really want to get involved.
In the sports collectible, if I see Rob Gronkowski selling his NFT’s, the people who are buying are the ones who are very big fans of Rob Gronkowski. Justin Blau is a musician, EDM artist, the people who are buying that are the ones who are super fans of that individual, and I think that is a good frame of reference for what universities should expect as well.
Is it age limited? I’m kind of curious, from an age perspective, what does that look like so far?
Yeah, I would guess it’s predominantly (ages) 18 to 45. But again, it’s all about the experience that you’re building. Obviously, you need to have some level of tech savvy and you have a desire to buy something that has a computer. So you have to be able to access email and stuff like that, but beyond that, this isn’t dependent or locked into any age range. There’s no need to be able to have this level of computer tech savvy knowledge or desire to go play some kind of video game. If you can see a picture of your grandchildren, you can own an NFT.
As we think about student athletes potentially becoming the creators of this content, can you create an NFT from social media content?
Yeah, any video can be turned into an NFT, ideally from a GIF which is usually just a couple seconds to maybe a clip that’s maybe 10 to 15 (seconds). Those are digital assets. and they can be turned into digital assets. Any of these videos with your phone can easily be turned into an NFT.
I know when I go in and talk to student athletes about monetizing their name, image and likeness, I want to find ways for them to be efficient with their time instead of creating new work for them. And I know when I do it, I’m always trying to figure out how if I create it (content) on one platform, how can I move it and put it on the other platform? I want to shoot one video and put it on Tick Tock and on Instagram, because I don’t have time to shoot two separate ones.
Yes. So that Fleetwood Mac video that went viral where he’s skateboarding, he sold that as an NFT. That one sold for $500,000. As we said, before, they made it in their original medium for TikTok, it went kind of viral. I think TikTok even used it in a TV advertisement.
Overall, it’s hard to profit off these kinds of social media. This allowed him that opportunity and some huge fan of either Fleetwood Mac, or just pop culture, bought it and gotta own that piece of history.
I’m thinking there must be other people out there that have this question. If something like that is on social media, and I can essentially go watch it anytime I want, why would I want to own the NFT of it?
You know, we use the example of Honus Wagner is the most expensive, famous baseball card from almost 100 years ago. I could go Google that right now, and I can see it (the card), but I don’t own it. The ownership aspect is what’s different, and that allows not only as a speculative asset, but also to show this is legitimate, I truly own this digital asset. When we go back to the whole being authentic, and fandom and kind of showing off your kind your digital persona, that goes a long way.
Yeah, and I have to bring on Darren so I can quiz him about who has the rights to license it (the NFT) and they know that that’s all still developing. Until there’s case law around that none of us are going to know exactly how that’s going to go.
I mean, we still see cases coming up over whether or not you can embed someone else’s tweet in your blog post to talk about it, and obviously, that kind of social media content has been around for years, and that kind of stuff is still being resolved in court. So I’m sure it’ll be quite some time before we have straight answers.
Athletes can create their own content through NFT’s
I think one creative opportunity there is that you can use Lamelo Ball as an example. So with “NBA Top Shot,” any of Lamelo Ball’s highlights are available as a “top shot moment,” because that’s a partnership with Dapper Labs, the NBA and the NBA Players Association. Lamelo Ball also wanted to create his own NFT project for his rookie season.
So what he did is he worked with an artist to create sculptures of him. Now, those sculptures don’t have anything about the NBA, they don’t have anything about his team, so he’s able to sell those without any intellectual property issues because it’s just sculptures of him holding a basketball and doing some cool things like that. That allows you to completely avoid any IP issue, obviously any friction between him and his team in the NBA. I think that’s a great way that individuals can kind of continue to go about this.
Okay, that makes sense. Flipping to sort of the other side of this, can you talk through a little bit about what sort of due diligence you need to do or what the benefits and risks are in becoming one of the buyers of these NFT’s?
Yeah, and so that’s actually one of the reasons why we founded our company at the moment of NFT. Because we understand that while this is a rapidly growing, very exciting and opportunistic market, it’s also still very complex and our goal is to really provide you with that roadmap for your journey.
It really starts off with discovery. It starts off with, how do I even find out about these projects? Because a lot of the time, if you’re just waiting on Twitter, and it’s after the project gets popular, you may have missed out on those early sales and the early opportunity.
Then there’s the aspects around education. How do we identify which of the projects are legitimate and have a long-term standing viability, and which are the ones that are maybe just unfortunately a cash grab.
Then there’s aspects around insights and data. Okay, maybe I didn’t get a chance to buy these when they first were released from the athlete or the school or the team, but I’m still interested. So being able to see and track what were the prices of those and how’s the price movement shifted?
NFT’s creating a unified community?
The last one is around community. There’s such a strong community development and engagement in this space, and I think a lot of it is really because you just have such passion and interest around this space. But also, in order for you to be able to collect in a project, there needs to be people who are still interested in it in 5-10 years, and the way that that has happened is through community.
So I think we’ve seen so many people joining these communities, learning from each other, they almost become like these self help havens where people can kind of ask questions, increase their confidence before they’re willing to kind of go into that next project and actually make some purchases.
Do you think this changes the market for physical memorabilia? Or is it two totally different people that would buy physical memorabilia versus an NFT?
Yeah, that’s a great question. And no matter what you answer here, you’re gonna make someone happy and piss someone else off.
I think at least for the short term, we’re going to see opportunities with both. I think for people who are getting into sports collectibles, as digital, I’ve seen a lot of them want to get into this card market that I hadn’t previously been into, and then I think long term though, if I’m a betting man, without a doubt, I’m going to go for the digital version, because that’s going to have more long standing power than kind of where our world is going. But on the other hand, that means that these physical assets are going to be maybe more scarce, they may retain an increased value long term too. So I think personally, there’s opportunity for both, and just like with the art world, just because we’ve seen this $69 million sales for digital art, that doesn’t mean the physical art is just going to disappear.
So I have not purchased my first NFT yet, but I’m starting to get on board. Now that we’ve talked about it more, and I’m wrapping my head around it a little more I’m getting there. Is there anything you have on your radar that you’re kind of watching for or anticipating when it comes to NFT’s within the sports industry?
I think we’ve seen with Dapper Labs and Top Shot, they’re their MVP, their minimal viable product. They already have deals with the UFC, they have deals with Dr. Seuss from an art perspective, and there’s speculation that they may join into deals with some of the other major sport organizations as well.
And, you know, we are just extremely passionate about this and really want to focus on how we can kind of help with a level of education and help with that level of community through content and such. So as these new projects really start to appear, I think it’s going to bring in a wealth of new people who are Nope, haven’t made that first NFT purchase, but once they do have a feeling they’ll stick.
Thanks to my intern Will Whitmore for assistance with this episode.