Months after they exploded in popularity, sports NFTs remain dominated by NBA Top Shot and a handful of one-off projects from various teams, athletes or media companies. A trio of well-known entrepreneurs are hoping to build a new industry powerhouse.
Fanatics chairman Michael Rubin, cryptocurrency investor Michael Novogratz and digital media entrepreneur Gary Vaynerchuk are teaming up to create Candy Digital, a company that will specialize in virtual collectibles and other NFTs. The platform launched Tuesday with Major League Baseball as its first partner, giving it exclusive rights to digital collectibles released by the league or its 30 teams.
Financial specifics of the partnership weren’t provided. Fanatics will be Candy’s majority shareholder, with Novogratz’s Galaxy Digital and Vaynerchuk as equity partners. Rubin and Novogratz will be co-chairs, and Vaynerchuk will serve on the board.
The group is hoping to capitalize on the growing demand for memorabilia and collectibles. A resurgence of interest for autographs and trading cards has helped fuel a whole new class of digital assets. Barely known six months ago, sports non-fungible tokens (NFTs) are now generating millions in sales.
“NFTs are fundamentally changing how we think about owning cultural artifacts,” Novogratz said. “We’re in the very early stages of this transformation and Candy’s focus on creativity, community and authenticity will all play a key role in its success in defining this new market.”
The company will draw on the specific expertise of its three backers. Through Fanatics, Rubin has built the world’s largest seller of licensed sports apparel, with a customer base of more than 80 million fans that can be pitched on Candy. Novogratz, a former hedge fund manager and fellow billionaire, has become one of Wall Street’s most vocal cryptocurrency advocates. Vaynerchuk is founder of digital media agency VaynerMedia and athlete representation firm VaynerSports, and is also a well-known collectibles enthusiast.
Primary and resale transactions will happen on Candy’s in-house marketplace, which will be separate from the Fanatics ecosystem for apparel, hard goods and traditional memorabilia. The company already has about 20 full-time employees and will continue to build out its team of artists and designers. Candy will utilize Palm, an Ethereum-based ecosystem, as its blockchain technology.
The long-term partnership with MLB will include a marketplace for the purchasing, trading and sharing of all officially licensed baseball NFTs. Any team looking to use its logos or other official MLB marks for NFTs will do so through the Candy platform. Candy is also in active discussions with the MLBPA, which might open the door to future collaborations with athletes (In the past, NFTs dropped by stars like Fernando Tatis Jr. have carefully avoided team logos).
The group’s plan is to start with sports but eventually branch out into digital collectibles that span music, entertainment and other areas of pop culture.