Posted: July 21, 2021, 9:26 a.m.
Last update on: July 21, 2021, 01:49 a.m.
DraftKings (NASDAQ: DKNG) enters the non-fungible token (NFT) space, announcing plans for DraftKings Marketplace.
The Boston-based games company said DraftKings Marketplace will provide mainstream access to NFTs.
NFT is an emerging digital asset class that is generating a huge buzz and that many interested investors are unsure of how to participate. The platform will also feature “organized NFT drops and support secondary market transactions”. The operator said more details on the market would be released in August.
In a bid to create a splash, DraftKings Marketplace is teaming up with Autograph, an NFT fundraising platform co-founded by Tampa Bay Buccaneers quarterback and seven-time Super Bowl champion Tom Brady. Regardless of the deal with DraftKings, Autograph revealed a content deal with film studio Lionsgate, as well as NFT deals with Tiger Woods, Wayne Gretzky, Derek Jeter, Naomi Osaka, and Tony Hawk.
Autograph’s partnership with Lionsgate could lead to the creation of NFTs based on popular movie franchises, including The Hunger Games, The Expendables, John Wick, The Twilight Saga, and more. DraftKings Marketplace will serve as the exclusive distributor of Autograph NFT content. The financial terms of this arrangement were not disclosed.
DraftKings joins NFT Boom
A non-fungible token (NFT) is a unit of data stored on the blockchain. NFTs can be applied to a variety of digitized items, such as audio and video files, as well as images.
In some cases, NFTs are considered rare digital art forms, with high prices. For example, an artist’s product known as Beeple sold for over $ 69.3 million at a Christie’s auction. DraftKings board member Shalom Meckenzie last month spent $ 11.8 million on the NFT known as “CryptoPunk # 7523” at a Sotheby’s auction.
Several other CryptoPunks have sold for well over $ 1 million, and other Beeple works have ordered multi-million price tags. Sotheby’s sold a digitized artwork by artist “Pak” in April for $ 16.8 million.
Unlike traditional works of art, TVNs cannot be kept or displayed in homes or museums. Still, some art experts view the nascent asset class as disruptive.
“You look at what’s going on in the NFTs and you can kind of see the galleries disappear before you see the NFTs,” famed British contemporary artist Damien Hirst said in an interview with CNBC today.
‘Call option’ for DraftKings
Investors like the idea of DraftKings entering the NFT arena, as highlighted by a gain of more than five percent today for the stock.
Needham analyst Bernie McTernan said DraftKings Marketplace was “an attractive buy option” for DraftKings, especially if $ 10 billion sports memorabilia moves online. He says DraftKings Marketplace could generate one percent to three percent of revenue on every item it sells, which means $ 10 to $ 30 million out of $ 1 billion in sales.
Craig-Hallum analyst Ryan Sigdahl said NFTs are a logical extension for DraftKings. He added that this dovetails with the company’s efforts to become a digital sports and entertainment monolith, not just a betting company.