Joi Garner, executive vice president and general counsel for THINK450, the National Basketball Players Association’s licensing and marketing subsidiary.
Source: Joi Garner
The National Basketball Association and its players’ union will soon capitalize on the rise of NFTs, and union executive Joi Garner is leading one side of the discussions.
The league and the National Basketball Players Association are in negotiations with Dapper Labs to redo a licensing agreement formed in 2019. Dapper is the creator of the popular NFT brand “NBA Top Shot.” Garner is the executive vice president and general counsel for Think450, the licensing and marketing arm for the NBPA. She said the renewal talks has generated interest from players.
“It is probably the most asked about licensing deal (among players),” Garner told CNBC.
Garner, who is the lead negotiator for NBPA deals discussions, couldn’t reveal specifics of the talks with Dapper due to privacy concerns. But she said the union would maximize the value for players as popularity around NFTs increase.
The NBA licenses clips to Dapper Laps, which then digitizes the footage and turns them into a limited amount of NFTs to create scarcity with its Top Shop product. Some NFTs feature highlights in different angles and digital artwork. And many of NFTs are sold out.
In licensing agreements, leagues and unions usually receive a percentage of revenue from the sales of a company’s product featuring intellectual property. And it’s not uncommon for an equity stake to be included in deals, either.
In 2017, the NBA granted players their name, image and likeness rights, allowing the NBPA to coordinate money from the rights, too. Hence, companies need to enter dual agreements with the NBA and the NBPA in licensing deals.
Dapper Labs is valued at more than $7.5 billion after a recent fundraise, according to a report on blockchain news site CoinDesk. In a February CNBC article, the company said over $230 million was generated from NBA Top Shot products.
With those figures out there, the NBPA is getting a good look at the revenue generated. Garner joked she needs to get this agreement right, adding the union hired tech advisors to offer input on the future of NFTs.
“The pressure for that deal is making sure we get the most value possible for the players,” Garner said. “What we don’t want to do is end up holding schmuck insurance,” or taking less money now for a product that’ll generate more in the future.
With a background in contract negotiations, Garner joined the NBPA in 2018 under Think450 president Payne Brown. The unit was established to increase revenue for players using licensing and marketing deals. Most recently, Garner secured union agreements with companies including Kia and DoorDash.
The plan is for Think450 unit to generate $200 million over the next few years, and Garner will play a significant role.
“The goal for Payne when he joined in 2018 was he wanted to double the revenue within five years. That’s a huge goal, but he has not forgotten it, and I haven’t forgotten it, either,” Garner said.
Garner said the NBPA is looking into content distribution deals for three projects, including a documentary surrounding Vince Carter’s last season and the 2020 pandemic season. This documentary will feature behind-the-scenes footage from inside the NBA’s Orlando campus and shot by a production crew used by pop star Beyoncé.
“That story we’re wrapping up and will head into the market with that, soon,” Garner said, adding the film project will conclude with the verdict in the trial of former police officer Derrick Chauvin, who was convicted of murdering George Floyd in May 2020.
Garner is also monitoring the CBD sector for licensing deals but added the NBPA would need to consult with the NBA as products could include marijuana, which is still federally banned, even though states are permitted to legalize.
She said Think450 is in “hyper-growth mode” for the remainder of 2021. Before looking ahead, though, completing the renewal featuring Top Shot is the top priority.
“Messing this one up would not fare well for me,” Garner said. “Everybody is watching. I think the industry is also watching to see how this works out and whether NFTs are here to stay.”