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Ice Cube’s basketball league plans $66m blockchain, NFT ownership sale


American three-on-three basketball league Big3 is planning a decentralized team ownership approach for its twelve teams, which the league has owned to date. Big3 was co-founded by Ice Cube and media executive Jeff Kwatinetz and plans to sell stakes in the teams as digital assets bringing in up to $66 million.

A total of 1,000 tokens per team will be available, with twenty-five tokens priced at $25,000 and the remaining 975 at $5,000 each. Both editions will give owners access to some voting rights, gameday experiences, other VIP perks and NFTs. The more expensive token will also provide exclusive intellectual property (IP) and licensing rights for the teams’ names, merchandise, and other commercial opportunities. Plus, token owners will get a percentage of any future team sale and they can sell their stake in the team.

“When we founded the BIG3 five seasons ago, our mission was to build a league that was innovative and created opportunities for players and fans alike that other leagues lack,” said BIG3 co-founder, Jeff Kwatinetz. “We are thrilled to be lowering the barrier to entry to team ownership so our fans can take their investment to the next level.”

“While other leagues are flirting with fan ownership, none of them have more meat on the bone than BIG3 team owners,” added Ice Cube.

Fan tokens versus ownership

Full details of the offering have not yet been shared, so the level of ownership is unclear. Another question is how Big3 will deal with the legal aspects to avoid the basketball tokens being considered a security. But there’s undoubtedly a plan as Kwatinetz is a lawyer. We guess that the more expensive tokens may offer a greater level of ownership and might be classed as securities within some legal exemptions. 

To date, teams in major sports leagues have been involved in NFT collectibles but have avoided issuing fan tokens, even if some have a relationship with fan token platform Socios. The NFL has outright banned fan tokens. These digital assets typically provide basic perks and the right to vote on inconsequential team decisions, but their price point is typically less than $20. The $5,000 Big3 tokens sound similar to fan tokens, although with far better rewards than typically offered.

IP rights

It’s an innovative move to allow the more expensive token holders to exploit the team’s IP and commercial rights, which could influence its marketable value and branding direction. It seems to be borrowing from the Bored Ape Yacht Club NFT playbook, but the difference with BAYC is each NFT Ape is unique, whereas in this case, 25 token holders may have competing rights. 

For example, when a Bored Ape Yacht Club owner decides to sign a commercial partnership with a brand, it does not need the approval of every other BAYC NFT holder because they are the single owner of their Ape. With Big3, there are multiple IP rights owners, so it’s currently unclear how an individual fan token holder can use the team’s IP or how it would get approval from the other owners. 

And the token holders could have different objectives, with some fans looking to build the team brand long term and others who are investors looking for a short term profit on their tokens. 

A $66 million impact

Depending on how the proceeds of the token sale are used, it could have a big impact on the league. Big3 players make on average $10,000 per game and can take home a salary of up to $100,000. That compares to an average NBA player who has a salary of $7.5 million. If part of that money raised is used to increase players’ salaries, it could attract new and exciting talent. 

No mention was made of using a decentralized autonomous organization (DAO) which is a route being taken by several organizations looking to enable fan ownership.

Larry Ellison’s SailGP will launch a sports team through a DAO. Another DAO hopes to participate in the sale of NFL team Denver Broncos. And blockchain platform MotorDAO is looking to use DAO’s to fund motorsport teams. 

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