Roughly 60% of former NBA players are broke within five years of hanging up their sneakers, according to a 2009 Sports Illustrated report. These financial problems aren't exclusive to the league. A reported 78% of former NFL players also go bankrupt or are under financial pressure only two years after retirement. Given the generally accepted reality that many of these athletes are from majority black and brown communities, and acknowledging that these communities tend to be disproportionately underresourced, it’s a serious issue that the people best positioned financially to invest in these communities – the ones who have “made it” – struggle, by and large, to retain and grow their wealth.
Now, as Web3 emerges as a technology with financial benefit, pro athletes have a chance to change this sad pattern of life in retirement. After all, NBA players in general are quick to adopt new tech and often lead the masses to adopt emerging tech. Think about the product marketing boom Beats by Dre experienced at the 2008 Beijing Olympic Games when LeBron James outfitted the entire U.S men’s Olympic basketball team with the signature headphones. James, viewed by many as just an athlete at the time, was making quiet early investments in an emerging transformative product that delivered him an outsized financial impact to the tune of $700 million.
This piece is part of CoinDesk's Sports Week. Marcus Bläsche is CEO and co-founder of Rumble Kong League, a competitive 3-vs.-3 basketball sports league in the metaverse for players, fans and brands.
“Buy low, sell high” has been a guiding principle for the stock market since before most of us can remember. James modeled this well with his early investment in Beats by Dre in 2008. Today, Web3, the metaverse and the crypto industry are still taking shape, which means most investors are still quite early, and a growing group of NBA players are among them.
Many NBA players who start charitable organizations within their first few years of turning pro are gearing up to utilize their platforms to prolong their high-earning years and feed into community enrichment initiatives. Take Terance Mann, the Los Angeles Clippers fourth-year swingman, who has partnered with Chibi Dinos, a sold-out 10,000 non-fungible token (NFT) collection turned Web3 gaming company. He's leveraging his emerging platform in an established NBA market to push into an emerging Web3 gaming market to build his brand and benefit the communities he cares for, as expressed in a recent Boardroom interview alongside his business partner Julian Aiken, founder and CEO W3 Sports.
LeBron James has also entered the Web3 fray via a Crypto.com partnership with his charitable organization. “Blockchain technology is revolutionizing our economy, sports and entertainment, the art world, and how we engage with one another," James said in a statement. "I want to ensure that communities like the one I come from are not left behind." James’ “I Promise” school will expose students to this emerging market, teaching them the fundamentals of blockchain technology as part of a long-term strategy for evening the odds in the lives of these disadvantaged youth.
While our own project, Rumble Kong League, is early, we’re also looking at other established players who have begun pushing into the space as waymakers that indicate a sustainable future worth investing in. Take DraftKings, for example, which openly believes “sports will be a main driver for blockchain adoption, and digital collectibles are an important part of that process.” Another great example is how Nike activated in the Roblox metaverse with the help of James as a brand validator.
Clearly, Web3 technology is valuable for brands, athletes and the communities they care for. The Kevin Durant Charity Foundation (KDCF), part of Durant’s Thirty Five Ventures, is also the parent company of Boardroom TV, an outlet that shares in-depth stories from the athlete’s perspective at the intersections of sport, business and culture. The KDCF partnered with Coinbase this past May to give 50 minority students eager to learn about the growing blockchain and Web3 industries an opportunity to do so at ”Crypto University.” Ventures like these feed back into the several community empowerment activities that Durant manages through KDCF, and these initiatives are as much about financial empowerment as they are about recognition.
Forty years ago, music industry kingmaker Jimmy Iovine correctly identified black culture as a rich source of commerce-driving-influence. Iovine invested his time and money into unearthing and anointing many black, brown and or underresourced musical artists through Interscope records. A top list of them includes the late Tupac Shakur, Dr. Dre, Mary J. Blige, The Black Eyed Peas, 50 Cent and Eminem, to name a few. While Iovine’s work is widely appreciated and revered, the Web3 economy can utilize blockchain, the ultimate open application programming interface (API), to enable athletes and artists to earn directly from their NFT collections and other contributions, eliminating the need for middlemen and the like.
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Through the power of blockchain technology, NFT music is being touted as the breakthrough application to bridge the gap between early adoption and mainstream uptake due to music’s transcendent popularity. Art is also one area where long-standing institutions see value and opportunity for buyers and creators in NFT and Web3 art. The creator economy is primed for a shot in the arm, financially speaking. The age-old issue of the starving artist never seeing the financial windfall of their work can be corrected quickly. Through smart contracts, artists can set sell-on clauses to automatically kick back a cut of any future transaction made. Imagine I sell a PFP NFT of my Kong for .05 ETH, or $69.60 (which I would never do). Say Sotheby's buys it off me and sells it for 800 ETH ($1.1 million) in a bull market next year. If I have a 15% kickback clause in my contract I'll receive instant notification that I've just received $167,037 with no negotiation or fuss.
Black culture is inarguably popular and drives commerce, making many corporations billions in revenue yearly while somehow leaving the source of brand identity inspiration out of the loop. Web3 technology is creating an avenue to close that gap through the empowerment of visible black culture leaders as bridges between underserved communities, underpaid industries and this emerging tech market. This vision, though specific, doesn't just benefit black and brown communities, it benefits everyone touched by these industries, including artists; collectors; K-12 students in the cities of Akron, Ohio; Lowell, Massachusetts; the borough of Brooklyn, New York; and many more urban neighborhoods where underserved black and brown people live. We feel we’re all on the same team, and we’re ready to empower NBA athletes and our own community through the metaverse basketball league we’re building at Rumble Kong League. Let’s see if we’re right in 10 years time.