NFL crypto disaster was ‘hundreds of millions of dollars’ off target as NFT market collapsed

Following the meteoric success of NBA Top Shot, the crypto-startup which created the sports-themed digital collectibles was eager for a repeat.

Back in 2021, Dapper Labs inked a deal with both the NFL and OneTeam Partners, a marketing joint-venture  founded in part by the NFL Players Association, or NFLPA. The plan was simple: replicate NBA Top Shot’s success by creating and selling a non-fungible token, or NFT, collection using video clips from an even more popular professional sports league, the NFL.

At its zenith, NBA Top Shot generated sales revenues of $224 million in February 2021 before plummeting exactly one year to $47.6 million, according to CryptoSlam! Then, by February of this year, with the entire digital assets market in the grips of a prolonged bear market, NBA Top Shot collected a mere $2.9 million in sales, also according to CryptoSlam!.

By the time the NFL deal came together and the football-themed digital collectibles known as NFL All Day became available to a limited group of individuals during a soft launch at the end of 2021, it was already apparent to Dapper executives they had overestimated revenue and would fail to achieve the minimum guaranteed requirements it had agreed to pay OneTeam Partners, according to two people familiar with the matter.

NFL players' JV threatens to sue NBA Top Shot creator

Not only would the collection fall short of expectations, NFL All Day was on pace to come up “hundreds of millions of dollars” short, one of the people said. Dapper attempted to bring OneTeam Partners back to the negotiating table, but the joint-venture instead threatened to sue at one point, the two people said.

Dapper and OneTeam fell into a protracted and heated negotiation which lasted months, the two people also said. Amid a significantly deteriorated NFT market the two sides eventually agreed to new terms, one of the people said.

Dapper Labs didn't immediately respond to a request for comment. OneTeam Partners also did not immediately respond.

NBA Top Shot vs. NFL All Day sales volumes: The Block Research

Not even Patrick Mahomes

Even with superstar Kansas City Chiefs quarterback Patrick Mahomes promoting the collection, the NFTs failed to take off.  NFL All Day not only fell far below expectations, it also came up short attracting new consumers. 

NFL All Day’s best month of sales came a month after last year’s August launch and right as the NFL season kicked off. The collection fetched $14.3 million in September 2022, according to CryptoSlam! By January, the last full month of the NFL season, volume had dropped by more than 75% to $3.5 million, also according to CryptoSlam!

Unfortunately for Dapper, when examining the digital wallets which purchased NFL All Day NFTs, the company discovered that nearly all of the wallets had also bought NBA Top Shots, demonstrating that the company had barely grown its customer base with the football-themed collection, a person familiar with the matter said.

Dapper Labs, like many of its peers in the crypto and blockchain space, has struggled in recent months and as a result has had to lay off staff accumulated during the bull run that helped drive NBA Top Shot sales. Dapper Labs was once valued at $7.6 billion.