Recently, Dallas Mavericks owner Mark Cuban was a guest on “NBA Top Shot Weekly,” a new show hosted by Alex Kennedy and Oliver Maroney.
Cuban discussed NFTs, the future of NBA Top Shot, cryptocurrency and more. They also opened some rare packs, and Cuban pulled a moment worth approximately $30,000! Watch the interview above or read the transcription below:
How would you explain what NFTs are and how they are valuable?
Mark Cuban: “It’s just a digital collectible. Period. End of story. A collectible can be anything you want to collect. I collected CDs, I collected DVDs, you used to be able to buy and resell CDs and buy and resell DVDs and LPs. Now, it’s just a digital version of all that. It’s not complicated, it’s not anything fancy, and the beauty of it is there’s no hassle factor. I got some of my cards here. See this guy here? That’s the original No. 77, that’s not Luka [Doncic], that’s Jake Voskuhl -- the original No. 77 on the Dallas Mavericks, the one and only. A true collector of cards would be mad at me for not having it in a case and not having it all wrapped up. So, if Jake Voskuhl had a moment, I don’t have to worry about any of those things. When you deal with physical collectibles, you have to worry about grading it, storing it, packaging it, shipping it, receiving it, valuing it… and the evaluations are not efficient whatsoever; one card store is going to evaluate it differently, one website is going to evaluate it differently from another. With NFTs, because it's all digital, the marketplaces are becoming a lot more efficient. They’re not all the way there yet, but they’re getting there and you take away all the hassles of physical ownership.
“Look at StockX. Why was StockX so popular? Because you didn’t have to take delivery of the shoes. So, you collect these shoes without having possession of the shoe. This is the same thing. You’re collecting something you enjoy, like anything else. I collected stamps as a kid, not because I was going to use them to send a letter but because I thought they were interesting and cool and this is the same way. Having a Luka Doncic step-back three to win against the Clippers moment is cool. Having Josh Green’s first dunk as an NBA player is cool. And particularly for Gen-Z, everything of value is in their phone. For Gen-Z, you don’t have a house; you’re too young. Maybe you have a car, but probably not yet. You have some clothes you like and everything else is digital. Your brand identity on Instagram and TikTok and Snapchat, that’s who you are. And you can show all these things on your phone. I mean, just ask anybody who’s had to try to delete pictures from their phone. You can’t tell me that what’s on your phone isn’t the most valuable, personal, important thing that you have. That’s just the way it works.”
People who are new to NFTs always ask: Why should I buy a moment on NBA Top Shot when I can just play a GIF or record a YouTube video?
Cuban: “Dumbest question ever!”
It’s the most common question that we receive! We need you to help clear this up.
Cuban: “Okay, back to Jake Voskuhl. This picture [on the trading card] is on the internet somewhere. This stat data is on the internet somewhere. I can take a picture of this and put it on the internet anywhere; [I can] put it on Twitter and 8 point whatever million of my followers would have the opportunity to see it and download it. The ability to see it on the internet is irrelevant. It’s absolutely irrelevant. It's a collectible! Period. End of story. What’s gold? People buy and sell gold. They certainly don’t have those bars in their house. Have you ever walked into someone’s house and there’s a stack of gold bars in there? No! And when you have gold jewelry, you hide it -- unless you’re a rapper or whoever and wearing it on a chain. With collectibles, it’s just things that people collect and find value in and find uniqueness in. And what makes it even more collectible is the algorithmic scarcity, meaning that the LEs (limited editions) have X number [minted], the rookies have 12,000, the first big run [of commons] had 15,000 and now they have 35,000. And you can see that in the pricing because the prices of the 35,000+ run are a lot less expensive than the shorter runs. So, the reason why it doesn’t matter if it’s physical is because it’s still a collectible.”
How did you first hear of NBA Top Shot and NFTs?
Cuban: “I don’t even remember, but my first step was I went to a site called Mintable.app and I just started minting them. Then, I took a GIF of me walking into the Mavs arena to work out and I decided to post it for sale. I did 10 or 20 for the equivalent of $25 ETH. As I was going through setting it up, I’m thinking to myself, ‘Nobody is going to buy this sh*t. Nobody.’ Then, I saw this part to set up a royalty [fee] and I’m like, ‘You’re kidding me!’ This is the first time with digital content or goods at all that you can participate in the resell market so that’s when I was like, ‘I have to learn more about what’s going on here.’ So, I did my little GIF and I sold 20 for $25 each and then they started reselling and reselling, and I kept getting these transactions in my wallet for more and more money. I learned very quickly that I needed to learn what NFTs were all about because this could change how things were marketed, this could change how digital content is monetized and how IP is monetized. So, that’s when I started digging in and that led me to Top Shot.”
Do you think we’ll continue to see the NBA embrace Top Shot even more and if so, what could that look like?
Cuban: “Of course you’re going to see it. And it really comes down to what players do and that’s the unknown. I’m trying to get Luka to sit down for lunch with me because we already got it set up to do an auction for a non-game NFT that he could do -- just him smiling or we got some that are drawings of him. Who knows how much people are going to bid for that if it’s a Luka-authored original NFT? It could be on Top Shot, if there’s a program there for players to do that, or it could be off of Top Shot. So, we’ll see what players do; [that] will have a big impact. But what Roham [Gharegozlou] and Dapper Labs and Top Shot are doing right now in terms of seeding the market is just brilliant. There’s no reason for the NBA not to continue to [embrace] that, and we’ll see that extended to teams. We’re trying to figure out how to use blockchain for ticketing and once you start doing that, you can start offering NFTs or moments from Top Shot as part of your ticket and create incremental value in a hundred ways and that becomes immediately tradable and sellable, etc. So, there’s all kinds of iterations that these things can offer that are just crazy.”
We’ve asked you before what kind of business you’d start if you were back at square one and you’ve always said that you'd do something related to artificial intelligence. Now that this blockchain and NFT industry is taking off, would that be your new answer?
“It’s just really, really crazy right now and it’s going to get crazier with the stimulus checks [arriving] because the reality is you get a stimulus check and if you don’t have to spend it to pay your bills and you can save it, why put it in the bank? Because you’re going to make .02% and it’s going to take you 20 years to make $20 or whatever. Whereas if you buy $600 worth of crypto in a wallet someplace -- and setting up wallets isn’t as easy as it’ll need to be, but you can figure your way through it -- then, if you’re careful and do your homework using decentralize finance, you can go make 4%, 6%, 8%, 10% by lending that money out or borrow $300 in a heartbeat. It’s still easier than setting up a checking account. I was talking to someone today about setting up a checking account at Wells Fargo for a business and it’s two weeks in and they’re still working on it. Pandemic or not, it shouldn’t be that way.
“One of the beauties of Top Shot is you can buy a moment just like you buy a pair of socks, right? You just put your credit card in, and that’s one of the most brilliant things that they did. But for other things, you have to set up a wallet and it’s easier than having a bank account. We’re getting to the point -- we’re not there 100% -- where anything you can do with your bank account, you can do with a crypto account far more efficiently with far better returns and a lot less friction. No one likes the hassle of dealing with the banks and their transaction fees. And I’m not saying particularly on Ethereum that transaction fees aren’t otherworldly right now. They are. But as you understand when and how to trade, you literally can create businesses and get greater returns on your money if you really do your homework.”
Most of these NFTs will fail and be worthless years from now.
Cuban: “Oh, of course.”
So, how do you decide which NFTs you’re going to purchase? And why are you bullish on Top Shot specifically?
Cuban: “Well, it’s kind of spray-and-pray to a certain point. You know some of them aren’t going to work and what I use to determine [which ones to buy] is the size of the community. It’s almost like Dogecoin. It’s not that Dogecoin has any intrinsic value other than having fun. It's just there’s a community of Dogecoin-lovers that really have fun with it and are just insane about it. And that’s what I look for; the community of buyers. Beeple has insane, rich buyers; he just sold something for $69 million! 3LAU sold something for $3.3 million! King of Leon did $2 million worth of stuff. So, what you look for is really rabid, strong communities and Top Shot has the biggest, most rabid community right now. You can go to cryptoslam.io and you can see all the information. There’s 122,000 buyers for Top Shot and there’s nobody else even close. That tells you the community is there, and it’s just starting; 122,000 is bigger than everyone else, but it’s tiny versus the future market so this is only going to get bigger.”
What are some moments that you’re going after?
Cuban: “One thing to consider is that pandemic games are going to start being scarce in the future because we’re going to be getting away from [COVID-19]. As you go into future seasons, there’s only going to be one-and-a-half years basically of series where the moments don’t have fans in them. I have about 40 moments. When I first started, I was going after guys who I thought were Hall-of-Fame players and I put together my own little ‘Hall-of-Fame collection.’ I also put together a really cool ‘pandemic collection’ because I was thinking at some point, people are going to [look back] and the pandemic will be weird, particularly to kids 5-10 years from now. They’ll see these games without any fans and I think those will have added value.”
If you could create any Top Shot moment of your choice, what would it be? It can be a moment featuring you or anyone you’d like.
Cuban: “Oh, when the Mavs won [the 2011 championship], there’s a picture... There’s 30 seconds left and it’s so stressful because you just never know when a lead will disappear. You can be up 10 points with two minutes to go and you can’t be satisfied. But we got to the point where we were up 10 with 30 seconds to go and I just let out this big sigh of relief. There’s a picture of me alongside Brendan Haywood and Deshawn Stevenson and some of our staff and I’m just holding onto them and screaming at the top of my lungs. That would be my Top Shot moment.”
Here’s one Mavericks moment that would be awesome: Your 2003-04 season opener was against the Lakers (and it was Karl Malone and Gary Payton’s debut). I don’t know if you remember what about that game was so unique…
Cuban: “The trash-can uniforms! We had brand-new uniforms that we thought were so cool, but we’d never had them on during a game. Well, when the players played in them, the sweat made them look like trash [bags]! We never wore them again; that was the one time! That was not meant to be. It was brutal. We got destroyed. I was so pissed. I was just like, ‘Toss these uniforms. Get them the hell out.’"
The NBA trade deadline is approaching. How do you determine whether to be a buyer or seller? What are the conversations that are happening behind the scenes?
Cuban: “It’s just like, ‘Unless we can get better, what’s the point?’ But if someone makes us an offer that we can’t refuse, you take it. It takes two teams, right? Teams don’t all of a sudden get stupid just because it’s the trade deadline. Well, at least most of the time. (laughs). But things change for various reasons.”