Backed by Savannah James, the digital community hub aims to help athletes and entertainers connect directly with fans to build their personal brands.
Lockerverse co-founders (from left) James McFall, Marcus Rance, and Trey McDonald.
As college football season kicks off this weekend, many players will be hustling both on and off the field, thanks to lucrative NIL (name, image, and likeness) deals that could make them millionaires. Last year, according to Nick Saban, coach of perennial powerhouse University of Alabama, 25 of his players earned a cumulative $3 million in NIL deals for everything from shoe contracts to sports camps to car dealership partnerships.
The newly minted NIL industry, estimated to be a $1.17 billion market by Opendorse, has created unprecedented opportunities for athletes to build and monetize their personal brands independent of their universities. Since the NCAA made activities such as paid social media posts legal under new rules in July 2021, athletes have undergone a digital transformation overnight, stepping into a creator economy that Goldman Sachs estimates to be worth $250 billion.
This college athletics experience did not exist for digital community platform Lockerverse co-founders James McFall and Marcus Rance when they were teammates on the Stanford football team in the mid-2000s. They received a free education, but they had no opportunity to benefit from the millions that the university earned in media rights, bowl appearances, donor contributions, and ticket sales on the backs of their labor. Universities still keep the revenue from athletic programs to themselves, but at least now athletes can strike their own sponsorship deals.
The Stanford teammates founded Lockerverse, along with McFall's fellow law partner Trey McDonald, when they saw the need to help athletes navigate the uncharted NIL waters. In late 2022, with backing from Savannah James, the three co-founders launched Lockerverse as a platform that would give top-tier creators the ability to build community, monetize their NIL, and engage their superfans.
For these Black founders, starting this new venture was very personal.
"Athletes have always been a part of the creator economy," McFall says, "but for a host of reasons they weren't allowed--I think wrongly--to benefit from their talent. Our platform is a key place for those people to share their creative genius with the world and benefit from their hard work."
As attorneys with the Dallas-based firm Jackson Walker, McFall and McDonald represented some of the biggest names in sports and entertainment. They witnessed many athletes' being unprepared to take advantage of the new NIL rules and saw nothing in the marketplace that they believed could adequately help these athletes build their brands.
"Realizing their own true value and being able to have a direct relationship with their fans is a perfect way to equip them to provide for themselves and their families," says McFall. "There needed to be a tech solution to really do this at scale because a lot of people needed that help. Oftentimes, as men of color, these technological revolutions leave us behind, and without our having an opportunity to have a meaningful seat at the table there is no way to shape it. Given the impact of Black and Brown people on the culture and setting trends, we thought it was important for people who look like us to build out that table."
The founders hatched their plan on the back of a napkin over drinks in late 2021 at a Los Angeles hotel bar. A name for their company emerged from childhood recollections of putting things in their school lockers that they couldn't hang on their bedroom walls. McDonald, for example, kept a photo of Lil' Kim in his locker. "We thought of Lockerverse as this place of self-expression where you're collecting things and joining different communities that you care about," says McFall. "That could be your locker within this new digital space."
Soon the two attorneys would resign from their senior law partnerships and spend most of their time building their new company. "We love to practice law," McFall says. "But it was an opportunity to have an impact on not just one client on a case-by-case basis, but to do it for a bunch of athletes and entertainers that often look like us."
Pretty big deals
Last December, during the Celebration Bowl in Atlanta, Lockerverse launched its platform with a free digital collectible to 50,000 fans at the game between Jackson State and North Carolina Central. Since then, the company has added tools that allow people to buy merchandise directly on the platform and livestream.
Lockerverse has already inked deals with Nipsey Hussle's estate, Bronny James, who plays basketball for the University of Southern California, and NFL quarterbacks Deshaun Watson of the Cleveland Browns and C.J. Stroud of the Houston Texans. The company touts itself as a "first-of-its-kind community platform and cultural hub for the future of the internet."
Savannah James, now a co-founder and board member of the platform, got behind Lockerverse because she believed that it was important for African Americans to lead tech companies and disrupt the sports entertainment industry, where her husband, LeBron, is a global icon. Her two sons, Bronny and Bryce, have also become owners in the company.
"Lockerverse is redefining how athletes, entertainers, artists, and brands engage with their audiences," she says. "Each member of our team has an unwavering passion for the work we're doing to disrupt the creator landscape and develop a platform that will shape the future of sports and entertainment."
The Nipsey Hussle model
Later this year, the Web3 platform will begin rolling out 10 unreleased Hussle songs as a digital collectible on its platform using blockchain technology. To do this, Lockerverse has partnered with Leroy Williams Jr., who goes by Mr. Lee, one of Hussle's longest collaborators and producers. Before he was murdered in 2019 outside his Los Angeles clothing store in an argument with a gang member, the rapper and entrepreneur made his name in the music world as an independent artist who dared to produce music on his own terms without the control of the major record labels.
On October 15, 2013, Hussle sold 1,000 mixtapes at $100 each at a pop-up shop in the city. Fans got their tapes autographed and received a ticket to a future Hussle performance. He called it the "Proud2Pay" campaign, a patron model where instead of the artists trying to sell their music to the broadest audience, they focused on reaching people already super engaged with their music--superfans.
Lockerverse's founders see the company's mission as a logical progression of Hussle's philosophy of giving artists greater control over their intellectual property by helping them reach their fans directly. "Our platform provides Mr. Lee and other artists like him the ability to easily connect and give their fans exactly what they want, but utilizing the most innovative technologies available," says McFall.
In the short term, Lockerverse's plans are to generate revenue on its platform through digital collectibles, exclusive content, brand partnerships, and merchandise. Ultimately, though, the plan is to transition to a subscription-based model built around specific communities. The founders envision the platform as a place that sits at the intersection of sports and culture, where creators can bring their intellectual property and engage their superfans.
"It's hard for creators to distinguish between the passive fan and a nonpassive fan," says McDonald, pointing to conversion rates of 1 to 2 percent on sales through Instagram. "So what we're saying is, instead of bringing a million followers to your community, bring 100,000, and those 100,000 will support what you're building, and we're able to take a cut off that revenue."
Familiar problems, novel solutions
Lockerverse has gotten off to a good start in large part because of the reputations of McDonald and McFall, who have connections with some of the industry's top agents and athletes. The company signed Stroud to an NIL deal during his last season at Ohio State, and when they learned that he was a big Hussle fan, they invited him out to L.A. to listen to the tracks they had acquired. Now they have a deal with him to sell his branded merchandise exclusively on Lockerverse.
"Agents and marketing managers at some of these agencies really enjoy what we're building and enjoy being around us because we are different from your normal tech founders," McDonald says. "There's a level of comfort there. We rely on them to kind of tell us what they would like to see being built as far as their brand within the Lockerverse platform."
Three Black guys launching a platform with scant experience in the space has raised some eyebrows in the tech world. "From the outside looking in, it's two lawyers and a tech guy--how are they going to get this done?" says Rance, who leads product and engineering at Lockerverse. "But I feel like all of us have really stretched ourselves and dug in and really gotten passionate about what we're trying to do. There's not really a good place where creators can go and do all the things in one centralized location. So it's been a pleasure to be the company that we believe can solve that problem."
Still, perceptions weigh heavily in a tech industry that is predominantly White. "We don't necessarily look the part of tech founders, especially founders focused on a platform," says McDonald. "If you put our names and backgrounds on paper, money would be pouring in if you look at our peers. But I think that once you see who we are and our mission to make sure culture is infused into what we're doing, there's been pushback or a lack of support."
On the flip side, McDonald says, the people who get it really have been supportive. Lockerverse participated in the Disney Accelerator program, for instance, as part of a cohort of six companies that included startups that already had a valuation of more than $1 billion. At first, the Lockerverse founders felt starstruck, but once they got over that they realized they belonged in the room.
Now they're working on their second commercial deal with Disney Properties. "I think as Black men who have been successful in business, we understand how to be nimble," says McDonald. "And how to be lean and how to hustle in the sense of building something despite our lack of resources."