The NHL is officially in the non-fungible token (NFT) space.
It’s a multi-year deal in partnership with the NHL Players’ Association and the NHL Alumni Association, which names Sweet as the official NFT Digital Collectibles Marketplace for the league starting with the 2022-23 season.
“I think it’s fair to say that this is one of the largest licensing deals we’ve done in league history,” said Dave Lehanski, the NHL’s executive vice president of business development and innovation. “So it is very lucrative. And we think that there’s also huge upside going forward.”
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So what does this mean?
(As a quick refresher NFTs are stored on Blockchain technology, a digital ledger that tracks ownership. The NFT, often a piece of digital art, can be sold and exchanged, but ownership is protected by Blockchain technology.)
Now the NFT space for the NHL is about to be better defined. A few individual teams sold NFTs this past season, but without player licensing, those NFTs couldn’t include the name or likeness of anyone on the roster. Individual players also auctioned off NFTs. Matthew Tkachuk was the first, but without NHL licensing those NFTs couldn’t include team logos colors, or any intellectual property owned by the NHL. His piece sold for $27,954 and the proceeds went to the Alberta Children’s Hospital and the St. Louis Children’s Hospital.
This deal essentially merges the NFT market into one space for the NHL, creating a location where players and teams can coexist within the same NFT.
here’s my story from when Matthew Tkachuk was the first NHL player to sell an NFT. https://t.co/lonA9X6VFc now Auston Matthews is. Whether they make sense or not, it’s a way athletes/leagues are finding ways to make some money
— Sean Shapiro (@seanshapiro) April 12, 2021
When looking for a partner — and Lehanski said it talked to “50 to 70” different potential partners within the space — the league was looking for the creation of an NHL-specific marketplace when it came to NFTs.
Once the platform is created, which still has yet to be named, it could have a similar feel to NBA Top Shot. There will be video highlights minted in NFT form as well as specialty packs. The platform is going to lean hard into the alumni association license, which will allow classic moments to be featured prominently.
OK, so why now?
One of the common questions and criticisms of the NHL’s handling of NFTs has been the delay to embrace the space. The NBA, National Basketball Players Association, and Dapper Labs started their joint venture into NBA Top Shot in July of 2019 and launched the platform in 2020.
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The NHL slowplayed its involvement on purpose, according to Lehanski.
“There’s so much like, ‘Hey, what took you so long?” Lehanski said. “I think that people who have that point of view are being short-sighted. I think they’re just thinking about, what’s happened literally today. And they’re not taking a longer-term view of the space and where it’s gonna go.”
Lehanski said rushing would have limited the NHL in landing the ideal partnership, and there were “dozens of entities who believe the same thing and willing to invest for a long-term partnership.”
So if this was a long-term play, what is the long-term vision for the NHL and NFTs?
“We think that there is long-term viability,” Lehanski said. “So we’ve seen enough to know and to believe that there’s going to be a lot of value in NFT’s as consumer products, certainly with regard to digital collectibles. And then you start to think about everything else, right? Tickets as NFTs, avatars as NFTs for metaverse experiences. There is so many different formats it can take.”
Lehanski also maintains this is an effort to build hockey fandom and use NFTs as an entry point to grow the sport. He also said finding a partner that would build the best possible products and collectibles for NHL fans was the most important thing.
To be clear, this is just an NFT deal, not a cryptocurrency deal. That’s a more important point of emphasis today after the crypto market has taken a beating recently, even though the NHL is also looking into potential crypto deals as well, Lehanski said.
“NFTs are so closely linked with crypto and we get so many questions on what’s going on with crypto,” Lehanski said. “To me it’s more about the blockchain. And blockchain is the underlying building and creating future opportunities across every industry … obviously, there’s been a lot of volatility in the crypto marketplace. There’s been a significant downturn as of late, but there is volatility in any market.”
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What about when the NFT market swings?
“Of course there is going to be volatility, and there’s going to be wild swings in the supply and demand as we all get into this space at different times and do different things,” Lehanski said. “But again, if you had a long-term outlook and you’re building a strategy, and you took the time to build a strategy for a longer period of time, you’ll have the ability and will have had the ability to account for these things. And I think that’s what we were able to do.”
Overall the NHL’s hope with the new NFT deal is that it’ll help accelerate and grow league revenues after a 2021-22 season that saw record revenues, according to NHL commissioner Gary Bettman. The NHLPA and NHL both have a keen interest in this, with growing revenues crucial to players paying back a $1 billion debt owed to owners after revenues were rocked by the COVID-19 pandemic during the 2019-20 and 2020-21 seasons.
(Photo: Bruce Bennett / Getty Images)
