For professional sports leagues and teams long wedded to licensed hats and jerseys, NFTs and equity investments are increasingly coming into play.

NFTs have been a gamechanger across all forms of licensing for much of the past year. In sports, the technology took hold with the arrival of Dapper Labs’ “NBA Top Shot” in 2018 and have grown in response to fans who want to create content as much as they consume it, said Jim Haskins, group VP for consumer products licensing at the National Hockey League, during a panel discussion at last week’s “Sportico Live: Licensing Growth & Innovation” event.

For example, the National Basketball Players Association (NBPA) typically receives a handful of queries from players about consumer products each year. In the past 12 months, however, it received more than 100 queries about NFTs alone, said Josh Goodstadt, EVP of licensing at the NBPA’s Think450, which handles licensing and collaborations. And while NFTs containing NBA player highlights are initially being developed as collectibles, that’s likely to change in the coming years, Goodstadt said.

“It’s a question of how do we work with a product that lives in perpetuity,” Goodstadt said. “You need to be thoughtful about what you are going to do with NFTs that use blockchain.  Right now, there is a collectability aspect, but the next waves are going to be gaming and experiential components that will resonate with everyone else’s business.”

The NHL formed an NFT development group headed by David Lehanski, SVP of business development and global partnerships, and is being “very selective” in entering the category, Haskins said.

The New York Jets are taking a similar approach, according to Chris Pierce, VP of fan commerce. “We are looking at NFTs from a very inquisitive viewpoint and deciding what is the best use of it and how do we can best monetize it. We are all testing the market and we have to decide what is the best use of that technology to service and reach our fans,” Pierce said.

Sorare, which developed an NFT-backed fantasy sports game, has licensing deals with more than 200 soccer organizations including LaLiga (Spain), Bundesliga (Germany), and U.S.-based Major League Soccer (MLS), which signed an agreement last month and expects to have NFTs for its players by late summer. Paris-based Sorare, which raised $680 million in financing last fall, has opened an office in the U.S. and the agreement with MLS is its first with a U.S. pro sports league.

“This is more than a fad,” said Michael Meltzer, head of business development at Sorare. “It is changing everything about the licensing business.”

And while pro sports leagues are looking at equity investing as an opportunity, NBPA’s Goodstadt says the organizations must be selective.

“It’s a very complex process and we have to make sure we are confident it is going to work,” said Goodstadt. “With NFTs, we are getting presented with all kinds of things and we say no more than yes.”

As the leagues weigh potential investments, they’re also seeking to carve out new categories. For example, with wine being popular among NBA players, the players association has licensed Maison Noir, headed by sommelier André Hueston Mack. Player images won’t appear on bottles or packaging but they will work on development, said Goodstadt, who met with six players last week about the deal.