At the end of the day, an NFT can either be as simple as a basic digital image, an entire book (similar to a PDF), or as complex as a live motion video/ animation. Depending on the type of Rights Holder you are, you may either have clear rights that are not contested by any third-party, or you may be part of a group who all have various claims over particular assets.

We provide our partners advice on how to exploit assets they have clear rights over, as well as how to negotiate design & implementation, ensuring any potential rights disputes are avoided.

While some Rights Holders have internal art and animation teams that are more than capable of building their own underlying digital assets that comprises an NFT, there are those who have no graphical or technical capabilities, who may require assistance from us, or our pool of third-party graphic & animation studios whom we maintain relationships with. Some NFTs are simple to create, while some can be complex with a full user journey to be explained.

Our Partnership has significant experience in this area that stems from decades-long work in the graphic design, animation, video games, software development, sports broadcasting and video post-production fields.

Unlike most other groups, we maintain no preferred relationship with any particular marketplace. This allows a Rights Holder to freely choose where they want their NFTs to initially launch and subsequently trade and resell. Some marketplaces offer both fiat and crypto payment processing options (that makes purchasing easier for customers who aren’t familiar with crypto payments), whilst others may only have crypto currency deposit options. These are the sort of factors that need to be addressed when planning a launch, or “drop” of an NFT range.

Depending on a Rights Holder’s requirements, the decision whether to make their underlying NFTs freely transferable and tradeable, or only accessible via a “closed” marketplace is also an important factor.

Suitability and pricing will often vary depending on marketplace or the strength of the underlying brand and the perceived potential sale size. Some marketplaces are controlled by crypto exchanges that often have secondary focuses on driving customers to their crypto exchanges, so a full understanding of the marketplace is required to ensure the optimal choice is made.

Marketplaces have a wide spectrum of charging models, with most adopting a percentage of sales as their fee (in the same way as a stock broker traditionally charges a commission based on the size of a trade), but new pricing models are appearing all the time.

There are further considerations around the transaction costs involved in creating, or “minting” NFTs and subsequent sale and resale of items. Click this link that explains the issues and some of the potential pitfalls.

We are here to assist you with your Marketplace choice(s) and related questions and are completely neutral in our recommendations.

We also help Rights Holders understand the difference between “Functional” NFTs and “Collectable” NFTs and determine an optimal strategy for their business lines.

Many sports and events organizations may look to generate additional revenues on a regular basis from their normal operating activities. This might include creating NFT “digital” versions of match day programs, which can boost sales revenues in a simple extension to normal operations. Functional NFTs can also broaden market reach and international exposure without costly manufacturing, shipping and/or other logistical issues arising. Functional NFTs are now commonly being crossed with physical items – match day tickets linked to a blockchain ledger are far harder to forge, or buy a digital “item” (say a bottle of wine or pair of shoes) and you can go to any participating physical store and collect the real version.

Collectible NFTs are the more popularised ones where consumer demand drives prices to occasional stratospheric levels. Sports, art, music and other items that are collectible (and have real value) in the physical world, have so far led the NFT collectible space, but new forms will emerge. Digital art has been around for a long time, but is now becoming commoditised (and highly valued) as never before.

The NFT market is extremely fluid at the current time and is very much in its infancy. The volume of available NFTs is going to increase at an exponential rate, so customers will be spoiled for choice. There is a rush for brands to launch NFTs and there will almost certainly be a consumer flight to quality and the very highest profile brands. Whilst we believe that NFTs as a form of digital asset will be around for the longer term, we predict that pricing will become extremely volatile in the short to medium term and that the very successful, “very highly priced” collectible NFT releases will become less frequent, partly because there will be oversupply and partly because customers will become more selective.

Rights Holders need to consider both “Functional” and “Collectible” NFTs as explained earlier and we are happy assisting in determining appropriate one-off and regular drop sizing and frequency.

Whilst generalising somewhat, the NFT market is almost a complete reverse from the typical “brand licensing” model. Traditionally, the Rights Holders would license their brands to toy companies, food and beverage groups, collectible card manufacturers and the like. In these cases, there would often be a percent of sales of up to 20-25% (with a minimum upfront guarantee agreed by the licensee) payable to the Rights Holder.

With NFTs the bulk of sales now falls to the Rights Holder, with marketplaces charging as little as 2.5% and as high as 25%-50%. As a digital artist you could drop your own art onto some of the major exchanges and keep 97.5% prior to transaction charges. For any major Rights Holder though where there are typically many more issues at stake, a more common range of scenarios might be:

	Lowest	Median	Highest
Rights Holder Retention	50-70%	80%	90-95%
Art and Animation Costs	10%	20%	25-30%
Marketing, Legal, NFT Creation, Tech and other advisory	5%	10-15%	20%
Marketplace	2.5-5%	10-15%	25-35%

Obviously a Rights Holder may often have to split their retained percentage with multiple elements. Some Rights Holders will complete all art and animation internally and outsource tech and legal, some may do everything in-house.

At Leisure Rights we adopt a very flexible approach (depending on the Rights Holder) and have worked with our clients on the standard % of sales basis, a time-based fee approach or a hybrid of both.

Due to the financial strength of the underlying Partners, where we feel we can add significantly to the process, a partner Rights Holder has appropriate control over the underlying rights and has a suitably compelling proposition and appropriate marketing capabilities of their own, we are also prepared to back the project with minimum guarantees. We have concluded a number of transactions of this nature.

Please reach out and discuss what’s possible.