In the past 3 years, a growing relationship has been building between two worlds that couldn’t be farther apart: those of football and cryptocurrencies. Football has been the world’s most popular sport for decades, with many clubs and leagues, for example the English Premier League, raking up millions upon millions of dollars in revenue each year. So one might ask then why the crypto ecosphere has become increasingly acquainted with the footballing world?
The answer is actually quite simple, as the relationship between the two is mutually beneficial: crypto firms receive increased exposure and status by aligning themselves with the most followed sport in the world, while footballing entities (as well as players) are able to partially fill lost revenue streams – estimated at around 9 billion Euros in a Forbes article – due to the covid pandemic.
The crypto sector has especially been involved in the sponsorship sector of football, although some teams have also been directly involved with cryptocurrency as well. For example, Spanish striker David Barral’s move from Real Madrid to DUX International de Madrid last year was the first to be completed with Bitcoin. In addition, Rimini FC from Italy’s Serie C became the first club to be acquired using crypto when Quantocoin bought a 25% stake.
In terms of sponsorships, a big discussion needs to be had surrounding the topic of fan tokens, which are digital assets that can fluctuate in value, similarly to other cryptocurrencies, and that give perks and votes on some minor club issues, as well as giving them rewards and discounts in club shops. High profile clubs like Manchester City, Barcelona and Juventus (from arguably the three strongest leagues in the world) have partnered with Socios, a digital fan token platform.
While Socios has stated repeatedly that its tokens are not sold for financial investment, roughly $300 million worth of tokens have been sold via their app. However, some entities have not been convinced about the use of fan tokens: the UK’s Financial Conduct Authority (FCA) for example, indicated that “there are no consumer protections for those who buy any crypto assets”, and as a result people “should be prepared to lose all the money they invest.”
More than their financial worth, criticisms have been aimed towards fan tokens regarding their actual usefulness. Investigative reporter Martin Calladine has pointed out, for example, that the fact that anyone can buy fan tokens, not just fans of that specific club, leads it to be an essentially worthless engagement tool, as some have highlighted that clubs have chosen to monetize fan engagement by replacing real consultations with “deeply flawed pay-to-have-your-say models”. This is perfectly personified in the fact that rival fans can acquire another team’s fan tokens and then jokingly make decisions such as what song to play when the team scores.
Another asset that football clubs, and in particular some footballers too, have been involved with are NFTs. Earlier this year, for example, German Bundesliga team TSG Hoffenheim announced an NFT partnership with Babydoge, while the league itself (who it should be noted, has not had a single team partner with a fan token provider) signed a NFT partnership as well in late 2021. Juventus have also released an NFT collection of the team’s home shirt replicas for the 2021/22 season, along with two other teams from across the Channel, Manchester City and Glasgow Rangers. Interestingly, unlike for fan tokens, players themselves have entered the NFT ecosphere as well. The most relevant example is Neymar, one of the best players in the world, who spent over $1 million to acquire two Bored Ape NFTs earlier this year, as well as planning to release his own line of NFTs sometime next year, as well as Cristian Ronaldo, who recently released his own collection on Binance.
While the intersection between the crypto and footballing world has been a welcome one for some, many questions remain about motives and the future of this partnership, especially considering not all of them have gone well, with for example Manchester City breaking off a deal with a De-Fi centric crypto company called 3Key after finding little evidence that it even existed. Crypto companies have gambled that their appeal to mainstream audiences and especially to young men, who are their main investors, would grow through their footballing partnerships.
And while that may seem to be the case, considering that 19 out of 20 Premier League clubs now have at least one crypto sponsor, there have been massive failures as well, with most crypto tokens promoted by football clubs sharply declining in value, and some even tanking completely, with for example Italian club InterMilan seeking to break off its partnership with fan token provider Digitalbeats following a series of missed payments.
