Football clubs are embracing the revenue opportunity brought by the issuing of crypto tokens. It comes amid the recent trend in the sports industry of crypto sponsorships and using crypto to generate money. Top European clubs such as Barcelona, Paris Saint-Germain (PSG), Juventus, and Manchester City are among those launching crypto tokens.
Fans purchasing these crypto tokens launched by their favourite clubs will gain benefits, such as the opportunity to vote on certain decisions about the club. This move has been celebrated by those fans attracted by the prospect of having exclusive access to their clubs. However, others have criticised clubs for further exploiting fans, many of whom lack the necessary understanding of cryptocurrencies to make informed decisions.
Crypto in the sports industry
The use of crypto in the sports industry is not a new trend. In the first half of 2021, crypto brands spent over $107m on sports sponsorship agreements, according to GlobalData. In July, Patrick Kinch, Sport Analyst at GlobalData, said: “2021 is a landmark year for the cryptocurrency sector, with 49 new deals already secured this year between cryptocurrency brands and rights holders in the sports industry.” In the same month, Watford FC announced that their new shirt sponsorship deal would be paid in cryptocurrency. Scott Duxbury, the club chairman, told the BBC that Watford had an ‘ambitious outlook and commitment to innovation’. The use of other related technologies, including non-fungible tokens (NFTs), to further monetise fan engagement is likely, as football clubs attempt to revolutionise their revenue streams.
Previously within the sports sector, the International Olympic Committee (IOC) had created an official marketplace for fans to buy Olympic collectables. NFTs are providing opportunities to monetise creative digital content in several industries, and its significance is evident through the high level of funding for NFT development in recent years. For example, French start-up Sorare, founded in 2018, secured funding of $56.8m for designing NFT-enabled virtual collectable trump cards for football fans. Football clubs are also teaming up with start-up crypto firms. For instance, Spain’s national team and Scottish champions Rangers work with the Turkish cryptocurrency platform Bitci Technology to create fan tokens. Cagdas Caglar, the founder of Bitci Technology, said: “Sports clubs that are capable of seeing the importance of this trend today will attain a great advantage in the future.”
Opposition to crypto tokens
While crypto tokens appear to be a smart way for football clubs to make up for revenue lost during the pandemic, there are concerns over the ethics of exploiting impressionable, passionate, and quite often young fans. In a statement on the LUFC Fan Token, Leeds United Supporters Trust pointed out that “fans will also be obliged to enter into a cryptocurrency ecosystem; something which many may have very little knowledge of.”
Other fan groups, including trusts at West Ham United and Arsenal, have also conveyed their disapproval and distrust of crypto tokens. The lack of crypto education and its regulation within the sports sector are key areas that need to be addressed.