Football industry embraces crypto as Messi helps 'fan tokens' take off
PARIS, Nov 24, 2021 (BSS/AFP) - When Paris Saint-Germain signed Lionel
Messi, the salary package included something previously unheard of for a
player -- a one-off payment, understood to be worth around one million euros
($1.15m), made in PSG 'fan tokens'.
It was the result of a partnership signed by the French giants in 2018
with Socios.com which sees fans use a cryptocurrency called 'chiliz' to buy
tokens allowing them to vote on issues related to the club.
These issues have tended to be rather mundane, for example, Juventus
asking what music they should play in their stadium, but the concept has
caught on. The company has grown quickly since signing its first partnerships
with PSG and Juventus to being involved with 56 football clubs and around 100
sports teams worldwide, says CEO Alexandre Dreyfus.
Messi has brought more publicity, and Dreyfus believes the Argentinian
will "set a trend".
"This is more a top-up that is never going to replace any compensation. It
is more like a bonus, but it is a bonus that at some point players will start
to ask for," Dreyfus tells AFP from his office in Malta.
"We hope that in two years, during the 'mercato' (transfer window), a
player will say: 'Yes I am going to that team but they had better give me a
million dollars of fan tokens'."
Dreyfus admits the pandemic and resulting economic crisis has benefited
his company, allowing them to multiply their partnerships.
"The fact is that clubs suddenly lost 50 or 70 or 80 percent of their
revenue, and they realised: 'Hey, we have fans all over the world, what can
we sell them?'"
They now have shirt sponsorship deals with Inter Milan and Valencia,
promoting their fan tokens.
- Sponsorship bonanza -
New analysis by KPMG Football Benchmark shows that over 40 shirt
sponsorship deals have been signed in Europe's five biggest leagues since the
It says Inter doubled income by switching from Pirelli to Socios.com and a
deal worth $23.57 million. There is a mini-revolution happening as businesses
related to cryptocurrency have started appearing on shirts.
In July, Roma announced a three-year deal worth $14 million annually that
sees their shirts carry the name of DigitalBits, "an easy-to-use open-source
blockchain used to power consumer digital assets".
"Not only can fans witness history, but they can now own part of it,"
boasted Roma. "Get ready to trade and collect. Join us as we step into the
future of football."
The emergence of crypto-related businesses in football comes as countries
are introducing regulation to clamp down on gambling sponsorship -- a ban is
in place in Spain, for example, while the UK government is considering one.
"The door is ajar for new companies to stick their foot in," say KPMG.
"Something has to fill the void and fan tokens, or something which is not
defined as gambling but is gambling, are likely to be the big ticket in
town," Kieran Maguire, a lecturer in football finance at Liverpool
University, tells AFP.
- Concerns -
There are concerns about curious punters being drawn into using crypto-
related products without having a proper understanding.
To highlight their volatility, the value of 'chiliz' -- a less well-known
cryptocurrency than, say, Bitcoin -- shot up 58 percent in the four weeks
after Messi's arrival.
"Ultimately these are speculative products. Someone described them to me
as gambling with a small G," says Maguire.
Meanwhile, some supporter groups have criticised their clubs for embracing
Aston Villa Supporters Trust told Joe.co.uk their club's agreement with
Socios.com was "wholly inappropriate" and questioned why fan engagement
should be monetised.
Maguire says: "The clubs are targeting the 'non-legacy fans' and asking:
'Can we make some money out of these new fans?'
"If we take Manchester United, they claim to have 1.1 billion fans and in
a normal year they will make around 600 million pounds ($805m) in revenue. So
that works out as about 55 pence per fan per year. That's pretty bad."
For the clubs, this is where Dreyfus -- a founder of French online
gambling and poker company Winamax -- comes in.
"We are talking about two different generations that are not fighting
against each other, they just don't see the same things," he insists.
"I always joke saying we are not targeting a guy who has a tattoo and
lives next to the stadium.
"Our market is really more about the digital fans, casual fans all over
the world that consume sports differently to you and me historically."