Cryptocurrency companies have moved into the football market over the last year with many clubs making deals including Manchester City, Real Madrid, Juventus & Manchester United.
The upsides for the clubs is the huge amount of money being funnelled in. Staying at the top of the league is becoming increasingly expensive and with no salary cap in place, clubs are having to pay bigger amounts to attract the best players. The firms involved are happy to pay the money to partner with one of these clubs, helping to grow their brand and attract a new user base.
The risk to fans – buying football tokens
This has seen the usual sponsorship details and fans are well used to seeing a new sponsor on their clubs shirt every season. What is new is the creation of fan tokens for many of the clubs. These fan tokens promise numerous different features such as access to polls and winning potential rewards, however, many of these products have been bought into for pure financial speculation and have been subject to “pumping and dumping” over the last year leaving many fans out of pocket.
One such token, the footballstars token was heavily advertised in June 2021 and promised to revolutionise the world of football with exciting new games and features. A year on and the value of the token has fell by 98% from its peak and their website has disappeared leaving many fans angry. One such fan Fabrizio Sanchez told Cryptathon ” I love football and I love crypto and many footballers from my favourite team promoted the token on twitter, now my finances are in tatters.” Other tokens such as the Man City token launched by crypto firm Socios is down over 90% in value over the last year.
Unfortunately this has been a common occurrence in this space as the world of cryptocurrencies is barely regulated and there is little any one that loses their money can do.
Effects on Premier league of the crypto crash
Over the last 6 months cryptocurrency markets have been falling with most down around 80% since their all time highs. This could have a knock on effect in the English Premier League which saw 19 clubs have at least one cryptocurrency sponsor last season. Cryptocurrency sponsorship has been very lucrative and generating lots of cash for clubs over the last year but its yet to be seen how this plays out over a bear market.
The highest profile club in the league, Manchester United signed a training kit deal with Tezos worth around £20 million per year in February 2022. Tezos token has plummeted in value since then, losing around 70% of its value. Wether Tezos can maintain their sponsorship commitments remain to be seen and privately many of these clubs will be worried over the over coming months if the numerous sponsorship deals can be completed. If they fail to get the cash, the knock on effects in the football world could be huge.