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Football Industry Sees Crypto As A New Revenue Stream
• January 27, 2022 3:15 pm • CommentsWhen the football team FC Barcelona was competing for the 2021 Spanish Super Cup final, the trophy was not the only thing that fans were keeping their eyes on.
In addition to winning the championship, the football fans were also looking at the FCB’s fan token which is the club’s official cryptocurrency.
It was promised that they would “burn” 20,000 tokens for each goal the team scored and an additional 40,000 if the team was able to win the championship.
The theory here is that burning tokens would reduce the number of tokens in circulation which would theoretically increase the value of each individual token.
By observing the increased enthusiasm and interest from the fans, the industry has started to see an interesting intersection between sports and the crypto industry.
Dangerous game? #Football clubs look to mine fans’ cash with crypto offerings
Digital tokens seen as new wealth stream as TV rights & sponsorship level off but not everyone is happy @ the new signings
More https://t.co/YOn7jA6SfC#Bitcoin #Crypto #Blockchain #Soccer #Altcoins pic.twitter.com/cRQtV2OqUr
— RareHippo (@RareHippo) January 23, 2022
TheGuardian reports:
Football finance expert Kieran Maguire thinks clubs have latched on to crypto because revenues from other sources are starting to level off, having risen reliably for decades.
“Football clubs have realised that we’re now at max broadcast revenues, with modest growth at most to look forward to,” he said.
“As far as commercial sponsors are concerned, we’re seeing deals being renewed but not with increased money. The only way to increase matchday sales is to increase prices and fans are reluctant.”
Manchester United – whether one believes the club or not – claims to have 1.1 billion fans on the planet. With revenue of £488m in 2019-20, that’s just 45p per year, per fan.
“Clubs are thinking: ‘Can we ‘find another way of extracting money out of that huge fanbase?’ That’s where tokens come in.”
With the introduction of fan tokens into the football industry, it is now more difficult to estimate how much revenue this makes for the football clubs.
Last year, Socios reported that they had sold around $300 million worth of fan tokens, but did not mention what percentage of that revenue went directly to the clubs.
Seeing the potential success of this market and the room for growth, other platforms such as Binance are also looking to get a piece of the pie.
As of right now, there are only a few dozen football clubs that are participating in this market of selling fan tokens to their fans.
Studies show that the majority of the reasons for why fans buy the tokens are for the associated perks such as entering raffles to earn sport related prizes or buying votes to decide on what song to play during the game.
As a result, it allows the fans to become more engaged with the sport experience which encourages fans to be more invested in the team and experience.
That being said, skeptics are pointing out the potential downsides to introducing these tokens to the sport.
Newsconcerns.com reports:
Maguire isn’t against crypto but adds a more sceptical tone: “Lots of fans love crypto and in its purest form it’s great. Banks have been overcharging people for years in terms of transaction fees and if crypto can reduce those fees that’s fantastic.”
“The problem is when unscrupulous traders, particularly via social media, seek to exploit fans who think a token is a serious investment product, rather than a glorified collectible.
“It’s magic beans. So long as it’s sold as a digital Panini card, it’s OK. But when it’s being seen as a form of investment, it’s moving into uncomfortable territory.”
As with anything, the introduction of crypto into the sports industry will have both pros and cons to consider, but it looks like the clubs are moving ahead and embracing the change.
For anyone who watches Serie A you'd have noticed by now the barrage of crypto and token ads taking over football grounds. 🤦♂️ @ByRobDavies has a great read on football clubs looking to mine fans’ cash with crypto offerings. #SerieA #Calcio https://t.co/V8qbM1ggnM
— Frank (@SerieA_Aust) January 22, 2022
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