Last week, the governing body of European football. UEFA has announced a sponsorship deal with Socios.com, a cryptocurrency company that sells “fan coupons” that can only be purchased through its own blockchain called Chiliz.
Socios fan badges are digital assets that fluctuate in value, as is the case with any cryptocurrency. Holders of discreet fans receive privileges and may occasionally vote for minor club issues.
Football Supporters Europe said it was “terrified” by the UEFA deal. “This is an incomprehensible move at a time when football needs protection from cryptocurrencies,” she said in a statement.
It’s part of a trend that has seen various companies and cryptocurrency platforms invest heavily in professional football over the last two years.
Seventeen of the 20 English Premier League clubs have at least one trade deal with a cryptocurrency company, with six, including Arsenal and Manchester City, already signed with Socios.
Some, such as Watford and Southampton, carry cryptocurrencies as their main sponsor. Watford also bears the Dogecoin logo – a “funny” cryptocurrency associated with Elon Musk – as a sponsor of the shirt sleeves.
Socios has agreements with clubs and leagues across Europe and South America, while several other cryptocurrency companies have entered into important trade agreements such as Turkey, Italy and Argentina.
Another aspect of football’s growing relationship with cryptocurrencies is the NFT (nonfungible token) sector, with clubs and national leagues developing their own digital data – such as photos or videos – for sale and purchase. Several high-profile footballers, including Brazilian star Neymar, have also begun to promote their assets extensively (see tweet below).
So far, no club from the German Bundesliga has registered with Socios. However, earlier this month, TSG Hoffenheim announced an NFT partnership with cryptocurrency Babydoge, while the Bundesliga agreed an NFT partnership with Sorare in late 2021.
Exciting fan wallets
The cryptocurrency explosion has sounded the alarm over wider concerns about the risks posed by the largely uncontrolled sector of financial stability. Last week, a body making financial recommendations to the G20 said rules covering the digital asset market needed to be put in place as a matter of urgency.
Martin Calladine, a research reporter and author of The Ugly Game, told DW that he believed a “perfect storm” had led to the football embrace of cryptocurrencies, with the pandemic fueling such a dramatic rise in cryptocurrency trading. the cryptosector market has grown by more than 500% in the last two years) and a financing crisis in professional football.
He believes that the main purpose of the so-called “fan engagement” services offered by companies such as Socios is to encourage people to buy the company’s cryptocurrency.
“It’s absolutely obvious that most of these brands are not held by club fans,” he says. “And even when they buy it, it ‘s not because they want to express their commitment or sense of commitment. They buy it because there is an opportunity to make a profit.”
Calladine says the fact that anyone can buy a club’s tokens, not just the club’s fans, suggests that it is not an essential fan loyalty tool. A recent first sale of chips for the Premier League team Crystal Palace showed that more than 90% of those who bought chips had previously bought chips from other clubs.
He also points out that the polls in which badge holders can vote are largely meaningless and have low turnout.
“It can not be said that it is a fan loyalty product unless it is the worst fan loyalty product in the world,” he said.
Socio CEO Alexandre Dreyfus insists the company’s tokens are intended for fan loyalty and not for investment.
“A fan who wants to vote will never trade and most of them will never trade,” he recently told the Sportspro StreamTime podcast. “You have fans who bought it for 2 euros [$2,3] and they sell when they are at 10 € but … who can blame them? “
Dodgy companies
Calladine says the speed and growth of the Socios brand has been “remarkable”. However, there are concerns about the good faith of the companies of many other companies entering the field.
In November, Manchester City announced a partnership with a company called 3Key, which is described in press releases as a “DeFi-focused cryptocurrency company”. Just two days later, Man City put the deal on ice after a search by Calladine and others who found little evidence that the company or the people who allegedly ran it actually existed.
Around the same time, Barcelona canceled an agreement with NFT Ownix after the club found out that company executives were facing charges of sexual assault and fraud.
Football: Financially bankrupt, morally bankrupt
Critics like Calladine believe that there is a real risk that ordinary fans will lose significant amounts of money by investing in cryptocurrencies through their association with football. He says the demand for chips is particularly strong in places where football is predominant, such as Brazil and Turkey, where there are also significant financial problems.
“It exists only to suck people’s money, using football as a way to give it some credibility,” he says of the fan model.
The English club Arsenal recently had two ad campaigns for fan brands banned by the UK advertising regulator, saying the club “exploits the inexperience or trust of consumers, degrades investment in cryptocurrencies. investment risk and does not make it clear the ‘token’ was an encryption asset “.
Calladine hopes that a growing sense of urgency around the issue could lead to regulatory repression. However, he points to English football’s deep commercial relationship with gambling companies and other controversial issues such as the recent acquisition of Newcastle United by Saudi Arabia, as examples of how the industry tends to absolve itself of moral responsibility when it comes to money.
“It’s a marriage in paradise between morality and the hunger for football money and the chancelleries of the cryptocurrency,” he said. “You can see how happy they dance together.”
Edited by: Hardy Graupner
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