This post is also available in: Español
Cash-strapped football clubs are turning towards cryptocurrencies to raise funds and cover operational costs, proving the rising asset class serves an umbrella of purposes other than borderless fund transfers and platform usage fees.
Football Giants Turn to Crypto
English premier league clubs Newcastle United and Cardiff City are reportedly considering an Initial Coin Offering(ICO) to safeguard their tournament survival, reported The Times on September 15.
The clubs are in talks with London-based SportyCo, a decentralized investment firm focusing on the sports management sector, for developing a token which enables loyal supporters to raise funds for the teams and be incentivized with hopeful profits in the future.
Football teams are catching on the cryptocurrency bandwagon in a substantial way, as industry observers scourge to search for the asset class’ “killer app.” In September 2018, Brazilian tier-two team Avai announced they are seeking $20 million from club supporters by offering crypto-tokens. Apart from the allure of lucrative returns, investors can purchase the team’s merchandise and purchase match tickets from the Avai website.
In a similar vein, French Ligue 1 club Paris Saint Germain revealed its plans to offer PSG-branded tokens to accredited investors. The club ranks among the world’s top ten biggest football clubs as per operating revenue – indicating token issuances is not limited to low-tier or cash-strapped football clubs.
Onboarding Crypto into Existing Business
While football clubs understandably lack the technological prowess to create their native digital tokens, crypto startups like Socios and SportyCo partner with interested parties.
PSG executives have even conferred a name to the development of community-centric football cryptocurrencies: the Fan Token Offering (FTO). At the time of launch, the official announcement stated fans will be awarded voting rights for staking their tokens – to influence a management decision – and even doubling up as loyalty memberships
For PSG, however, community demands will be limited to stadium music, club’s jersey color, summer tours, charity lineups, and other cosmetic decisions. Fans cannot choose a player to be purchased by the club or lobby for making high-level management changes.
Unlike the norm, the points mentioned above represent a limited token mechanism, instead of making a platform heavily dependent on a particular token. Fans are incentivized for club engagement, and token value is created by offering unique experiences. And while this may not be the “killer app” for the digital asset ecosystem, such innovations impact football businesses and radically change the way fans interact with the team they support.