PARIS – When Paris Saint-Germain (PSG) signed Lionel Messi, the salary package included something unheard of for a player – a one-off payment, estimated at around one million euros (S$1.5 million) , performed at PSG ‘fan tokens’.
It’s the result of a partnership the French giants signed in 2018 with Socios.com which sees fans using a cryptocurrency called “chiliz” to buy tokens allowing them to vote on club-related matters.
These issues have tended to be rather mundane, for example Juventus asking what music they should play in their stadium, but the concept caught on.
The company has grown rapidly since signing its first partnerships with PSG and Juventus to become involved with 56 football clubs and around 100 sports teams around the world, CEO Alexandre Dreyfus said.
Messi has brought more publicity and Mr Dreyfus believes the Argentine will ‘set a trend’.
“It’s more of a supplement that will never replace any compensation. It’s more like a bonus, but it’s a bonus that players are going to start asking for at some point,” Dreyfus told AFP. from its office in Malta. .
“We hope that in two years, during the ‘mercato’ (mercato), a player will say: ‘Yes I’m going to this team but they better give me a million dollars in fan tokens’.”
Mr. Dreyfus admits that the pandemic and the resulting economic crisis have benefited his company, allowing them to multiply their partnerships.
“The thing is, clubs suddenly lost 50, 70 or 80 per cent of their revenue, and they realized, ‘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.
New analysis from KPMG Football Benchmark shows that more than 40 shirt sponsorship deals have been signed across Europe’s five biggest leagues since the start of the pandemic.
He says Inter doubled their revenue by moving from Pirelli to Socios.com and a deal worth US$23.57 million (S$32 million).
There is a mini-revolution underway as cryptocurrency-related businesses have started to appear on shirts.
In July, Roma announced a three-year deal worth $14 million a year that sees its shirts named after DigitalBits, “an easy-to-use, open-source blockchain used to power consumer digital assets.”
“Not only can fans witness history, they can now own a 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 introduce regulations to crack down on gambling sponsorship – a ban is in place in Spain, for example, while the UK government in is considering one.
“The door is ajar for new businesses to get in,” says KPMG.
“Something has to fill the void and fan tokens, or something that isn’t defined as a game but is a game, is likely to be the jackpot in town,” Ms. Kieran Maguire, lecturer in football finance at the University of Liverpool.
It is feared that curious punters will be tricked into using crypto-related products without having a good understanding.
To underscore their volatility, the value of “chiliz” – a lesser-known cryptocurrency than, say, Bitcoin – soared 58% in the four weeks following Messi’s arrival.
“At the end of the day, these are speculative products. Someone described them to me as games of chance with a small G,” says Mr Maguire.
Meanwhile, some fan groups have criticized their clubs for adopting fan tokens.
Aston Villa Supporters Trust told Joe.co.uk their club’s deal with Socios.com was “totally inappropriate” and questioned why fan engagement should be monetized.
Mr Maguire said: “Clubs are targeting ‘non-legacy fans’ and asking, ‘Can we make money from 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 (S$1 billion) in revenue. So that equates to around 55 pence per fan per year. That’s pretty bad.”
For the clubs, this is where Mr. Dreyfus, founder of the French online gambling and poker company Winamax, comes in.
“We’re talking about two different generations who don’t fight, it’s just that they don’t see the same things,” he insists.
“I always joke that we’re not targeting a guy who has a tattoo and lives next to the stadium.
“Our market is really more about digital fans, casual fans around the world who consume the sport differently than you and me historically.” AFP