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Concerns from English football clubs supporter groups have arisen that clubs are putting up economic walls for fans and recklessly monetizing their engagement
Lobby groups have protested against the plethora of crypto-partnerships undertaken by 17 out of the 20 clubs in England’s Premier League. Most partnerships involve the creation and sale of fan tokens in exchange for playing a part in the decision of trivial club matters, such as which scarf a manager wears at a game or the music played at the stadium on matchday.
Socios has partnered with Manchester City, Arsenal, Everton, Aston Villa, and Leeds to sell fan tokens that must be purchased using Chiliz (CHZ) tokens. Each purchase of a fan token amounts to a few pounds.
The chief concern is that it monetizes trivial club decisions that could otherwise be facilitated using online polls, and can reduce genuine fan engagement on economic grounds. Also, it can make individuals invest in tokens sans a proper understanding of the economics surrounding tokens, including their volatility.
The Aston Villa Supporters Trust is against fans’ monetization and believes that this monetization is targeting new fans to generate revenue. The Leeds United Supporters Trust voiced their concern following their club’s announced partnership with Socios. The West Ham United Independent Supporters expressed their approval of the termination of West Ham United’s partnership with Socios in 2020.
A recent Liverpool FC website criticized the fan token fad as a fan-bonus vehicle to onboard new cryptocurrency investors. It added that the tokens’ volatility indicates that non-fans own it, prompting questions about whether it really does drive fan engagement, or is just another speculative asset.
The Athletic highlighted that the tokens do not allow fans to have a say in matters in which they have proven to have a greater interest, such as transfers and tactics.
Fan tokens trade like other tokens
BeInCrypto reported that English Club Southampton had partnered with nonprofit learncrypto.com. But learncrypto.com is a pro-crypto learning platform, partially funded by Sportsbet.io, and does not provide sufficient cautionary information regarding the risks inherent in investing in crypto. Fan tokens are also traded on major exchanges and can be exchanged for fiat. This can disadvantage a fan whose knowledge of crypto markets may not be developed enough to understand its ebbs and flows. The big red flag for English fans is that the Financial Conduct Authority does not yet regulate tokens.
Fan tokens provide a much-needed revenue stream
The use of fan tokens has flourished in the pandemic, with lost revenue due to regional lockdowns being partially compensated for by the income brought in by fan tokens. Many fans are willing to pay for additional content, and the clubs’ partnerships with crypto firms may increase in the future if the English government decides to ban gambling advertisements.
The fact that blockchain is largely community-driven, seems to gel with the sense of belonging that fans of a football club have in common. Barcelona recently partnered with Chiliz and Socios to launch fan tokens, which sold out for $1.3M, and collectively revenues from the sales of fan tokens have exceeded $200M in 2021.
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