Football Industry Embraces Crypto as Messi Helps 'Fan Tokens' Take Off

Lionel Messi has brought more publicity. (AP Photo)
Lionel Messi has brought more publicity. (AP Photo)
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Football Industry Embraces Crypto as Messi Helps 'Fan Tokens' Take Off

Lionel Messi has brought more publicity. (AP Photo)
Lionel Messi has brought more publicity. (AP Photo)

When Paris Saint-Germain signed Lionel Messi, the salary package included something previously unheard of for a player -- a one-off payment, understood to be worth around one million euros ($1.15m), made in PSG 'fan tokens'.

It was the result of a partnership signed by the French giants in 2018 with Socios.com which sees fans use a cryptocurrency called 'chiliz' to buy tokens allowing them to vote on issues related to the club.

These issues have tended to be rather mundane, for example Juventus asking what music they should play in their stadium, but the concept has caught on.

The company has grown quickly since signing its first partnerships with PSG and Juventus to being involved with 56 football clubs and around 100 sports teams worldwide, says CEO Alexandre Dreyfus.

Messi has brought more publicity, and Dreyfus believes the Argentinian will "set a trend".

"This is more a top-up that is never going to replace any compensation. It is more like a bonus, but it is a bonus that at some point players will start to ask for," Dreyfus tells AFP from his office in Malta.

"We hope that in two years, during the 'mercato' (transfer window), a player will say: 'Yes I am going to that team but they had better give me a million dollars of fan tokens'."

Dreyfus admits the pandemic and resulting economic crisis has benefited his company, allowing them to multiply their partnerships.

"The fact is that clubs suddenly lost 50 or 70 or 80 percent 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.

- Sponsorship bonanza -
New analysis by KPMG Football Benchmark shows that over 40 shirt sponsorship deals have been signed in Europe's five biggest leagues since the pandemic's onset.

It says Inter doubled income by switching from Pirelli to Socios.com and a deal worth $23.57 million.

There is a mini-revolution happening as businesses related to cryptocurrency have started appearing on shirts.

In July, Roma announced a three-year deal worth $14 million annually that sees their shirts carry the name of DigitalBits, "an easy-to-use open-source blockchain used to power consumer digital assets".

"Not only can fans witness history, but they can now own 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 are introducing regulation to clamp down on gambling sponsorship -– a ban is in place in Spain, for example, while the UK government is considering one.

"The door is ajar for new companies to stick their foot in," say KPMG.

"Something has to fill the void and fan tokens, or something which is not defined as gambling but is gambling, are likely to be the big ticket in town," Kieran Maguire, a lecturer in football finance at Liverpool University, tells AFP.

- Concerns -
There are concerns about curious punters being drawn into using crypto-related products without having a proper understanding.

To highlight their volatility, the value of 'chiliz' -- a less well-known cryptocurrency than, say, Bitcoin -- shot up 58 percent in the four weeks after Messi's arrival.

"Ultimately these are speculative products. Someone described them to me as gambling with a small G," says Maguire.

Meanwhile, some supporter groups have criticized their clubs for embracing fan tokens.

Aston Villa Supporters Trust told Joe.co.uk their club's agreement with Socios.com was "wholly inappropriate" and questioned why fan engagement should be monetised.

Maguire says: "The clubs are targeting the 'non-legacy fans' and asking: 'Can we make some money out of 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 pounds ($805m) in revenue. So that works out as about 55 pence per fan per year. That's pretty bad."

For the clubs, this is where Dreyfus -- a founder of French online gambling and poker company Winamax -- comes in.

"We are talking about two different generations that are not fighting against each other, they just don't see the same things," he insists.

"I always joke saying we are not targeting a guy who has a tattoo and lives next to the stadium.

"Our market is really more about the digital fans, casual fans all over the world that consume sports differently to you and me historically."



Liverpool Defender Alexander-Arnold to Return 'Soon'

FILE PHOTO: Soccer Football - Premier League - Liverpool v Aston Villa - Anfield, Liverpool, Britain - November 9, 2024 Liverpool's Trent Alexander-Arnold receives medical attention after sustaining an injury REUTERS/Molly Darlington
FILE PHOTO: Soccer Football - Premier League - Liverpool v Aston Villa - Anfield, Liverpool, Britain - November 9, 2024 Liverpool's Trent Alexander-Arnold receives medical attention after sustaining an injury REUTERS/Molly Darlington
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Liverpool Defender Alexander-Arnold to Return 'Soon'

FILE PHOTO: Soccer Football - Premier League - Liverpool v Aston Villa - Anfield, Liverpool, Britain - November 9, 2024 Liverpool's Trent Alexander-Arnold receives medical attention after sustaining an injury REUTERS/Molly Darlington
FILE PHOTO: Soccer Football - Premier League - Liverpool v Aston Villa - Anfield, Liverpool, Britain - November 9, 2024 Liverpool's Trent Alexander-Arnold receives medical attention after sustaining an injury REUTERS/Molly Darlington

Liverpool right-back Trent Alexander-Arnold hasn't returned to team training yet after of a hamstring injury and could miss next week's Champions League game against Real Madrid, manager Arne Slot said Friday.
The England international was ruled out for Sunday's Premier League match at last-place Southampton. He was substituted off in the 25th minute of Liverpool's 2-0 win over Aston Villa on Nov. 9.
Liverpool, which sits atop the standings in both competitions, expects to be without goalkeeper Alisson Becker and forward Diogo Jota at least through the Madrid game Wednesday at Anfield.
At a news conference, Slot was asked about the trio's availability for both midweek and next Sunday's showdown with title rival Manchester City, The Associated Press reported.
“The last few days of recovery are always the ones that are the most tricky because then they have to go from isolated training sessions to where it's a group training session, and that is always the most difficult one,” Slot said. “It's difficult to judge now and to tell you now it's going to be one, two, three days or a bit longer. The only thing I can say is that with Alisson and with Jota, I don't expect them to be available for that game. With Trent, it's going to be in between.”
Alexander-Arnold will be training with the full team “soon,” the manager said.
Alisson has a hamstring injury. Liverpool hasn't specified Jota's problem but the Portugal forward hasn't played since Oct. 20 when he left in the 30th minute of a 2-1 win over Chelsea. That was after a collision with a Chelsea defender.
Slot confirmed that Liverpool captain Virgil van Dijk is “completely OK.” The center back returned from international duty with the Netherlands after playing in a 4-0 win over Hungary that clinched a Nations League quarterfinals spot. The Dutch played Bosnia and Herzegovina a few days later.