Will blockchain be a game changer for football?
Football is increasingly embracing digital currencies and blockchain, with startups aiming to capitalize on the dedication of fans. In an industry, where top players can earn seven figure salaries, cryptos and blockchain could also change the way big football clubs operate.
Juventus has become the latest high-profile football club to launch its own digital coin, with the Italian firm following hot on the heels of a similar move by French club Paris Saint-Germain.
The cryptos being launched by the clubs are both powered by the Socios.com blockchain platform. Socios touts its platform as a means for fans to vote on club matters, giving them a chance to become “influencers” rather than just followers.
Users must purchase the Socios.com crypto chiliZ and then exchange it for the digital token of their club. It’s down to the clubs to decide which decisions fans can vote on.
chiliZ is an ERC20 token designed for use on the Ethereum blockchain. Along with the namesake of the token, chiliZ is also the name of the company behind Socios. In April, Malta-based chiliZ raised $27m through an initial coin offering.
“With chiliZ, fans can become partners or managers of any competitive entity. Teams, leagues and events, from any corner of the esports world, can then monetize the fan demand for these voting rights,” said chiliZ in its whitepaper.
Among the chiliZ backers are two Chinese private equity firms and French billionaire telecoms tycoon Xavier Niel. It’s unlikely to be a total coincidence that Paris-Saint Germain was the first football club to sign up to Socios. Xavier Niel is known to be a fervent supporter of the club and frequently attends their matches.
Perhaps it will take some time before the clubs have enough confidence in this sort of decision making before they let the fans take really important decisions in this way.
Much will depend on how many fans actually sign up to the platform and purchase coins to participate in the voting. For the results of votes to really reflect the wider fan-base’s wishes, there would need to be a reasonable number of people signed up to the platform. Otherwise the votes could merely represent the opinions of a small minority.
chiliZ, however, seems to believe the model is going to gain traction pretty quickly.
“By 2020, we anticipate an esports landscape that is not only shaped by what games, teams and leagues draw the highest audiences, but by those who can most effectively activate and monetize that audience by putting the fan-base in the driving seat. It’s called radical fan engagement,” says chilIZ.
Along with enabling fans to vote on team decisions, Socios also claims to offer fans team-specific and platform-wide rewards, with the potential to unlock “VIP experiences” as a result of their engagement with the platform.
While the platform has begun with football, it hopes to eventually expand its reach into other team-based sports, such as cricket and baseball.
In the words of chiliZ, “monetizing an audience”, is probably an apt description for where blockchain and cryptos’ relationship with football is heading. If fan-based voting does take off, however, there is a decent chance blockchain could really give fans more of a say in how their clubs are managed.
Crypto pioneer and trading platform eToro has claimed that blockchain and cryptos could be a force for good in the football world more generally.
“The blockchain technology that underpins cryptocurrencies like bitcoin brings transparency, which we believe can improve the experience for everyone who loves the ‘beautiful game’, from fans being targeted by ticket touts, or a club negotiating a transfer, we believe that blockchain will revolutionize the world of football,” said eToro UK managing director, Iqbal V. Gandham.
This summer, eToro announced that it had entered into a sponsorship agreement with seven Premier League football clubs, claiming to be the first brand to do so through bitcoin.
In partnership with sports marketing agency SportQuake, eToro revealed it had struck sponsorship deals with Newcastle United, Tottenham Hotspur, Crystal Palace, Southampton, Leicester City, Cardiff City and Brighton & Hove Albion.
The sponsorship covers digital rights, tickets, access to players, interview backdrops and LED perimeter boards. It means bitcoin is already playing a role in financing key activities for several prominent UK football teams.
BlocSide is launching an interactive blockchain-based online marketplace to allow fans to purchase football club merchandise, match tickets, season tickets and get opportunities to meet players. It also promises live-streamed game day action through the platform.
Powered by the Ethereum blockchain, users transact through its MVP token, an acronym of “most valuable player.” Using the token to purchase such goods and services will eliminate currency conversion costs and credit card fees. BlocSide also claims users will be able to get discounts on list prices through the platform.
There is even scope for the platform to become a swap shop for the fans themselves.
“We will consider exploring the opportunity to create a marketplace for fans to sell team-related merchandise and tickets. BlocSide platform users would be able to advertise such transactions through their social media accounts, bringing further awareness to the token and its utility and the marketplace,” says BlocSide.
In addition, the digital coin could ultimately be used to fund player transfers. Through its subsidiary Only4Stars, BlocSide already operates as a player transfer agency. It has transferred players to the likes of Manchester City, Ajax, Bologna, Manchester City, Sporting CP, FC Nantes, Roma and Leicester City.
“As we increase consumer interaction with the BlocSide platform, we intend to utilize the BlocSide platform internally for intergroup player transfers and international transactions as a means to proving the cost reductions for club groups and owners. We predict there will be a time in the not-so-distant future where €198m in transfer fees, €1.8bn in broadcasting rights, $100m in sponsorship deals and £4bn in club valuations will all be transacted through digital currency,” says BlocSide.
BlocSide claims clubs such as Manchester United could save around £6m per year simply by reducing the number of currencies they use to facilitate transactions.
“The token enables the all-encompassing vision of a decentralized currency that will allow transactions to become seamless and risk-free for global teams operating across multiple currency jurisdictions,” says BlocSide.
Not only does blockchain and cryptocurrency offer the prospect of changing the way fans interact with their clubs, it could also alter the way in which clubs operate their businesses.
For the fans, it could bring benefits such as discounted tickets and merchandise, but also see them become much more involved in the way their clubs are run.
While football clubs should find more ways of monetizing their products and services through blockchain, operational activities such as buying and selling players could also become a lot more efficient and cost effective.