Why Is Football Getting into Bed with Cryptocurrency?

Crypto sport
Ira Lichi / Bigstockphoto.com

Over the past few years, it has been impossible to ignore the spread of cryptocurrency into the public consciousness. Previously a fringe concept, seen as being of little value and a bubble that was sure to burst sooner rather later, cryptocurrencies now enjoy a much increased practical application with a growing number of stores and individuals happy to accept them as payment. Given they are also increasingly attractive for investors looking to turn a quick profit, it seems that crypto is here to stay.

What does this have to do with football though? Fans still pay for their tickets using standard (fiat) currency, as well as for their replica shirts and half-time refreshments. While true for now, football clubs, which operate very much like businesses, are always open to new ways of making money. If crypto seems to offer some benefits over using traditional currencies, then more and more clubs will begin to get involved.

Crypto Shirt Sponsors

Watford FCYou will struggle to find many clubs that have embraced cryptocurrency more than Watford. In 2019, they announced a deal that saw Bitcoin confirmed as their new sleeve sponsor. You might be wondering how this works given that Bitcoin is not a business, merely a currency, so it is akin to being sponsored by the New Zealand Dollar. Well, in this case, it came following discussions from the main shirt sponsor Sportsbet.io, a crypto-friendly bookmaker who wanted to “improve awareness around Bitcoin”.

Justin Le Brocque, head of marketing at Sportsbet.io, added that it was their way of giving something back to the crypto community that had supported them from the very start. Watford CEO, Scott Duxbury, was mindful that such a deal challenged accepted norms but was excited about the global conversations it would help create for the club. The new sleeve sponsor, and accompanying Bitcoin education website, did not go down too well with the fans however.

Stake

Stake.com logoSkip forwards two years and Watford, again back in the Premier League, announced an even more intriguing deal. In this instance, their new main shirt sponsor, the betting website, Stake, paid for the deal in cryptocurrency. Details of which cryptocurrency it was, or how much the agreement was worth, were not provided but it was reportedly a ‘club-record’ deal. This was the first instance of a Premier League side accepting payment from a major sponsor (or possibly any sort of payment) in cryptocurrency form.

Dogecoin

Accompanying Stake, the Bitcoin-friendly casino and sportsbook, on the sleeve of the Watford shirt was meme cryptocurrency Dogecoin. Reports indicated the sleeve arrangement was worth at least £700,000 but it had the potential to exceed the £1m Bitcoin deal signed two years prior. As was the case before, the choice of sleeve sponsor was organised by the main sponsor, in this case Dogecoin, to increase crypto awareness. Following the news, the meme crypto went from $0.25 the day before word spread, to $0.33 two days later, a big jump in percentage terms.

This here is part of the reason why cryptocurrencies do offer appeal. By giving a currency such a large degree of exposure, you will be increasing the price of the asset. It could well have been that Watford’s deal with Stake.com was paid using Dogecoin, in which case the deal becomes 28% more valuable over the space of one weekend. Think of it like when Elon Musk purchased $1.5 billion of Bitcoin, with Tesla stating they would look to accept the crypto as payment in the near future. This caused the price of Bitcoin to jump 17% to a record high. A tidy short-term profit for Musk.

Crypto Partnerships

Crypto.com logoOther clubs have not gone as far as to parade cryptocurrencies on their match-day shirts but they have signed partnership deals with cryptocurrency firms. In 2018, Arsenal announced that CashBet Coin would be their first ever cryptocurrency partner and official blockchain partner. Another example comes courtesy of French giants PSG. In September 2021, they reached a multi-year deal that saw Crypto.com become the club’s official crypto partner. In this case, a large chunk of the deal was paid for using Crypto.com’s very own token, CRO.

Player Payments

Lionel Messi
Lionel Messi (funnydae / Wikipedia.org)

It is not only clubs that aware of the quick price rises cryptocurrencies sometimes enjoy. Players are aware of their investment potential too. When signing an extremely lucrative deal with PSG as a free agent, Lionel Messi agreed to receive part of his signing fee in crypto. A ‘significant’ chunk of the £25m package took the form of PSG fan tokens, a concept which we will explore in a little while. The tokens themselves went up massively in price when the Argentine’s signature was confirmed, rising a whopping 85%. Trade volume within the following 24 hours also increased over 4000% compared to the same day a week earlier.

Messi is not the only player receiving some pay through crypto however. In April 2021, news broke that all Southampton players could choose to have their yearly performance bonus paid in Bitcoin. It was an arrangement that became possible as the Saints signed a three-year deal with Coingaming Group. As part of the deal, Sportsbet.io would also continue as Southampton’s main shirt sponsor, as the brand is owned by Coingaming. Other details of the contract were sparse but it was rumoured to be the biggest in the Saints’ history.

A New Way to Buy Clubs & Players

Quantocoin logoThere is big money in crypto these days and this has allowed crypto firms to actually purchase a stake in football clubs. Quantocoin, who are building the world’s first mobile blockchain bank, bought a 25% share of Italian side Rimini FC 1912. This was the first time in footballing history that such a deal had taken place using crypto. A few months later there was also news that Dutch crypto company Libereum had become the new owners of Spanish second division side Elche CF.

Although reported by a few different outlets, Elche were quick to ‘strongly deny’ the claims. While on this occasion it may been a false alarm, do not be surprised to see crypto companies buying clubs in future. The same is also true of purchasing players as in January 2021, David Barral became the first player to be bought using cryptocurrency. DUX Internacional de Madrid, a third-tier side who are part of eSports club DUX Gaming, did not disclose the fee but revealed it entirely comprised of Bitcoin. Given that Barral was 37 years old at the time, the fee was surely small but nevertheless it became an easy way of gaining some free publicity.

Fan Tokens

Fan tokens

Clubs have long found different ways to make money from fans. Most top clubs now have club shops selling all kinds of items from towels to mugs and from soft toys to wallets. On top of this, you can pay for premium ticketing options or treat yourself to a guided tour. As long as it makes money, then whatever it is becomes a worthwhile venture.

The latest big idea, which many clubs have hopped on board with, is to sell ‘fan tokens’ to supporters (and potentially investors too). This club cryptocurrency can be purchased and traded by fans in order to give them access to various perks like exclusive content and the chance to win some exciting prizes. Another selling point of these fan tokens is that they are designed to bring fans closer to the club, by allowing holders to vote in official polls. The matters being voted on are relatively trivial, a long way from scouting transfer targets, or deciding on what formation should be used, but it still helps improve the club-supporter connection.

A great number of clubs have started selling these Fan Tokens: Barcelona, Juventus, Atletico Madrid, AC Milan and Manchester City are just a few examples. The company behind many of them, Socios, claimed in August 2021 that fan tokens had raised nearly $200m in revenue, with their partners receiving around half this money. Given that it costs clubs virtually noting to launch a fan token, with Socios taking care of most of it, there are few easier way of receiving a nice cash injection. The first batch of 500,000 Everton fan tokens ($EFC), selling at £2 apiece, sold out in just four minutes.

Conclusion

As you can see, cryptocurrencies have begun creeping into some many different areas of professional football clubs. Crypto advocates will argue that by embracing cryptocurrencies, it could help reduce levels of corruption. This is what Quantocoin argued when purchasing their stake in Rimini FC 1912. They said their payment system logs every payment made, and therefore, money paid between clubs, agents, players, officials etc. can be monitored. Assuming all payments were made this way, it would increase the difficulty of making under-the-table bribes.

For clubs though, it’s mainly about the money. The more cryptocurrencies are seen as good investments, the more clubs will get involved as there is money to be made. Their volatile nature means there will not be a complete shift from fiat to cryptocurrency anytime soon but expect an increasing investment over the coming years.