Cryptocurrency markets are tanking around the world.
Bitcoin, for example, is down 70 per cent from its all-time peak in November. Many ordinary investors who got in at the height of the hype have lost a lot of money.
But what does this have to do with football? Actually quite a lot, it turns out.
Over the past couple of years as digital assets have become more and more popular, lots of sports teams have signed up for lucrative sponsorship deals in the sector.
According to one highly experienced club takeover expert, cryptocurrency companies love sponsoring football clubs because they have worked out that it is the cheapest way to find new customers — especially young men.
Of last season’s 20 Premier League clubs, all of them but one — we’ll get to that — have at least one cryptocurrency sponsor and some have several.
This list builds on several original investigations by The Athletic into the relationship between cryptocurrency and football and analyses the 2021-22 season rather than the upcoming one because many sponsorship deals have not been signed or announced yet.
Oh yes, despite the plummeting value of cryptocurrency, there is no sign yet that Premier League clubs’ love affair with it is slowing down.
Just about every club in last season’s top flight played some part in promoting volatile unregulated financial assets to its fans, virtually all of which have crashed on a spectacular scale in recent weeks.
English clubs are desperate for cash as the cost of running a competitive team constantly spirals upwards.
Cryptocurrency sponsorship is certainly a lucrative, and entirely legal, way of generating cash right now. Yet it remains to be seen whether that can continue in the light of the huge crash.
It’s not often that the UK’s Advertising Standards Authority takes aim at a football club, but in December the watchdog deemed that Arsenal “trivialised investment in cryptoassets and took advantage of consumers’ inexperience or credulity” in a promotion featuring three first-team players. The club said it would seek a review of the ruling.
The promotion was for Arsenal’s official “fan token” issued by Socios. The cryptocurrency tokens offer votes and polls on club matters, and can also be traded as a speculative digital asset.
Since initially surging amid hype, the Arsenal token has cratered in value and is down more than 80 per cent from its peak, meaning fans who bought the token late last year and have sold them will be hugely out of pocket.
The tokens were initially “minted” (launched) at a price of £2 ($2.45), meaning users who flipped their tokens quickly banked a quick profit while those who bought later are sitting on losses.
“We want our fans around the globe to be able to engage with the club in different ways. In the digital age, we try to find multiple ways for our supporters to engage with the team and feel part of the club – this is part of that,” an Arsenal spokesperson told The Athletic earlier this year.
“We are not promoting this as a financial investment, and we are clear it’s about engaging with the club by taking part in polls and competitions.”
A free Socios non-tradeable token was given to some existing supporters such as season-ticket holders.
Aston Villa are another one of Socios’ six Premier League clubs.
Villa renamed a road at the training ground based on a Socios poll but social media posts about the firm are greeted with outrage by many fans and the deal has been condemned as “wholly inappropriate” by the Aston Villa Supporters’ Trust.
🟣 Withe Way?
🟣 Mortimer Avenue?
🟣 Rotterdam Lane?Ahead of the 𝟰𝟬𝘁𝗵 anniversary of our 𝟭𝟵𝟴𝟮 European Cup victory, we are dedicating a road at Bodymoor Heath to permanently commemorate the triumph. $AVL token holders can vote now on the @Socios app. 🏆
— Aston Villa (@AVFCOfficial) September 28, 2021
As with Arsenal, the Midlands club’s official fan token has nosedived in value, leaving many fans who bought them as an investment seriously out of pocket — especially as it can be tricky to withdraw cryptocurrency tokens and turn them into cash.
Brentford exceeded almost everyone’s expectations by coming 13th in their first Premier League season.
The west London club has a sponsorship deal with an Australian company called Coinjar, an app that enables people to buy and trade cryptocurrencies and partners with such companies as MasterCard and Apple Pay.
The website’s homepage shows a virtual cryptocurrency wallet that displays the price of Bitcoin as £30,820.70.
But Bitcoin has not been worth that much since the end of April. At the time of writing, is worth about £16,500 — just over half the value displayed on the CoinJar homepage.
When the partnership was announced in August 2021, Brentford chief executive Jon Varney said: “The success of both CoinJar and Brentford is a result of rigorous data-analysis, thinking differently and strategic planning. For many, cryptocurrency remains a complex area, so we look forward to working with CoinJar as part of the partnership to help educate our fanbase as both parties continue their rise in our respective industries.”
Brighton and Hove Albion
You were told there would be an odd one out — and here it is.
Brighton are owned by Tony Bloom who — as well as Brentford owner Matthew Benham — made his fortune in sports betting, using sophisticated models to predict the outcome of sporting events and win bets in the big Asian markets.
It is understood this has a counter-intuitive impact on sponsorship deals because Brighton tend to steer clear of involvement in activities that could leave them open to criticism.
Furthermore, the club have a bumper sponsorship deal with credit card company American Express, a “traditional finance” company often pitted against new digital assets like cryptocurrencies.
The club did until recently have a deal with financial trading app eToro, which offers the sale of cryptocurrencies.
AstroPay adorned the billboards at Turf Moor in the Premier League last season.
The company, which has just signed a front-of-shirt deal with Wolverhampton Wanderers for the upcoming campaign, is billed on Burnley’s website as “the global leader in online payment solutions”.
The website makes clear that a key part of this is buying cryptocurrency and offering an “easy and secure” way of doing so.
The AstroPay website has a section called “learn about crypto”, offering advice about the digital tokens. There are some disclaimers to highlight risk and volatility but one page talks up a cryptocurrency token called Ripple, or XRP, “an open-source system that encourages transactions that are speedy and inexpensive”.
“Ripple has one of the biggest price potentials of any cryptocurrency due to its enormous potential of becoming the new standard in many industries,” the site says. “Keep in mind that the short and long-term prices of any cryptocurrency might be difficult to anticipate. However, as more institutions use Ripple’s transfer method, its price is likely to rise.”
But like virtually all other cryptocurrencies, the price of Ripple has fallen over the past few months.
AstroPay did not respond to an inquiry from The Athletic.
One of the biggest cryptocurrency sponsorship deals in world football is Chelsea’s £20 million-a-year deal with an app called WhaleFin as a sleeve sponsor for the upcoming season.
The app, which also sponsors Atletico Madrid, is powered by a Singapore-based company called Amber Group which has offices around the world.
Cryptocurrency is often criticised by environmentalists because many tokens, including Bitcoin, require powerful computational calculations to function, which involve running huge computer servers which burns carbon.
WhaleFin leans heavily on claims of “sustainability” and pledges to support ocean life, including the whale in the company’s name.
https://twitter.com/WhaleFinApp/status/1537018341826732032/video/1
The app recently announced it is introducing the ability to transfer NFTs — non-fungible tokens, another type of digital asset.
One example of an NFT is the Ape Kids Football Club, established by John Terry, who still works in a coaching role at Chelsea.
After he and several other well-known players promoted the NFTs, they cratered in value and have now lost about 99 per cent of their initial price.
Terry has since endorsed a rebranded scheme called Inter Meta FC.
Crystal Palace’s $CPFC Socios tokens launched a while after those associated with the five other Premier League clubs, some time after there had been significant negative media coverage surrounding fan tokens.
According to data provided by the website RocketFan, Palace’s fan token offering in February was far from a success, with just 64,000 of a possible 200,000 tokens being sold to 6,987 holders, netting $174,000 (£140,000) to be split between club and company.
Unlike every other club, the tokens have not appeared available for trading with no date yet announced. Previous tokens were unlocked for trading within days.
There is no graph for Crystal Palace tokens because they have not been made available for trading.
A Socios spokesperson said: “The Crystal Palace token is live and, since its launch, more and more Eagles fans have enjoyed the benefits and rewards it offers — for example, it gives them the opportunity to win VIP experiences for each Crystal Palace home match or the chance to go to the training ground to meet the players.”
Everton is another Socios club and the $EFC token has also tanked.
The Merseyside club has another intriguing cryptocurrency sponsor in Stake.com, a betting site that will be on the front of shirts next season and also sponsors Watford in the Championship.
A club press release announcing the record deal made no…
Read More:How the crypto crash has impacted each Premier League club
2022-06-28 04:16:25