Soccer teams turning to virtual ‘fan tokens’ to raise money
LONDON: Soccer clubs around Europe are increasingly turning to virtual fan tokens to raise money and enhance fan engagement.
And the money can pile up fast.
The latest club to enter the world of blockchain, Spanish champion Barcelona, generated 1.2 million euros ($1.3 million) in less than two hours on Monday.
The 600,000 Barcelona cryptocurrency-based tokens, which sold for 2 euros ($2.20) each, give fans exclusive voting rights in club specific polls and can give them a chance to win rewards that could include watching games as VIP guests or meeting with players.
What are blockchains?
Blockchains are blocks of information or transactions that are secure and transparent. They are stored on a network of computers around the world without the need of a centralised party or authority to control the data.
The information can't be altered, and the blocks are chained together using cryptography to form a protected and public digital ledger.
"Thirty years ago, people thought that this internet thing was just about sending email, but today thanks to the internet you can do a million things," said Alexandre Dreyfus, the CEO of the Socios.com platform where fans can buy tokens and vote on club surveys.
"And it's a bit the same with blockchain. We still don't know how to use the technology to innovate and do something that not necessarily existed before."
Barcelona joined Paris Saint-Germain, Juventus, Roma, Atltico Madrid and others using blockchain.
Token buyers can also make money in return by trading the digital assets at a price determined by the markets supply and demand, and ultimately by the teams' performances and actions.
A team signing Neymar, for instance, could see the price of its tokens go up. A club facing relegation could see the price of its virtual asset go down.
Another batch of Barcelona tokens will be put on sale on Wednesday, with the price still to be determined. Owners can sell and trade their tokens using Chiliz, one of the many cryptocurrencies based on blockchain technology.
For now, most clubs are highlighting fan engagement as the main advantage of their blockchain-based fan tokens.
"For the biggest clubs in the world, 99.9 per cent of sports fans are not actually in the stadiums, or even in the same city or country of the club that they are supporting," Dreyfus told The Associated Press.
"There is a lack of engagement and monetisation towards this global fan base," he added. - AP