It is fair to say that football clubs are becoming, if they aren’t already, more of a business than a product of a regional community.
That’s why at the start of the new decade, clubs across Europe were becoming increasingly interested in the developing blockchain sector as cryptocurrency began a boom period that took it to new heights.
At the peak of the bull crypto market in early 2022, both Manchester City and Manchester United looked to get ahead of the curve, inking deals with cryptocurrency exchange OKX and blockchain platform Tezos, respectively.
As new investors were becoming overnight millionaires, not only did companies such as FTX become one of the world’s most profitable companies, but so too did the warning signs from sceptics surface.
This all came to a head in 2022, when the collapse of TerraLuna brought about a summer of crypto winter discontent. This was then followed by the catastrophic collapse of FTX, which plunged the crypto market and elevated consumer fears to new all-time highs.
The results of these collapses that year were evident from the responses, or lack thereof, from other industries. The amount of crypto/blockchain sponsorship deals with football clubs significantly decreased and the market collapse even brought about complications to pre-existing deals.
PULL “European clubs represent a massive opportunity for BlockDAG due to their large international fanbase”
Digital asset firm DigitalBits was unable to pay the remaining money it owed to Serie A club Inter Milan for its front-of-shirt sponsorship agreement due to the money lost from the market crash.
Inter Milan was quick to remove DigitalBits as its partner and found a new front-of-shirt sponsor. However, fast-forward to the present day, and it appears that the Serie A league winners have renewed faith in the crypto sector.
That is because the club recently signed a partnership agreement with blockchain infrastructure company BlockDAG to become the club’s first official blockchain partner. On top of that, indicative of Inter Milan’s newfound confidence in the sector, the club have also signed a deal with crypto company Gate.io as its new shirt sleeve sponsor.
BlockDAG’s bet on football
Speaking to Payment Expert, BlockDAG CEO, Antony Turner, revealed why football is such an important platform for blockchain and crypto companies to not only enhance their brand, but place the trust back into the consumer.
He said: “European clubs represent a massive opportunity for BlockDAG due to their large international fanbase that is incredibly loyal and supportive. Collectively, European football represents a fanbase that is larger than any other region.
“Football is a massive industry, and touches the lives of more than a billion people. That said, the mainstream adoption of crypto will take time and relies on sustained crypto penetration in all areas of business, especially the financial industry. Football will certainly play a role in this.”
As the crypto market continues its resurgence following on from the down period of 2022/23, so too has the confidence from football clubs grown in parallel with consumers.
BlockDAG are epitomising this resurgence, having not only partnered with Inter Milan in the past month, the company also inked a similar deal with one of the Bundesliga’s biggest clubs, Borussia Dortmund.
“We were very specific in targeting these two clubs,” said Turner.
“They represent the type of brands that we would like to be associated with – professional, high profile, premier clubs in their respective countries and worldwide, both with large and passionate fan bases.”
So… the relationship between blockchain and football is well and truly mended and will undoubtedly flourish for years to come right? No, not necessarily.
While enhanced visibility for relatively new companies in an industry that is not even 20 years old is great for garnering attention from new audiences, crypto and blockchain companies will need to rely on gaining the trust back from investors and consumers, no matter if they are current, former or new.
Tapping into European football’s seismic following makes for a good start, but since the FTX collapse, global policymakers increased their focus tenfold on crypto consumer protection guidelines and drafted regulations.
For crypto in Europe specifically, no piece of legislation is more significant than the Markets in Crypto Assets bill, regulations set to come into force in December 2024 that will oversee all crypto activity within the continent.
Turner believes that whilst crypto has shedded some of its stain, he contends that crypto is still a volatile market that has mitigating factors attached to it.
He explained: “Unfortunately I think there may still be more volatility due to uncertainty in the financial markets and around the US election. I don’t believe we’ve seen the top, so I would expect another push to a new high, but exactly when that happens is anyone’s guess.
“The reason for the sponsorships happening now was driven by the fact that the football season has just started, so we wanted to get in from the beginning. Furthermore, these sponsorships are long-term relationships, so there was no need to ‘time’ the market.”
From hype to reality
For football fans to become invested in new age technologies like blockchain, there will need to be some form of benefit for them to become acquainted with the technology and understand its potential.
Lazio and Binance, the world’s largest crypto exchange, sought to provide these benefits by launching the Lazio Fan Token. This digital asset enabled only fans of the Italian football club to engage with it and receive prizes such as exclusive merchandise, digital art and discounts at the club store.
But for Turner, he admits that fan engagement with blockchain-based assets has been “very poor” in regards to the benefit of fans and football clubs.
“My feeling is that the real engagement has been quite disappointing for fans and clubs,” he remarked.
“Socios launched with a lot of noise and quite quickly signed up many of the European clubs. Unfortunately the nature of the deals, and the fan functionality was quite superficial, so after the initial excitement the level of ongoing engagement has been very poor.”
Whilst the crypto sector is still coming to grips with amending its relationship with outside industries, its first and main priority should be to restore consumer and business confidence before it can divulge on the potentially limitless benefits blockchain has to offer.
There is no telling how much of an impact the emerging technology can have on football, from player transfer fees and wages to be transacted via cryptocurrencies, to players contracts being stored as smart contracts.
Turner for one is of the belief that football would benefit from a more holistic and transparent approach that blockchain can deliver in droves.
He added: “We believe that the structure of deals needs to be more holistic. By this I mean that the clubs should be actively involved in the relationship. Watch this space…”
Despite if you remain a sceptic of crypto, blockchain and the whole Web3 movement, football, being one of the largest industries across the globe, is certainly warming back to the idea of its capabilities after throwing it the cold shoulder.
