-0.6 C
London
Monday, November 29, 2021

Cryptocurrency deals are exploitative of fans and unworthy of Premier League clubs already coining it in

Last week, the Premier League signed a £2 billion deal with NBC. For the next four years, England’s top 20 clubs will enjoy a surge in income. More to the point, the deal with the American television network will bring them to the attention of a whole new audience. For many of their commercial partners, this will be an asset worth investing in. Eyeballs are what they chase. Eyeballs with wallets.

Not least those behind English football’s new favourite source of revenue: the cryptocurrency operators. In April, Ruben Dias, the Manchester City defender, tweeted to his 218,000 followers: “I can’t wait to partner with the brilliant Zilliqa team and show the world how powerful #blockchain can be. #Zilforthewin.”

Zilliqa is a cryptocurrency trading operation. It moves in a world of finance that provides absolutely zero benefit to society, one that exists simply to be traded in. Nothing illegal in that. Except, as the Financial Services Authority reported in January: “Investing in crypto assets, or investments and lending linked to them, generally involves taking very high risks with investors’ money. If consumers invest in these types of products, they should be prepared to lose all their money.”

In short, Dias is advising his followers to put their money into something that requires a significant degree of financial experience to negotiate.

Only those who know what they are up to make money out of the crypto market; those who have not got a clue invariably end up out of pocket. Which is why Zilliqa is paying Dias large amounts to promote its services: it is seeking less sophisticated investors to put cash into a system which can then be exploited by the few. Mainly its directors. On the day the NBC deal was announced, Dias declared himself a proud member of the “Socios family”, an organisation which sells fan-engagement tokens using its own cryptocurrency, Chiliz. He is by no means alone. Arsenal, Everton, Leeds and Aston Villa have all signed up.

Meanwhile, his employers, Manchester City, last week announced a “decentralised finance trading analysis” partnership with a company called 3Key. Intriguingly, so keen were City on the deal they did not notice that none of 3Key’s named executives appear to exist; Ryan S Holder, the alleged chief marketing officer, is a fiction. Not that City seemingly were aware of this: it was uncovered by an eagle-eyed investigative reporter.

The moment he did so, the club swiftly – and rightly – suspended the arrangement. But you suspect it will not be the last time such cowboys try to link up with a club.

Cryptocurrency is the financial wild west, an unregulated market where the smart make money out of the dumb. Those behind it want to connect with football because it provides them with thousands of those whose loyalty to their team means they happily accept the implied endorsement. “A new way to translate fan engagement,” is how Alexandre Dreyfus, Socio’s founder (he does exist), describes it. Which can be simply translated as: exploiting a supporter’s love for their club by selling them something highly unlikely to be of any benefit to them.

If you think that is an unfair analysis, look at what happened when Lionel Messi was looking to move from Barcelona. The rumour that he might join Paris St-Germain led to a surge in the price of the PSG Fan Token, effectively its cryptocurrency. Thousands more fans piled in when it was revealed some of the fee Messi had received for signing with the club had been paid in tokens. The value went through the roof.

Days after he signed, however, the price sank. Following the old Wall Street dictum of buy on rumour, sell on news, the smart traders who already had the tokens sold them at the peak, leaving those who bought on emotion with worthless scraps of computer code.

Clubs need to be wary and remind themselves of their duty of care to their fans. They should not be selling them to the financial wolves. After all, they do not need the money. Not after that deal they have just signed with NBC.

News
Latest news
Related news

LEAVE A REPLY

Please enter your comment!
Please enter your name here

13 − = 9