Why European Football (Soccer) Teams are Adopting Blockchain for Fan Tokens
Blockchain is Taking Over the Footballing Arena as PSG the Latest Club to Join the Movement
Paris Saint Germain (PSG), one of France’s largest football clubs announced its partnership with Socios.com to introduce a fan token offering (FTO) that will give fans access to the Paris based club tokens, which come with voting rights and can also be representative of VIP status for their holders.
Having raised $66 million USD in its token sales so far, chiliZ ($CHZ), the parent company of Socio.com, looks to revolutionizing the sporting industry through the blockchain. Token holders will be able to trade the FTO tokens on the socios.com marketplace, although only against $CHZ. The FTO is reportedly due to take place before the start of the next football season.
However, the impact has not only been felt by PSG football club but other clubs and footballing personalities as well.
Blockchain and Cryptocurrency Adoption Growing Across the Field of Football
More and more football clubs and personalities are taking up blockchain technology and cryptocurrency in a bid to make the beautiful game modernized. So far the football world has seen high profile figures endorsing the technology such as Michael Owen’s cryptocurrency and Leo Messi with the blockchain smartphone. Not only are the players participating but clubs too and high profile ones apart from PSG’s latest integration.
Arsenal Football Club has partnered with CashBet coin, an initiative that aims to improve the online experience for real money, casino, social, skill-based, esports and sports betting players through increased trust and transparency, faster payouts, reduced fees and dedicated player protection.
Together, CashBet coin and chiliZ, are Football Fan Coin Offerings (FCOs) that are increasingly pushing for adoption across European football. The London Football Exchange (LFE) has also been part of a big role in the adoption and implementation of cryptocurrencies and blockchain technology.
The LFE is offering its own token that is aimed at providing its users with investment opportunities for a global fan base that can be used both in the local market but also in participating partner venues and businesses. Through staking the LFE tokens, users will be able to earn points that they can redeem on the platform through offers and special discounts.
Charles Pittar, Corporate CEO of the London Football Exchange (LFE), is quoted praising the overall vision of the football community in coming together to make the systems more transparent through the blockchain. Speaking on the impact of crypto on LFE Charles said,
“Our vision is to allow football clubs to take advantage of the token funding economy for their financing needs by providing them with a tokenized financing infrastructure, which involves token-design and issuance services. The LFE aims to become a ‘one-stop shop’ for clubs of all sizes to raise capital via equity sales and also offer LFE contributors a wealth of fan experiences and social interaction.”
Blockchain Solutions to the Club-Fan Disputes
For an avid fan of one of the top clubs, management means just as much as the lay on the field as the two are directly related. Furthermore, proper and transparent management of the club directs towards the efficiency and less conflict between the fans and club management.
Valuation of football clubs and the running of businesses of football clubs, especially in Europe drove up news on the subject as more clubs were being taken up in the 2000s. Cases such as Manchester United’s takeover by the Glazer’s family raising dispute with the fans due to the club being ran as a personal enterprise.
These problems can be solved through integration of blockchain technology to value these clubs to improve immutability and transparency of results. Cases of overinflating the prices and values of the football clubs will also be eliminated through blockchains as all data is available publicly and cannot be changed or tampered with. This will make it easier to launch takeover bids for a particular club without the selling party overpricing the club.
Football Benefits From Cryptocurrency Payments
Cryptocurrency payments are not only used off the pitch as the recent purchase of 25% of the Italian Serie C club Rimini FC 1912 using purely cryptocurrencies. The Gibraltar-based firm, Quantocoin made the purchase by crypto in a bid to increase the adoption of crypto across the football pitch. Gibraltar, a British Overseas Territory is well-known for its dealings in the cryptocurrency world and the recent move by one of the top clubs deciding to pay players using cryptocurrency exclusively cements the country’s reputation in the field.
Starting next season, premier division club Gibraltar United will pay all of its players through crypto in a bid to pay its players uniformly and increase transparency in the club’s management. The owner of the club, Pablo Dana said the system also allows the club to attract and keep foreign players as compared to normal services.
“It was the first [place that] regulated betting companies 20 years back, when everyone was seeing them as horrible. They put compliance and Anti-Money Laundering regulations and created a platform — they have the intelligence to do the same with cryptocurrencies.” – Dana on Gibraltar’s regulation and fintech
As much as the blockchain technology development will be the key impact to transforming the football industry, simple factors such as transparency in management have the potential to grow the industry even further. We are close to seeing the first ever player to be bought with crypto soon.
Football transfers on the blockchain
Cases of ownership of the players has for the past few decades had challenges as a couple of players are owned by third parties which causes confusion during the player sales. One case is West Ham’s purchase of the Argentinian duo, Carlos Tevez and Javier Mascherano, who were owned by a third party, which led to the club being fined $5.5 million USD for the transfer.
Such cases can easily be eliminated by the distributed ledger allowing easy tracking of the purchase of the players to know who exactly owns the players at the moment of sale. Further expounding on the topic of transfers, Lu Zurawski, practice lead for retail banking at ACI Worldwide explained the need for blockchains to record ledgers.
These ledger entries can be divided into multiple shares, each capable of being sold individually to create a fractional ownership scheme. Depending on the type of ledger technology used, these shares would be tradable and could be bought and sold via exchanges in exchange for the players’ tokens.
This process creates a transparent field of doing business that enhances the trust between clubs, management, players and fans.
Curb of Football Matches Ticketing Corruption
Lastly, one of the most corrupt sections in the football world is the ticketing, where resellers offer exorbitant fees for the tickets to see the games played. London Football Exchange is working towards eliminating by giving LFE token holders access to the tickets at a cheaper price. The conundrum of season ticket holders offering the ticket to their friends if they can’t attend the games is also set to end with the implementation of blockchain ticketing.
The European Football body, UEFA, tested the mobile blockchain ticketing system during the final in May 2018 successfully prompting further tests in the future.