In recent months, football teams in Europe have embraced new means of interacting with their fans due to the coronavirus restriction. The 2020/21 season saw most football matches played behind closed doors. Most clubs got used to playing without fans hence taking away the perceived home advantage.
A Deloitte report indicates that the top twenty clubs in the world saw about a 12% decrease in revenue in the 2019/20 season compared to the previous season. Following a financially battered year due to COVID, most football clubs have invented creative ways to generate revenue. One of these ways is fan tokens.
What are fan tokens?
Fan tokens are a type of cryptocurrency that grants its holders access to a range of minor club membership perks such as voting on club decisions, access to rewards and club merchandise and so on. Sports clubs deploy fan tokens to democratize membership experiences and foster a sense of belonging among its holders.
How does it work?
Fan tokens are entirely “fungible” or interchangeable. Fans can exchange their tokens for club merchandise, voting decisions, and other exclusive benefits. However, fan tokens are not backed by underlying principles of popular crypto like Ethereum or Bitcoin. Tokens’ worth is measured by how much fans value participating in the club and earning unique benefits.
Fan tokens are purchased digitally by clubs’ favourites, and the seller usually sets the trading value. The value is also subject to market movement and coins’ popularity from time to time.
Fan token offering is the period when a club makes available a number of fan tokens at a fixed price before it enters the market.
Fans can exchange or sell tokens with other fans at a perceived value which can change from time to time. At the moment, most football clubs have partnered with Chiliz, a digital exchange provider, to host their respective coins.
A rising trend in the Football business
Top clubs in Europe have embraced fan tokens to foster fan participation and passion for their respective teams. Juventus used the fan tokens to vote about their new team bus and jerseys designs.
Paris Saint Germain have also been a significant force in the acceptance of fan tokens. Following the transfer deal that saw Lionel Messi arrive at Parc du Princes, there are reports that the French club included a significant fan token in the players’ signing on fee.
Football clubs like FC Barcelona, AC Milan, Inter Milan, Arsenal, Manchester City, Atlético Madrid, among other sports outfits, have pioneered the digital fan token move.
Fans reactions so far
Football supporters have received the development with mixed reactions. Some fans welcomed the fan token to get involved with their favourite clubs and even take part in minor club decisions. Others have criticized the move as a way for clubs to generate more revenue.
Nonetheless, this new trend by football clubs and other sports outfits is another upward step in the cryptocurrency space.
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