What do Paris Saint-Germain (PSG), FC Barcelona, Juventus de Turin, Manchester City, the Aston Martin F1 team and the Ultimate Fighting Championship have in common?
All of them have just created their own currency.
And it pays off.
In recent months, sports organizations have collected a total of “nearly 100 million”, revealed to me Andrew Clarke, head of communications of Socios, the company behind the initiative. One hundred million, on a planetary scale, that may not seem like much. Except that it is still an infant industry. And in the midst of a pandemic, it gives a little fresh air to clubs stifled by the fall in subscription sales.
So how does it work?
It’s pretty straightforward. Each organization puts into circulation a limited number of virtual tokens. PSG, for example, have created 20 million chips. These pieces are then sold for 1 or 2 euros each. First come, first served. Do the math: if PSG sells all of their coins, they share a nice nest egg with Socios.
Hmm … I see you frowning behind your screen.
What about that?
What are these virtual tokens used for? To pay for gasoline? Electrician ? The grocery store ? No, no and no. However, they give you access to privileges. In particular to “ballots”, which allow you to influence the decisions of the organization.
Like the starting lineup?
No, not the starting lineup. Although it has happened in major league baseball before. In 1951, the owner of the St. Louis Browns gave his head coach an evening off and replaced him with 1,000 spectators. The fans built the starting lineup, then decided on match strategies by waving “Yes” or “No” cards. Surprisingly, the Browns won 5-3.
Clubs that issue their own currency don’t go that far. But they allow token buyers to participate in the life of the team. How? ‘Or’ What ? By consulting them on lots of little decisions. Think of the color of the captain’s armband, the design of the players’ coach, or the motivational message displayed in the dressing room before an important game. The more tokens a follower has, the greater his influence. A person can also gain influence by participating in activities, such as a token hunt.
“It’s a good way for clubs to increase the level of engagement with fans,” says Andrew Clarke. Especially with fans overseas, who don’t have the chance to attend the meetings in person. Socios has big ambitions for token buyers. “Their faces could be projected on the panels in the stadium. They could ask the coach a question in the post-match press conference, or receive a video message from a player. ”
With the relaxation of sanitary rules, other options become possible. “Fans could play a game on the club’s field, or attend a game in a box,” adds Andrew Clarke.
While these virtual currencies appeal to supporters, they also attract another group: speculators. Because tokens can be transferred from one person to another. Like stocks, or real currencies.
“Tokens are not designed to be an investment tool,” says Andrew Clarke. Except that Socios still offers the possibility to token holders to buy or sell “virtual dollars” on its platforms. Other sites also allow it. And the value of tokens fluctuates, depending on supply and demand.
As the number of tokens in circulation is limited, if there is a great demand following the hiring of a new player, for example, it can increase the value in the market. [secondaire].
Andrew Clarke, Head of Communications at Socios
This is what happened in August when Paris Saint-Germain acquired Lionel Messi. The PSG dollar has soared, up to $ 50 per unit. Since then, the madness has faded. By mid-November, it was trading around $ 20. During the same period, the currency of FC Barcelona also lost half of its value. Note that in North America, Socios has agreements with clubs of the National Basketball Association (NBA), but for the moment, it is not possible to buy tokens.
That is the bright side of it.
Now, the elephant in the room: Cryptocurrencies are powered by technologies that can be power hungry.
Very, very, very, very, very, very energy intensive.
The process of producing bitcoin alone requires more energy than all of Argentina, a country of 45 million people, is spending. In fact, if bitcoins formed a country, they would be the 30es energy consumers in the world, researchers from the University of Cambridge concluded.
The big boss of Tesla, Elon Musk, yet a big supporter of cryptocurrencies, moreover demanded last summer the end of the possibility of paying a Tesla car with bitcoins, deeming unacceptable the level of energy required to produce this virtual currency.
I reassure you: the currencies of sports teams are created with a technology known to be less energy-intensive than that of bitcoins. So much the better. But their energy footprint is not zero either. It is also a bit contradictory to see clubs getting involved in environmental causes while selling cryptocurrencies and non-fungible tokens.
It just goes to show that boots sometimes have difficulty following their lips …