Sponsor Brings Millions to Chelsea: How Football Jumps on the Crypto Cart

Sponsor brings millions to Chelsea
How football jumps on the crypto wagon

By Constantine Eckner

Cryptocurrencies have been shaking the financial world for a while. Despite their volatility, these products, which are still quite unregulated, are experiencing a lot of hype, which is now also spreading to the football scene. Clubs and players advertise, fans should buy.

The news does not stop: English top club Chelsea sign a jersey sponsorship deal with “WhaleFin”; Lionel Messi promotes Socios for three years for a sum of 20 million US dollars; former top striker Michael Owen promises lossless Non-Fungible Tokens (NFTs). Even in this country, the crypto hype has now arrived for football. Most recently, Kaiserslautern striker Terrence Boyd shared announcement of an NFT after the derby victory against Saarbrücken, but later deleted the tweet.

Football fans, for whom all these names and expressions are bohemian villages, can expect that many things in the coming years will be brought closer to them, whether they are on purpose or not. Because the crypto scene wants to open viewers and followers as the buyer’s market. It can be heard from the scene that some crypto-entrepreneurs are stepping on the accelerator in negotiations and not paying much attention to the specific cost of sponsorship. Before the expected consolidation phase occurs and some protagonists disappear again as quickly as they came, there is a big boom.

It had been predictable for some time. For example, a press release from “NFTFootballMarket” about the World Cup in Qatar appeared on the website “Crypto Trendings” in August 2021. “Football is a sport with billions of fans; blockchain is growing steadily and reaching more and more people around the world. So there is a potential opportunity to combine passion with technology to quench fans’ ‘thirst for ownership’ to breastfeed the planet. ” it said.

The Bundesliga benefits from NFT hype

That’s exactly what NFTs are all about. These are a type of digital asset that resides on a blockchain. It serves to verify the value and authenticity of a digital medium. Such a medium can be, for example, a JPG file, ie a graphic of a football club. Some buyers of NFTs may think they own the graphics, but this is wrong. But when they try to quench the “thirst for ownership”, fans can be led to believe it. They buy an NFT from their favorite team and think they own part of that team, just like a pennant from a game.

“Whether you spend $ 5 or $ 40 million on an auctioned or traded NFT does not give you ownership of the media product associated with the token. What you own when you buy an NFT is not the key to you – interchangeable – possibly even unique – tokens, “says Daniel Kuhn of CoinDesk. “But the digital file associated with NFT can be copied and downloaded just as easily as anything else.”

Those who invest in NFTs should be aware of what they are buying. There is nothing wrong with trading these tokens if you ignore the advertising language of some NFT companies or advertisers like Michael Owen, Lionel Messi and Co. However, it has only recently become clear that the NFT market is very volatile. Since September, token trading has fallen 92 percent. “The NFT market is collapsing,” the Wall Street Journal concluded.

Nevertheless, money continues to flow into football, as a recent announcement from the German Football League (DFL) showed. The Bundesliga and Bundesliga 2 will receive over 170 million euros for the licensing rights to stickers and trading cards including NFTs, mainly for the period from 2023 to 2025. This includes, for example, the exclusive rights to so-called “NFT Moments”, ie. NFT-based videos in the federal leagues and for the use of NFTs as digital player images in fantasy football.

Protests in Liverpool

While the DFL is expanding partnerships with established companies like “Topps”, football is currently being flooded with more and more new crypto brands wanting to get on board as soon as possible. In England and Spain, it has already made its mark with the top addresses.

In addition to the aforementioned agreement between Chelsea and ‘WhaleFin’, which will in future be visible on the shirt’s sleeve, Atlético Madrid also signed a jersey sponsorship agreement with the same company. Chelsea earn around 23.5 million euros for this and the Madrilenians almost double it per season. “WhaleFin” belongs to the Amber Group, which is based in Singapore and specializes in digital assets.

In addition, a few months ago, Manchester United entered into a partnership with the blockchain company “Tezos”. Liverpool have also recently been in talks with crypto companies as the Champions League finalists negotiated a new jersey sponsorship deal. However, Jürgen Klopp’s club refrained from signing a contract. There have been fan protests in the past against Liverpool’s decision to launch their own NFTs.

The trend towards crypto and NFTs in football comes as no surprise in itself. In the last decade, it was mainly game providers who wanted to win fans as customers with large-scale advertising campaigns. The connection between betting and football seemed almost natural. Crypto is a little different, but at the end of the day, companies are all about reach.

The already thoroughly commercialized professional football, especially in the big leagues, can look forward to a new money rain. However, the dangers associated with an impending consolidation phase remain. Because many a deal can break at some point because the other side of the contract has disappeared. In any case, the crypto industry is subject to great dynamism. TerraUSD’s dive in May pulled the entire crypto market down. It will not be the last rejection. Those responsible for football should also be aware of this.

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