Lionel Messi’s Move to PSG Comes With Cryptocurrency Payment
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Lionel Messi, one of the best football players of all time, recently left Barcelona FC to join French club PSG, a move which included cryptocurrency fan tokens as part of the signing fee.
With more than 248 million followers on Instagram and 607.2k on Twitter, the Argentinian player is one of the most well-known football players in the world, making it one of the biggest names to endorse digital assets.
The signing fee for the two-year contract included digital tokens that were part of the $29-$35 million “welcome package”, with the club only sharing that the number of tokens relative to the package’s value was “significant”.
The value of the Paris Saint-Germain Fan Token (PSG) saw a steep increase in value when it was announced Messi would be joining the club, reaching its highest value in the last month.
After a small drop in value, the token raised once again when major media outlets informed of the inclusion of fan tokens as part of the deal.
As a larger number of sports organizations have started integrating cryptocurrencies and Non-Fungible Tokens into their operations, the potential for the crypto industry to benefit from moves by major players seems bigger than ever.
A New Type Of Governance For The Sport Industry
Historically, many sports clubs have allowed their fans to influence the club via “supporter’s trust”.
These trusts use fundraising to acquire shares in the club, allowing them to gain board representation and in some extreme cases, own the club altogether. Now, many clubs are also allowing fans to participate via fan tokens.
Fan tokens are a type of cryptocurrency introduced by clubs to allow its holders to participate in the decision-making process of minor moves, with major organizations like FC Barcelona, PSG, Juventus, AC Milan, Manchester City, Arsenal, and many more have introduced the tokens to their business model.
Socios.com is the company providing fan tokens for PSG and over 40 teams at the national and club levels.
The company has generated about $200 million in revenue for its partners in 2021, according to Reuters.
Marc Armstrong, PSG’s chief partnerships officer, referred to the use of the fan tokens by stating,
“Fully embracing Socios.com and $PSG Fan Tokens has proved a massive success for the Club. We have been able to engage with a new global audience, creating a significant digital revenue stream.”
Fan Token holders can trade their fan tokens as they would any other cryptocurrency, allowing them to profit from changes in the token’s value depending on the club’s performance, decisions, popularity, and other factors.
Crypto Sponsorships Are On The Rise
Sponsorships have been an important part of the sports industry for decades, with brands taking advantage of the visibility they provide as a form of marketing. Now, cryptocurrency exchanges have been following this model to reach new audiences.
An example of this is the $30 million a year partnership reached by crypto.com and the highest international racing competition: Formula One. Other exchanges like FTX have reached their own agreements with organizations like Major League Baseball.
This growing number of sponsorships has resulted in regulators keeping a closer eye on crypto sponsorships.
Such is the case of the UK’s Advertising Standards Authority, which warned that it would “crackdown hard and fast” on any crypto-related advertisements that could be considered misleading.
With major sports leagues and teams seeing their revenue decreased as a result of the COVID19 pandemic, their management teams have been forced to look for new sponsorships to compensate.
This has provided a great opportunity for the growing crypto industry to reach new audiences and expand its businesses. It is likely that more established businesses will look for opportunities in the crypto ecosystem.
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