Posted on 5th August 2022
The FSA has been tasked by its membership to look at the growth of cryptocurrency in the game and part of that is educating supporters on the issues that surround it.
Fear, uncertainty & doubt? Crypto in English football
It’s been hard not to notice the explosion of cryptocurrency deals across football, as club execs and commercial departments chase football’s latest gold rush.
And those deals with crypto firms have taken many forms, including clubs signing deals with peddlers of fan tokens (offering paid-for engagement on trivial matters), traditional sponsorship deals and players endorsing questionable NFT collections.
But we’ve also seen crypto firms attempting to buy clubs outright – often with big promises about democratic, decentralised ‘fan ownership’. What this new model of ownership can deliver remains to be seen.
The FSA has been keeping close tabs on all of these projects and last month supporter representatives voted on a new policy covering crypto in football at our 2022 AGM.
That new policy commits us to lobbying the football authorities about crypto partnerships in the game as well developing an information campaign for the FSA’s membership – and football supporters generally – about the risks and potential utility around the technology.
Background: Fan tokens
You may have heard of Socios.com who have been the biggest players in the fan token space in European football, signing deals with multiple Premier League and European clubs and even UEFA itself.
Socios.com first entered English football in 2019, when they struck up an ill-fated partnership with West Ham United. Supporters pushed back against the deal, with a coalition of fan groups launching the “Don’t pay to have a say” campaign – arguing that supporter engagement should not be monetised at all, let alone through a then unregulated cryptocurrency recruitment scheme.
Supporter protests caused the club to end the partnership early, without a single fan token, the ‘digital asset’ supporters could buy to vote on issues and events, ever being issued.
Despite that setback, Socios.com re-emerged in the summer of 2021 signing deals with multiple Premier League clubs – arguing they offered clubs and supporters a novel way to engage with each other: supporters download their app, buy some fan tokens with the cryptocurrency Chiliz and use those tokens to vote on polls at their clubs.
Supporter groups have been less than impressed – criticising their clubs over the lack of consultation before signing up, and pushing out misleading marketing to members about the schemes.
So far these votes held via Socios.com tokens have been restricted to actions such as renaming training pitches or picking a player for an Instagram takeover. Take up of Socios.com’s fan tokens at Premier League clubs has been extremely low and participation in its votes has been underwhelming – with tokens bought mostly by external crypto-investors rather than ordinary fans.
Unsurprisingly the value of all of these Premier League clubs’ tokens on the crypto market has crashed since their launch.
It seems crypto-based fan token partnerships are either trying to monetise trivial matters that could easily be done without the blockchain on the one hand or they are inserting financial barriers into genuine supporter engagement on the other. Neither is a good look.
Crypto takeovers
Back in April, Crawley Town were taken over by a crypto-firm called WAGMI United, led by Preston Johnson and Eben Smith, becoming the first of the 92 professional clubs in the country to be owned outright by a crypto group.
WAGMI United, an acronym of “we’re all gonna make it”, have since raised £3m for the League Two club by launching their own non-fungible token (NFT) in collaboration with Adidas – selling 9,000 of the digital assets which were priced around £350 each at the time of the initial launch.
The price of the NFT has since fallen to roughly £230-250.
Crawley co-chairman Johnson told a Twitter live chat: “We’re going to offer via this technology unprecedented access into the way a club functions day to day, week to week.
“Whether it’s deciding what position we put funds towards in the transfer window or where we’re putting funds for events.
“If you have this NFT you’re going to have a say in all the big-picture items for a football club that’s trying to tell a story to get to the Premier League.”
At the time of writing NFT holders have contributed to one significant decision already – which position Crawley Town should target for summer recruitment. 52.4% of NFT holders voted to target the recruitment of a midfielder. No breakdown of how many NFT holders voted, or where the voting power lies, has been published by WAGMI United.
This is the first instance we can recall of an allegedly supporter-owned club directly consulting fans about strategic on-field matters. It is not the norm for community-owned clubs.
WAGMI United say that NFT holders will get special input and voting on the future of Crawley Town, but have not published a detailed framework on how and when these votes are to take place.
Currently these decisions are done on the fly via WAGMI United’s Discord server and the NFTs do not grant an ownership stake as you would see with membership of a traditional supporter-owned club.
So is it fan ownership?
When we talk about supporter and community ownership we require:
- A minimum of 50% +1 of the voting rights of the club to be controlled collectively by a democratic entity which has an open and inclusive membership based on one member, one vote with no substantial barriers to participation as a voting member.
- Profits are reinvested back into the club as opposed to being distributed to shareholders.
- The club is committed to running as a sustainable business.
WAGMI United’s model would not qualify Crawley Town as supporter-owned in our eyes.
What next for fans?
Following the motion that was passed by our members earlier this month, the FSA will be writing to the major football authorities – the FA, EFL and Premier League – for their thoughts on the possible introduction of regulatory standards of cryptocurrency in football.
We will also begin a political lobbying campaign, raising the issue with MPs and legislators starting with the APPG for Football Supporters.
Beyond that we’ll be developing an awareness campaign to help fans understand the issues at play – including resources that supporter groups can take to their members.
If you’re interested in our work in this area or have any questions, feel free to get in touch with us.
