Hello. It looks like youre using an ad blocker that may prevent our website from working properly. To receive the best Tortoise experience possible, please make sure any blockers are switched off and refresh the page.

If you have any questions or need help, let us know at memberhelp@tortoisemedia.com

The adventures (and misadventures) of football’s crypto bros

The adventures (and misadventures) of football’s crypto bros

0:00

This season has seen the emergence of NFTs and other crypto products in the world of football. So where do clubs and the wider game go next in these markets?

At the start of this season, there’s a good chance that you’d never heard of an NFT, or got your head around what ‘Web3’ was, let alone knowing how a DAO functions. 

But as we hurtle to the end of another football season, all those terms have had an impact over the course of this campaign – in some instances, they’ve had major ramifications.

We’re ending the season with stories of NFTs plummeting in value, and of major football clubs weighing up huge cryptocurrency sponsorship deals. One group of crypto investors have even taken ownership of a football club.

So in this two-part Playmaker, I’m going to try and make sense of it all, and look ahead to understand what these fledgling industries’ next moves may be in the coming seasons.

Let’s start in some familiar territory. 

“A big thank you actually, from myself and I hope everyone’s listening because there’s been a bit of criticism, but every bit of criticism there’s been, there’s been five really nice messages from the community as well…”

John Terry – Twitter Spaces

In February this year on the Playmaker, we looked at the story of John Terry’s new NFT collection, and the scepticism some people held against it. 

NFT stands for a non-fungible token.

They are a ‘unique digital certificate, registered in a public digital ledger, known as a blockchain, that is used to record ownership of an asset such as an artwork or a collectible.’

It means you can own digital assets – like a piece of art, or a video, or a song, in the same way you’d own a painting in real life. 

The former Chelsea captain had launched a new collection, the Ape Kids Football Club NFTs, and was promoting them heavily on his own social media. 

Other footballers, including Willian, and Ashley Cole had also promoted them.

And at the end of that episode, we said this: 

Will JT’s Ape Kids Club come to be seen as a leader… and a legend? Or a crash and burn failure? Given the rapid pace of digital life, we’ll know soon enough.

Playmaker podcast – Tortoise

Well, we did learn soon enough. 

A month later, the value of those NFTs had plummeted by 90%, dropping from an average price of $656 in February to $65 in March.

So what went wrong? 

The collection was beset by problems – a general downtrend in NFT sales across the board, but also some of the NFTs ran into trouble on intellectual property grounds. 

The collection had used depictions of Chelsea’s badge, and the Premier League trophy. The Premier League took legal action to get the trophy removed from the NFTs. 

How they thought they would get away with putting a Chelsea shirt and the UEFA logo and the Chelsea logo on a physical shirt or any shirt as that is, and then put it on an NFT and sell it to the market is just ill-advised and naive in terms of the power of IP of these football clubs. The brand of these football clubs is the most important thing.

Tim Mangnall

This is Tim Mangnall, CEO of Capital Block, an NFT agency focusing on the sports sector across Europe and working with sports clubs.

How they ever thought that they were then going to be able to promote that on the open market with a figure like John Terry, who’s obviously being followed by the Chelsea club by all these other football clubs using the Chelsea logo, and the Chelsea shirt, is they were never going to get away with that.

So ultimately their mistakes and their ill decision to create a NFT based on using football shirts and stuff like that has cost them.

Tim Mangnall

Ape Kids Football Club has since rebranded to ‘Inter Meta FC’, promising to ‘decouple themselves from the past and set ourselves on our new adventure in total control of our own fate!’

John Terry hasn’t tweeted about his NFT collection since February. 

Really, the story was a lesson in how not to approach NFTs in the footballing space. 

Let’s head over to Europe – the Netherlands, and Ajax to be precise – where another NFT-based drama has run a couple of players into trouble recently.

In 2019, a version of fantasy football was launched called ‘Sorare’ – it’s like a regular fantasy football game, but users can buy, sell, trade, and manage a virtual team with digital player cards, or NFTs.

The performance of the NFTs correlate to the real-life performance of players – so if they play well, their real monetary value goes up, and vice versa. 

Prior to the Dutch Cup Final, Ajax players Daley Blind – formerly of Manchester United – and Davy Klaasen – formerly of Everton – were accused of essentially trading confidential information for potential financial gain.

Blind and Klaasen both ‘bought’ the digital playing card of their team-mate Maarten Stekelenburg. 

Stekelenburg hadn’t played since August due to injury, but the fact that Blind and Klaasen brought him into their Sorare squads suggested they knew he would start in the Cup Final. 

He did. 

And the Stekelenburg NFT went up in value when Blind and Klaasen bought him. 

Now, the sums involved are in the low hundreds of Euros – pennies to top-level footballers – but this incident raises serious questions about player involvement in these platforms.

And as Joey d’Urso notes, in The Athletic, ‘in almost any other sphere, trading confidential sporting information for financial gain would carry big penalties, but in the virtually unregulated world of NFTs, things are less clear-cut.’

What is clear is that this has been the first season when the big movements of cryptocurrencies, and their extended industries, like NFTs, have entered football.

It is still early days, but what lessons learned from this season may be useful pointers in regulating how the football industry acts in the future.

Today’s episode was written by Andrew Butler, and mixed by Xavier Greenwood.