This article is from the June 2022 issue of The Critic. Why not subscribe to receive the entire magazine? We are currently offering five issues for just £10.
IImagine running a business where no matter how bad your product is, no matter how many times you let your customers down, those customers keep coming back for more.
I’m not talking about the misery of flying Ryanair, or chasing lost Royal Mail mail, or the many disasters caused by the UK public sector. I’m talking about something much more important: football clubs.
Because football clubs are very strange businesses indeed. They don’t operate a monopoly, but we would never switch allegiances. They don’t lack local competition either, but we wouldn’t support a local rival any more than Prince Harry would turn down an invitation to speak about himself. Whatever rubbish we’re served – and for most fans of most clubs, bitter disappointment outweighs joy – we stand by to the bloody end.
And of course the people who run football clubs know that too. They know they can get away with charging sky-high ticket prices and putting gambling company logos on replica shirts sold to children. They know they can sell their clubs to bloodstained dictatorships and corrupt and criminal billionaires because not only will the fans keep reappearing when it means a larger transfer budget and a greater chance of success, they will revel in the atrocity. Remember the Newcastle fans who happily wore Arabic attire to celebrate their club being sold to the Saudi sovereign wealth fund (above).
Now clubs have their hands on something equally dubious. Some of them, like Manchester City, have started selling “fan tokens” — a type of club-labeled crypto product that can be bought and sold at prices that rise or fall based on demand.
Fans can rest assured that the tokens are rare, limited edition collectibles that will hold their value
The problem is that while clubs and players have supported these tokens and encouraged fans to buy them, the value of the tokens has often fallen shortly thereafter. The “Ape Kids Football Club,” sponsored by former Chelsea and England star John Terry and backed by the likes of Tammy Abraham, Ezri Konsa and Ashley Cole, was trading at an average price of $656 in early February. By early March, its value had fallen to $65. Abraham, Konsa and Cole quietly deleted their online recommendations, but many fans had lost big bucks. And someone, somewhere, had committed murder.
That’s the problem with these tokens. Their defenders – and remember there are many people in and around football who have good financial reasons to defend them – insist they are worthy products, not unlike fans buying club scarves or posters of their favorite players . Fans can rest assured that the tokens are rare, limited edition collectibles that will hold their value. Sometimes they promise special perks, like the ability to vote for songs to be played at the stadium before games.
But the reality is more complex, because in reality, non-fungible tokens and crypto products have no intrinsic value. While traditional currencies are trusted because they are backed by the state, which has a monopoly of control over the money supply, the same cannot be said for cryptocurrencies. In the end, cryptocurrencies are nothing more than a digital asset that owners hope others will want to buy or exchange for at least the same value.
The same goes for the tokens sold by clubs and companies promoted by players. Gold, for example, and art have value because people have always valued their inherent quality, and we have good reason to believe they will continue to do so. But what’s the value of digital drawings of ugly cartoon monkeys like John Terry’s plan, even if they’re wearing our favorite team’s colors and holding up a trophy?
The answer, unsurprisingly to skeptical readers, is not very much. To be fair, this is not unique to the football token market: Token sales worldwide fell from an average of 225,000 per day in September to 19,000 in early May. A token replicating Twitter founder Jack Dorsey’s first-ever tweet was sold in March 2021 for $2.9 million to blockchain business executive Sina Estavi. When Mr. Estavi attempted to auction the token earlier this year, he received no bids above $14,000 and decided against selling it.
A fool and his money are of course easy to separate, but Mr Estavi can afford to be superficial about his loss. The many football fans who are encouraged by their clubs and heroes to buy chips have more to lose. Sportemon Go, another soccer-backed token, halted trading after its value plummeted in early May. But last October, when Sportemon Go was endorsed by Glasgow Rangers, Luke Shaw and Callum Hudson-Odoi, its value had skyrocketed, with nearly $600,000 worth of tokens traded in a single day.
These tokens are now worthless and the losers have no redress as crypto products are almost completely unregulated. But the football money men are undeterred. The Premier League is planning a new token project that will see each of its clubs launch hundreds of millions of pounds worth of branded tokens.
At least for starters. After all, what is the value of these products? Where is the protection for fans? And is it worth the reward of exposing good people of modest means to such dangerous financial speculation? Football, search your conscience.