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Cryptocurrency stands out for winning big in the football industry

While blockchain advocates propose theses to revolutionize a plethora of industries around the world, European football – one of the most widespread industries – is not an exception.

The French football team Paris Saint-Germain (PSG) revealed in a September 11 press release shared with Cointelegraph that it is collaborating with the blockchain platform Socios.com. The main result of the partnership is to launch a Fan Token Offering (FTO) that will give fans access to the Saint-German token clubs, which have the right to vote and can also be representative of the VIP status for their holders.

The Socios platform is powered by chiliZ, a blockchain sports company based in Malta that has already gotten support from major industry players such as Binance and OKEX. In a previous correspondence with Cointelegraph, the CEO of chiliZ Alexandre Dreyfus stated that the initiative raised funding for $ 66 million.

One of the features that Socios hopes will prove popular is the ability for token holders to vote on club-related issues. Unfortunately for the fans, the tokens will not arrive with the type of authority to evaluate the transfers or to give an idea of ​​the developments of the company hierarchy. Fans will still have the right to decide on "cosmetics" (choosing the color of the club shirt, the anthem and the stadium logo), selected sports aspects such as Man of the Match, summer tours and friendly matches.

Fans who wish to use their new powers on executive decisions may be disappointed to see that their authority remains decidedly tokenistic. Dreyfus notes that the purpose of the strategy is not to shake the corporate hierarchy of football clubs, but rather to maximize the monetization of fan engagement through cryptography.

Token holders will be able to trade them on the socios.com market, though only against the native chiliZ token ($ CHZ). Reportedly, the FTO should take place before the start of the next football season.

The platform aims to hit the ground and, once done, does not plan to stop early. Dreyfus wants to have hundreds of clubs on the platform, starting with the first biggest. Socios is already making exclusive five-year agreements with all the clubs they are signing to ensure they have time to develop their product to perfection. Dreyfus also stated that the interest they have raised since becoming a PSG partner is beneficial to others in the crypto community:

"Since we announced our partnership with the PSG, many people have asked where they can buy the token This will be very valuable to the encrypted ecosystem, since we will have to work with the exchanges and legal platforms on board these new users. "

The PSG's move is only the last step in the modernization of football

Although the most recent to do so, the PSG is not the first club to dabble with blockchain and FCO. Technology is catching on with key industry players, with Michael Owen launching his cryptocurrency and Lionel Messi signing a blockchain smartphone. In January 2018, the English Premier League football team Arsenal FC has partnered with CashBet to launch its new cryptocurrency, CashBet Coin. This cryptographic initiative differs from that of PSG in the sense that CashBet Coin is specifically designed for iGaming. As revealed by the project's CEO, Mike Reaves, the token "will enhance the online experience of real money players, casinos, social networks, skills, sports and sports betting through increased trust and transparency, faster payments , reduced rates and dedicated player protection. "

The two FCOs are part of a growing encrypted movement that is taking over British football. An organization in the forefront of blockchain and cryptocurrency is the London Stock Exchange. The organization is trying to reinvigorate the football industry by creating a system of "related components", including sports, media, finance and foundations.

Charles Pittar, CEO of the London Football Exchange, sheds light on the organization goals:

"Our vision is to enable football clubs to leverage the symbolic funding economy for their needs. of financing by providing them with a tokenized financing infrastructure, which includes design services and token issuance. "

Pittar further explained:

"The LFE aims to become a" one-stop shop "for clubs of all sizes to raise capital through equity sales and offer LFE contributors a wide range of fan experiences and of social interaction. "

The token will provide incentives for investment opportunities for a global fan base that can be used both in the local market, but also in participating venues and partner companies. The more LFE chip holders use their coins, the more LFE points they will receive. Token holders would also benefit from exclusive discounts and offers, even if specific details of what they might be have not yet been disclosed.

How clubs and fans could rekindle a business

Blockchain, the technology on which the cryptocurrency is based, is designed to guarantee absolute transparency. If implemented correctly, this could bring a new and honest approach to the assessment of football clubs, which has become a sensitive issue since the early 2000s, when oligarchs around the world have developed an interest in acquiring football clubs and manage them as businesses. While this model sounds like a norm in the United States, European sports fans have not had such experience before the 21st century.

After the Glazer family completed a controversial acquisition offer for Manchester United Football Club in 2005, a fan campaign called "Love United" Hate Glazer "began.The Manchester United fan group was angry at the fact that the finances behind the acquisition of control of the Glazer family came largely from loans, which meant that the previously financially stable club would now be laden with debt, with interest payments in excess of £ 60 million. In August 2010, the Glazer family was unable to repay the bondholders, resulting in an overall increase in interest from 14.25% to 16.25%. has exceeded its earnings by more than five times, campaign activists have begun organizing nonviolent protests and distributing posters with their anti-Glazer slogans engraved on them.

later, a group of wealthy fans nicknamed "Red Knights" met the Manchester United Supporters & Trust and a number of investment banks in order to regain the controlling interest of the Glazer family. The group has raised supporters' membership to more than 100,000 to demonstrate popular support for the club's fan acquisition. Despite its noble intentions and the efforts of a group of dedicated activists, the offer has substantially failed due to excessively rigid prices and lack of transparency in the sales process.

The very nature of blockchain technology means that all information is publicly available and all entries can be traced back to those who created it. This kind of dynamics could support fans in better conditions to withstand disastrous acquisitions or even launch offers to buy the club on their own. All information would be readily accessible in the case of a public purchase offer and inflated prices could become a thing of the past.

LFE argues that blockchain will prove to be beneficial for clubs and fans, thanks to the associated brand association and exhibition, helping less prestigious clubs to float their shares in the stock market. Because of the truly international nature of the fandom, even small and dark clubs can enjoy the support of passionate groups around the world. LFE hopes to use blockchain and cryptocurrency to bring clubs and fans together, while in the meantime it will monetize the process.

CEO Charles Pittar describes the model:

"This global exposure will encourage fans further afield to build a club portfolio in the same way we can buy shares in London, New York and Tokyo."

Crypto as a payment method

Blockchain has already made its first major impact on the ownership of the football club. The Italian club of Serie C Rimini FC 1912 has become the first club in the history of the game to be acquired through cryptocurrency. Quantocoin, a company based in Gibraltar, made the payment in a cryptocurrency with the same name for the ownership of 25% of the team.

The small British overseas territory of Gibraltar has already made a name for itself in the encrypted world with an increasing number of businesses creating the store there. The favorable tax rates on Gibraltar – affectionately known as The Rock – have enabled the creation of an enviable business environment. However, due to strict UK immigration laws, some players have had difficulty setting up bank accounts after signing up for local clubs. Premier Division Gibraltar The united owner Pablo Dana saw an opportunity in which others were discouraged by the labyrinth of bureaucracy. His solution: pay all players in cryptocurrency. Starting from next season, all players' contracts will stipulate that the payment will be made exclusively in cryptocurrency.

Dana claims that the crypt allowed him to manage his football team transparently and also provided him with a way to pay his players evenly. The Italian owner also claimed that such a small club would not normally be able to attract and retain foreign players under normal circumstances.

Dana told Forbes the island's unique approach to regulation and to fintech:

"It was the first [place that] regulated betting company 20 years ago, when everyone saw it horrible. of compliance and anti-money laundering and have created a platform: they have the intelligence to do the same with cryptocurrencies. "

It is clear that cryptocurrency is bound to have a big impact on the way large companies and transactions owned by the club are played in football. However, technology does not just provide solutions to the issue of club ownership. The transparent qualities of cryptocurrencies and blockchain have the potential to revolutionize the purchase of the most valuable and commonly traded aspect in the football industry: the players themselves.

Simple sales

In 2006, two Argentine players – Javier Mascherano and Carlos Tevez – arrived on the side of the English Premier League, entering West Ham, under dubious circumstances. Apparently, the two players had simply moved from the Brazilian side, the Corinthians. However, it turned out that the club had not actually owned the two players in the first place. After an investigation, the players were actually owned by a group of companies. This devastated West Ham contracts and resulted in a 5.5 million pound club fine. The fallout from the failed sale led to the abolition of third party ownership in the Premier League.

The implementation of the blockchain in the drafting of smart contracts for the purchase of football players could prevent this type of debacle from recurring. Since the two players were owned by a consortium of companies, the item in the general ledger for sale could be drawn clearly and transparently. Lu Zurawski, responsible for retail banking at ACI Worldwide, told The Independent:

"Master's voice for a single player could be split into multiple shares, each of which can be sold individually to create a split ownership scheme Depending on the type of ledger technology used, these shares could be tradable and could be bought and sold through exchanges – green folded money is used in exchange for player tokens. "

A blockchain ledger might get away with the days of murky business ownership of football players and could usher in a new era of transparency. In addition to dispelling the mischievous presence of corruption that has muddied the reputation of the game and the industry as a whole, blockchain technology would have been able to create a clear and unchanging record of ownership. This would create trust among players, fans and owners alike by giving all parties concerned a level playing field for future transactions. Ross Peet, managing partner of Yes & Pepper told The Independent:

"If you follow this chain of thought until its final conclusion, we could enter the territory of Star Trek where the Tokenisation of Everything (TOE) will mean that the money it becomes obsolete and we can exchange anything for anything, so it stops the stars Correct, big, changing world, future thinking, fantastic things. "

Beating the bagarins: Crytpo makes the ownership of the tickets less enigmatic

The London Stock Exchange has also begun to explore other ways in which blockchain can help improve current and outdated systems that exist throughout the sport. When asked to think about football, many supporters and enthusiasts can be immediately transported into the unique and stimulating atmosphere of the stadium: this is the true heart of many fans. However, getting there without a serious blow to the bank balance can be easier said than done.

For LFE token holders, however, paying exorbitant prices through illegal dealers may soon become a thing of the past. for tickets at a cheaper price and directly from the club itself.

Michael Broughton, soccer business expert at the consultancy firm Sport Investment Partners, spoke to the BBC about how this could also help clubs to repress misuse of subscriptions:

"At the moment, the Most sports facilities do not know exactly who will arrive at the stadium.In the football clubs of the Premier League, it is not known that people let their friends use their subscriptions when they can not access the games.

"Football clubs may know that a ticket has been used, but not always by whom. be able to target other marketing clubs to these viewers. You'll have less fan involvement. Most clubs and stadiums have this problem.

"If you put your ticketing system on the blockchain, you can check if people have participated or who gave tickets for. If people want to transfer these tickets to friends or others, then they must be registered on the blockchain . "

The appeal of this idea is not limited to British clubs alone. The Union of European Football Associations (UEFA) has successfully tested a mobile based blockchain ticketing system, according to a press release dated 16 August.

The "successful implementation" of the ticketing system took place for a limited 50% share of tickets available for the 2018 UEFA Europa League final in May. The test went smoothly, leading UEFA to increase the second round including all the tickets available for a match between the Spanish giants Real Madrid and Atletico Madrid, one of the most anticipated events in the football world. ticket distribution in the near future.

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