In November, Manchester City FC signed a strange marketing partnership: with 3Key, a crypto company. There were, of course, questions. First, of course: “why?” Second, shortly after: “Who? »
City’s rationale was published in dead-eyed prose: Stephan Cieplik, one of the club’s sales managers, said he was “delighted to be partnering with 3Key on its journey to simplify the user experience decentralized finance (DeFi) business analytics through the power of football.” . Barely vintage Roy from the Rovers stuff.
But details proved impossible to find: 3Key declined to answer questions about its location, staff or registration.
A week later, an update read: “Manchester City are currently carrying out further investigations relating to 3Key Technologies and the partnership has been suspended pending a satisfactory resolution of all such investigations.”
A rather odd episode – but weird crypto has become a feature of football. This weekend, doing extensive research in front of the TV, I was encouraged to buy “fan tokens”, join a crypto banking service and exchange where I was offered crypto derivatives and given the ability to borrow to invest in crypto.
You don’t have to be a crypto skeptic to worry about where unsophisticated investors are sent.
A partnership with Southampton FC has seen the club promote learncrypto.com – a crypto site aimed at neophytes. Learncrypto’s frequently asked questions argue that bitcoin cannot be in a bubble because the current price is above a previous high. It can’t be a bubble, he argues, because “you can’t reinflate a burst balloon.”
Clubs need to take more responsibility for these partnerships. As Martin Calladine, author of The Ugly Game, puts it, fans “outsource some of their judgment to their team’s business department. And it’s dangerous when clubs endorse unregulated products without consumer protection.”
It might sound a bit silly on the part of fans, but it’s often much faster and easier to fix regulations than to change human behavior.
Clubs have a different social role to other businesses and just last month there was a concrete indicator that the UK government tends to accept. When Chelsea owner Roman Abramovich was hit with sanctions, the club was allowed to continue operating partly because it is a cultural and social asset.
A recent football review led by Tracey Crouch, the former sports minister, has proposed a new regulator precisely because clubs are of wider social importance. Ministry of Culture officials have also spotted the troubling relationship between crypto and sports. Clubs, unsurprisingly, are worried about the prospect of a powerful and intrusive supervisor.
If I were looking to avoid oversights, I would start by showing that I am aware of the need to exercise my influence responsibly. Step One: Stop supporting my fans in a financially dangerous industry.
There is, of course, also a lot of play money in football – and that is troubling too. The game, however, is much more regulated and its role in football is examined from many angles – and the rules are tightened.
It’s also clear to punters that the game is – what’s the word? – gambling.
This is not always clear with crypto. On Monday, Andrew Rhodes, chief executive of the Gambling Commission, expressed concern that crypto comes with “talk about ‘investing’ and ‘trading’, but without any of the safeguards or standards that those terms should bring with them”.
He said the pattern of losses is often different from other types of gambling. People increase their investment in their chosen crypto asset over time, hoping for growth. A collapse in value can wipe them out: “When harm happens, it can be instantaneous and catastrophic, with little or no recourse.”
Getting away from the easy money of crypto marketing will, of course, be a tough sell for many football executives. But if nothing changes, a financial disaster for fans and a public relations disaster for clubs could ensue.
The clubs will be blamed. And they could end up with an even tougher regulator blowing down their necks. – Copyright The Financial Times Limited 2022