Following the steps of NFL’s New England Patriots, thirteen other franchises in the league have partnered with cryptocurrency and fan token platform Socios. Continuing the trend of Socios’ previous deals in the U.S., it seems that no digital assets will be launched, at least for the time being.
The partnerships are described as “multi-platform marketing” and should include in-stadium advertising and Socios organized fan experiences such as meet and greet events and VIP access to games, but vary by team. The current arrangements for the partnership seem closer to sponsorship than an intellectual property licensing deal.
For example, the SuperBowl champions Los Angeles Rams, are one of the new partners. The Rams’ benefits include fans getting access to exclusive merchandise, events, and votes, such as selecting the gameday song.
“We are excited to deepen the connection with our most loyal fans through the exclusive offerings that will be redeemable using Socios.com all year round,” said Los Angeles Rams Chief Commercial Officer Jennifer Prince. “Their technology and digital platforms will enhance our fan experiences and make them accessible to Rams fans around the globe.”
The other NFL teams include the San Francisco 49ers, Cleveland Browns, Tampa Bay Buccaneers, LA Chargers, Washington Commanders, Miami Dolphins, Philadelphia Eagles, Atlanta Falcons, New York Giants, Baltimore Ravens, Pittsburgh Steelers and Chicago Bears.
Currently, twenty-four teams in the NBA have a similar arrangement with the platform.
In contrast, with European-based deals, Socios has been buying the rights from sports teams to launch fan tokens exclusively. This may give a perception of fans having a direct relationship with the team, but in reality, the IP license makes it one step removed.
McLaren’s F1 team faced some issues with this structure as it had Bitci as a sponsor and had also sold the rights to Bitci to issue its fan tokens. McLaren recently ended the sponsorship agreement. However, since the rights had already been sold for the fan tokens, they remained up for purchase on Bitci’s website.
No fan tokens yet
Meanwhile, one of the reasons for the U.S. teams not issuing fan tokens is the uncertain legal stance of cryptocurrencies, with many being considered securities by the SEC.
But Socios is aware of these challenges and is working to overcome them. While it awaits a clearer picture for its tokens, the partnerships will help the brand to become more recognized in the market and is the first step in a relationship with the teams.
On the one hand, fan tokens can be entertaining for fans by providing exclusive perks, sometimes at an affordable price. However, there are risks, such as the volatility in price, which is similar to other cryptocurrencies. Manchester City’s fan tokens are down 58% from their peak, PSG’s has dropped by 77%, and Barcelona’s 89%.
Another concern regarding fan tokens is that there’s a huge token overhang. Only a small fraction of the potential tokens are issued upfront compared to other cryptocurrencies. This results in the potential for dilution, and hence the price could drop if too many are issued at once.
Meanwhile, despite expanding in the NBA and now NFL, Socios is continuing to increase its global footprint in soccer. Messi is now a global brand ambassador, and it signed a partnership with UEFA for fan tokens.