MANCHESTER, England (Reuters) – Blockchain sports firm Chiliz, which is heavily involved in European football, will invest $ 50 million in an expansion in the United States, chief executive Alexandre Dreyus told Reuters.
The Malta-based company is offering tokens to fans that allow them to vote in a series of polls and receive special promotions and rewards, creating what it calls a ‘new digital revenue stream’ for sports organizations through engagement with global fan bases.
Fan tokens are listed on Binance, one of the world’s largest cryptocurrency exchanges, and last week Serie A club AC Milan became the latest team to launch their token, generating $ 6 million in revenue on day one.
The move follows the launch of tokens, on the Socios.com company’s fan engagement platform, for other top clubs such as Juventus, Paris St Germain and Barcelona.
Cryptocurrencies and related technologies have gained renewed interest in recent months, as investors and mainstream businesses embrace bitcoin, the most popular digital token.
Dreyfus said his company is now opening an office in the United States as it targets the country’s major sports franchises.
“The United States is a major focal point for us in our global growth plans. This is why we are opening an office in New York and investing $ 50 million in the country’s sports industry to launch Fan Tokens with the main franchises of the five main US sports leagues, ”said Dreyfus.
“We are heading to the United States with a proven track record of generating millions of dollars in revenue for some of Europe’s largest sports organizations. In 2020, we shared over $ 30 million with our partners, but this year we are aiming for a minimum of $ 60 million. “
Dreyfus said the FanMarketCap, a price and market intelligence tracker run by Chiliz, currently stands at just under $ 200 million and he expects it to grow. with the addition of new European football clubs in the coming weeks.
Chiliz is also in talks with Formula 1 and esports teams, he added.
Joseph Edwards, head of research at cryptocurrency brokerage Enigma Securities, said now is a good time for clubs, which must increase their income after the success of COVID-19 restrictions, given the current popularity crypto markets.
“Fan chips right now are just hitting the perfect itch at the perfect time – fans are physically disconnected from their fandom, and that helps bridge that gap,” he said.
“It must be said that Socios has generally been very smart with these launches – I can’t think of any that have been a headline failure, even in the overall bearish crypto market – but there’s a reason they’ve got them. intensified since late.
“It strikes you right at the present moment that sports entertainment is in.”
Edwards said fan tokens were growing in popularity as a new type of digital asset – known as the non-fungible token (NFT) – exploded in popularity during the pandemic as enthusiasts and investors alike scrambling to spend huge sums of money on items that only exist online.
Giorgio Ricci, revenue director for Italian champions Juventus, stressed that tokens are not limited to income generation.
“(It) is not just a short-term solution to the problems caused by the pandemic,” he said.
“It is a solution to the longer term problem of how to engage with the 99% of fans who are unable to watch the games from the stadium or who have never set foot in Turin.
“Under normal circumstances our stadium accommodates 41,000 people, but recent estimates suggest that our global fan base is around 400 million people, many of whom are thousands of kilometers away,” he added.
Written by Simon Evans; Additional reporting by Tom Wilson in London; Edited by Ken Ferris