Portugal’s biggest football club, S.L Benfica has formally partnered with blockchain-powered fan interaction platform Socios to establish a fan token according to a report by Reuters, It is the first club in the country to join the cryptocurrency community.
“We have been paying very close attention to Digital Assets,” SL Benfica CEO, Domingos Soares de Oliveira, said in a statement issued by Socios.com.
“It’s a market which has been influential in our industry of late. Benfica is constantly focused on searching for and delivering a positive experience to our fanbase. We are delighted to be partnering with Socios,” he added.
Fan tokens are a cryptocurrency that allows fans vote on primarily minor team decisions. Goal celebration songs, armband messages, jersey designs, dressing room messaging, and official bus designs are just a few options available to fan token holders.
Fans can sell their tokens at higher prices to make little capital gains. These tokens can be traded on exchanges just like other digital currencies.
Socio.com, which says it provides tokens for clubs like Manchester City, Barcelona, Paris St Germain and so on, claims it generated about $200 million for its partner clubs in 2021.
Like Benfica, some other clubs have shown interest and are starting to see its adoption as a new source of revenue as well as a nice experience for its fans.
Cryptocurrency in the sports world
Despite the fact that several regulators have issued investor cautions regarding digital assets, an increasing number of people are embracing the concept, with some high-profile figures expressing their support for the crypto market.
In light of this, the sports industry is constantly looking for new ways to collaborate with the cryptocurrency industry.
In 2019, the NBA signed its first cryptocurrency deal with Coinbase, allowing the crypto platform to be used across all of the NBA’s platforms, including the WNBA, NBA G League, NBA 2K League, and USA Basketball, in honour of the league’s 75th anniversary.
In January, Crypto.com partnered with NBA superstar LeBron James in a $1 billion effort to promote blockchain and cryptocurrency understanding in educational settings.
In March, Lionel Messi, a football superstar player, struck a three-year deal worth more than $20 million to promote the digital token asset platform Socios.com. This occurred after his transfer from Barcelona to Paris Saint-German.
Also, Bitcoin has partnered with an Italian football team, Lazio to fund its fan token platform program.
This crypto venture idea is a great win for Benfica, considering the huge financial loss of €17.4 million the club experienced in the last season – the first of its kind in 11 years. It also led to the arrest of the club’s president, Luis Filipe Vieira and a drastic fallout in the club’s stock.
It appears that the club is still struggling to recover from this setback, as the club revealed another loss of €31.7 million in the first half of the 2021-22 season in March this year.
Benfica’s matchday revenue was close to nothing in 2021, plummeting from €22 million to €0.5 million (98%). Broadcast revenue fell from €87 million to €66 million (25%) due to failure to qualify for the UCL group stages.
Commercial revenue in 2021 fell from €31 million to €28 million (9%) due to restrictions in the 2020/21 season limiting corporate hospitality and sponsorship activation opportunities.
It is expected that the club’s finance notes will change with this announcement.
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