When football met crypto – a tale that will curl your toes

A superb new book from journalist Martin Calladine lays bare the shocking lack of care and crass ignorance that underpinned football's embrace of crypto

Towards the end of this remarkable tale, author Martin Calladine quotes Conservative MP Aaron Bell. I don’t often, I must confess, quote Conservative MPs. But what Bell said goes to the heart of why I write this Substack.

He said: “I think sport doesn’t really work well within the market model because of the ties that can come out of the community”. No Questions Asked is the story of how crypto used the brand pull of major sporting brands to boost its image and its prospects, but also of how, once again, football wilfully allowed its connection with its fans to be used in ways that could harm them – and doesn’t care.

About 10 years ago, just as everyone else was waking up to the fact that the line between secondary ticketing and ticket touting may be a bit too thin for comfort, football clubs were enthusiastically signing deals with secondary ticketing companies. Wind forward to about 2019 and, just as questions about the emerging crypto industry were starting to be raised, sure enough along came football clubs more than willing to sign up.

This is the extraordinary story of how clubs signed up with companies that didn’t exist, helped promote schemes so financially illiterate they should never have got off the ground, foisted schemes they knew were failing on their supporters, and squandered a real opportunity to form a meaningful bond with their fans. Most depressingly, but predictably, of all, it is also the tale of how they don’t care.

It’s not only the lack of due diligence that makes the jaw drop as Calladine meticulously rolls out the facts. It’s the crass stupidity. How else to describe Manchester City signing a deal with a company that five minute’s research would have revealed did not exist? Or Charlton Athletic’s NFT tie-up with a DAO (decentralised autonomous organisation) whose leader, when he could finally be tracked down, would only agree to be interviewed wearing a hoodie, baseball cap, dark glasses and a face mask? Or Fulham’s decision to sign up with and promote a crypto scheme claiming an annual return of 43% – a return any vaguely financially literate person would know is pure fantasy?

Time and time again, football clubs seem to have signed up with companies they knew little or nothing about to help promote products they didn’t understand. And football clubs are attractive targets because of their high profile and the brand loyalty they attract. If the team you support pushes a product, you are more likely to notice it. I’ve written about this before.

This doesn’t mean football fans are stupid enough to buy anything their club tells them to. But what association with a well-known club gives any product is respectability, cachet, profile. Crypto is a highly volatile area, and it has a poor reputation because it has become associated with the dark web, financial and other crime including money laundering, and scams such as Ponzi schemes. That’s not to say fiat currency isn’t also associated with these things, but fiat currency operates in an area that is far more heavily regulated. So if something goes wrong, there’s more chance of redress.

This book is not an anti-crypto tract. It recognises the opportunities blockchain could offer. But what it does do is question the wilder claims made by proponents of crypto, and puncture the cult-like hype that so often surrounds it. In short, it applies the sort of business common sense that the commercial departments of businesses such as football clubs should have used.

The book also identifies the opportunity that has been missed. Crypto tokens could offer a way to deepen the connection between club and fans, to strengthen the ties of community and involvement by giving fans, if not a stake, then a say in their clubs. But instead clubs chose to try to monetise engagement. If they wanted to give fans a say in decisions that mattered, they could. Without trying to monetise something most fans see as input they have earned by supporting their club. Calladine sets out how blockchain fan tokens could, possibly, be used to benefit fans and clubs.

But what is clear from this pacily written and carefully researched book is that clubs didn’t. They chose to take the money for something they didn’t understand, they failed in their duty of care to their customers, they allowed a highly volatile and risky commodity to be pitched as a tradeable asset to people who didn’t understand the risks they were being asked to take, they were all too willing to go along with the hype. And in some cases they appeared to be happy to go along with efforts to play down the trading aspect of what was being offered.

When Spurs recently signed a deal with Socios, the club went to some lengths to deny the tokens that were being offered were about trading and speculation – these, they said, were a membership benefit. But the scheme was based on a model in which more tokens gave the holder greater benefits, so how to get more tokens without trading? Then, surprisingly, the club agreed to the tokens being traded on the OKX crypto exchange. So much for no trading or speculation. What works for Spurs is that the scheme, administered by a third party, cost it nothing but provides an income stream from token sales. For fans who choose to invest and speculate, the odds aren’t quite so good.

What will be least surprising to anyone familiar with football is that despite the failure of due diligence and customer care, despite the crass stupidity of swallowing the hype, there has not been an ounce of contrition shown by the clubs or governing bodies of the game. Of course, they distanced themselves and ended or quietly pushed any links into the background when problems emerged. But there will be no apology, no admission of lessons learned.

Anyone still think football doesn’t need a regulator?

• No Questions Asked by Martin Calladine