The sports industry has been hit hard by the coronavirus pandemic. Most leagues were suspended, and then teams played without an audience for an extended period. Sports clubs have started looking for new sources of income, and the crypto industry has arrived to help with some juicy deals.
Numerous partnerships between major sports clubs hit the headlines last year. Even national teams and major club federations have joined the trend. So it became even more surprising when FC Barcelona and Manchester City, two of Europe’s biggest football clubs, ended their crypto-related sponsorship deals the same week.
FC Barcelona have canceled their partnership with non-fungible token market (NFT) Ownix following the arrest of Moshe Hogeg, an Israeli crypto entrepreneur who was among the firm’s consultants. Ownix was quick to Deny any organic link to Hogeg in a Twitter stream. Cointelegraph has contacted Ownix, but the company declined to comment further on the matter.
Manchester City have also suspended their deal with 3Key, which the club announced as a regional partner in “Decentralized Financial Analysis and Consulting Technology” a week earlier.
Related: FTX buys Super Bowl ad space to promote crypto to 92 million TV audience
The sports industry is eager to join the hype of NFT, which Morgan Stanley plans to become a twelve-digit market by 2030. Timothy Mangnall, who helps sports clubs better understand crypto and the NFT world through his NFT Capital Block’s agency told Cointelegraph that it’s easy for clubs to forget to do basic due diligence on business and employment history before embarking on long-term business deals.
Barcelona had been approached by a number of NFT marketplaces in the months leading up to the announcement of the deal with Ownix. Many competitors already had a strong track record in the NFT space, but Barcelona chose to go with a rather unknown brand in that space, Mangnall explained:
“What this shows me is that Barcelona have only looked at the money on the table rather than doing what they would with any other sponsorship deal, which is due diligence.”
The crypto market is full of small NFT companies that are willing to shell out ten times as much money as the big exchanges just to make big deals with sports clubs, he added, warning that it should be. an alarm signal for any club, which should then double. on its internal review process and a deep dive into the business and owners.
Related: Staples Center in Los Angeles to be renamed Crypto.com Arena
Tokenization is a blockchain technology product that attracts large companies with brand values and massive fan bases, adds Ahmet Usta, co-author of Blockchain 101 and co-founder of the Avaxtars and Crypto Mandala NFT projects: “Clubs naturally aim to achieve high returns from Fan Tokens and NFTs as early adopters. However, they should focus on adding value with innovation and strong business models to their token and NFT offerings. “
NFTs are not going anywhere and will be a part of our future, summed up Timothy Mangnall, adding that “clubs shouldn’t be afraid to miss the hype right now, but take a step back to understand the industry and plan for the next. Next 3 years at least.