This time it’s different.
This is the message Manchester United wants to send as they have become the latest sports team to introduce a range of non-fungible tokens (NFTs), a word increasingly associated with scammers, scammers and chart lines that are falling down.
United believes the sector can bring real value to its fans around the world and is launching a new NFT collection that the club hopes will form a “community dedicated to educating, rewarding and connecting their global fan base through digital and the real world.”
This NFT scheme will run on a blockchain – a type of open source computer network – run by Tezos, which is already in Manchester United’s training suite as part of a sponsorship deal worth more than £20 million ($23.7 million) a year. .
Cryptocurrency prices are now falling and companies are failing, and FTX — one of the largest exchanges for buying and selling these volatile digital assets — filed for bankruptcy on Friday.
However, Manchester United believes that this outside noise is irrelevant to their scheme, which they believe can provide really useful and attractive things to their fans around the world.
The club also plans to donate 20 per cent of proceeds from subsequent NFT fees to the Manchester United Foundation.
What does United have to say about the new scheme?
“As with old football traditions such as collecting matchday programmes, club badges and sticker books, fans will soon have an additional opportunity to collect this new type of digital memorabilia,” said Phil Lynch, the club’s CEO of Digital Products and Experiences. .
The first NFTs will be gifted to fans rather than sold, while later NFTs will cost £30.
Later ones may cost more, but the club hopes the lower price will avoid the problems associated with other schemes where fans accumulate huge sums and then lose out when their value drops.
The club says they have consulted with fans on how best to organize what they hope will help provide “unique and enhanced opportunities to interact with our incredible fans.”
Mason Edwards, commercial director of the Tezos Foundation, says the partnership intends to create “digital collectibles that the club and its followers will cherish for years to come.”
Manchester United is one of the most popular sports teams in the world and many of those who love this club will never set foot on Old Trafford.
The club hopes that Tezos NFT will be a way to engage and interest these supporters in the exciting new digital world.
What’s the catch?
NFTs in sports involve transactions in which fans buy what they believe can be a profitable financial investment, which then quickly drops in value, effectively working as a money transfer from the poor to the rich.
The most famous is John Terry’s Ape Kids football club, which lost almost all of its value after being promoted on social media by the former Chelsea captain.
Official club schemes like Manchester United seem to be more reliable, but many of the same problems still exist.
The idea of NFTs as “digital collectibles”, akin to software or stickers, makes some sense at first glance.
But there’s little evidence that sports fans are genuinely interested in NFTs as supposed “collectibles” rather than just a vehicle for financial speculation, and few schemes seem to have stood the test of time and are genuinely cherished by collectors, in contrast to their financial value.
It is true that other major players in football who have more recently entered this world, such as world football’s governing body FIFA, seem to feel that it is better to work with more quantity and lower cost.
United are hoping this approach will mean a more sustainable scheme that won’t result in massive financial losses for fans.
Who else has tried?
This criticism is no longer hypothetical or a matter of opinion.
The facts are that the sport’s recent forays into the world of cryptocurrencies and NFTs have proven completely disastrous. This became the subject of debate in the UK Parliament earlier this month when MP Aaron Bell criticized the clubs for “low quality due diligence”.
“These were literally cartoon images of monkeys”: Politics, football and cryptocurrency
Earlier this year Athletic showed how 19 out of 20 Premier League clubs have been promoting crypto products that have fallen in value, including the Tezos token, which has lost about 70% of its value since appearing in Manchester United training kits.
The past year is littered with examples of schemes uncovered by sports teams that rose briefly amid hype from anonymous financial speculators but quickly fell in value, with little or no input from the club’s real fans.
This means that sports enthusiasts spend money on what they think can be a profitable financial investment, but it quickly drops in value, so they lose money.
Earlier this year, Liverpool announced the LFC Heroes Club NFT scheme, which was a complete failure, with only 6% of the NFTs for sale ever bought.
Every time the club posted about the scheme on social media, the response was overwhelmingly negative. The club has not tweeted about the scheme since April, and the official LFC Heroes Twitter account has not tweeted for two months.
🔴 Less than four hours left 🔴
Take part in an interactive journey with @LFCHeroesClub. Join the online community and unlock all privileges 👇
— Liverpool FC (@LFC) April 4, 2022
Liverpool NFTs are now trading for a lot less than their purchase price, and the Discord server — a social media server closely tied to the world of cryptocurrencies and NFTs that Manchester United also uses for its Tezos scheme — is mostly silent.
Why is Manchester United doing this?
While people in the cryptocurrency world often call for “education,” believing that the public only needs a deeper understanding of blockchain technology to understand that NFTs and cryptocurrencies are valuable and interesting, the direction of the movement increasingly seems to be the opposite.
If a year ago sports fans were generally baffled by the idea of cryptocurrency, now many understand what it is and hate it.
Reaction to this announcement is likely to be extremely negative, as was the case when Liverpool released NFT Heroes in May – perhaps even more so given the wider crypto crash since then – which begs the question why United are doing this.
The obvious motive is financial, although the club insists it’s not just money extortion like the ones other clubs are so heavily criticized for. The first releases will be free, and paid “drops” will appear later.
The existing deal between Tezos and Manchester United is worth over £20m a year. The motivation for Tezos makes sense, deepening their ties to one of the world’s most famous brands.
But the Tezos token has lost 70% of its value since it partnered with United in early February.
Both Tezos and the club insist that the price of the token does not matter, since it is not about a financial investment.
Speculation or “community”?
Every time a sports team unveils an NFT scheme, they use buzzwords like “Web3”, “utility” and “community” and insist that the project has nothing to do with financial investment.
But there is now a long trail of evidence that there is little behind any of these schemes other than financial speculation that transfers money from fans to clubs and athletes in exchange for very little.
“Web3” is corporate jargon that tries to convince consumers that it’s an exciting technology similar to the early Internet, downplaying the connection to cryptocurrency tokens that many football fans now associate with scams, failed investments, and footballers’ attempts to sell images of cartoon monkeys. .
Indeed, there is great “utility” in things like match tickets or club shop discounts that are often offered in conjunction with NFTs, but there is no clear reason to associate this with volatile cryptocurrency tokens.
The football club is one of the most authentic and authentic “communities” in the world, and NFT advocates believe the technology can create new digital communities.
The “community” claim was made by the McLaren Formula One team last year when it unveiled a similar project in partnership with Manchester United’s Tezos blockchain.
Join the conversation! 💬
— McLaren (@McLarenF1) October 24, 2021
This Discord server no longer exists.
Perhaps Manchester United’s scheme will be different, and that will indeed form an exciting community that will last for a long time.
Perhaps people will be behind this for reasons completely divorced from financial speculation.
Perhaps this time it’s different.
But given the ever-embarrassing implications for fans and NFT-promoting teams, you can be forgiven for expecting otherwise.
(Top photo: Julian Finney/Getty Images)