Fan Engagement Company Makes Huge US Commitment

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US sports are set to see much more from fan token company Socios as they announce a major expansion into our sports scene.

Chiliz is the company behind fan tokens, launched on their Socios platform, and they announced a $50m expansion into the US sports market this week, ramping up their presence on our shores. The Maltese company has been around in Europe for a while, selling blockchain-backed fan tokens, which give supporters of sports clubs certain benefits that others cannot get.

Most recently, soccer team AC Milan launched their fan token, which earned them $6m on the first day. We could now be seeing the same for US teams after chief executive Alexandre Dreyfus announced their expansion.

“A huge focal point for us in our global growth plans is the US,” he said. “That’s why we’re opening a New York office and investing $50 million into the country’s sports industry in order to launch Fan Tokens with leading franchises from the five major U.S. sports leagues.”

The benefits for our franchises are two-fold; a fan token allows teams to engage with supporters on a level previously unseen in sport, but they also generate significant income, which can be used for the betterment of the team or club facilities.

“We head to the US with a proven track record in generating millions of dollars of revenue for some of Europe’s biggest sporting organizations,” added Dreyfus. “In 2020, we shared more than $30 million with our partners, but this year we’re targeting a minimum of $60 million.”

Fan tokens are a type of digital asset which can be bought and sold but offer the holder benefits such as voting rights on certain team issues or access to exclusive content. They’ve been found predominately in soccer, where many major European teams have adopted them. The most notable are French team Paris St Germain, who saw their token rise in value after signing star Lionel Messi in the summer. They even paid the Argentine partly in fan tokens, and he’s recently signed up to become a brand ambassador for the company in a $20m deal.

Other sports, such as MMA and tennis, have also got their own fan token under the UFC and Davis Cup brands, and there seems to be a strong indication that our own sports scene will be next. Currently, NFL allows teams to obtain blockchain sponsors, but they still can’t promote specific fan tokens. That has not deterred Socios, and Joseph Edwards, head of research at a top cryptocurrency brokerage, believes the expansion is coming at just the right time.

“Fan tokens right now are just hitting the perfect itch at the perfect time – fans are disconnected physically from their fandom, and this helps bridge that gap,” he said.

It isn’t just big clubs that have benefited from fan tokens; college sports have also become a platform for the blockchain-backed product. Kayvon Thibodeaux, a football player at the University of Oregon, launched his fan token last year. Offering access to exclusive merchandise and a dedicated Discord channel, his fan token will help fund his route to the professional game and hopefully offer investors a healthy return should he make it with a big franchise.

Whilst that type of fan token might be a slow burner, there will be no such wait for the expansion of Socios as they press ahead with their multi-million dollar US expansion in 2022.