Cryptocurrency has recently made a splash in the world of sport, with Lionel Messi the latest star to get involved.
Teams in a number of different sports are making sponsorship deals with crypto companies. For instance, Red Bull Racing signed a massive £111 million, 3-year deal with exchange company Bybit.
Other examples include Crypto.com buying the naming rights to the arena of NBA franchise Los Angeles Lakers. Several football teams also have partnerships with fan token company Socios. Some of Europe’s elite like Barcelona, Juventus, Arsenal, and Manchester City have deals with the Cryptocurrency platform.
However, the sponsorship does come with some controversy. Critics do not agree with advertising these companies.
A controversial partnership?
The clubs involved sell tokens specific to their team. Fans buy the tokens using real money; they can then trade the tokens as a cryptocurrency on the blockchain. By owning these tokens, fans of certain teams have the opportunity to vote on different club events and can receive real-world benefits.
Unfortunately, people who purchase these tokens can also lose money. As they are on an open market, their values can rise and fall – therefore, investors can potentially lose out.
The crypto trading market – including sports team tokens – is not regulated, as it is a new industry. The buyer has limited protection against the instability of the market.
Furthermore, Socios have been on the receiving end of some allegations of non-payment. Their CEO Alexandre Dreyfus reportedly advised the company to not pay ambassadors in their cryptocurrency.
In addition, staff of the crypto platform claimed Socios didn’t pay them until they threatened legal action, according to the Daily Mail.
What is Lionel Messi’s cryptocurrency deal worth?
Despite the controversy, Lionel Messi recently signed a massive deal with the cryptocurrency company Socios.
Upon his arrival at PSG, the French team gave Messi a payment of PSG fan tokens, the type that allows fans to vote on small club matters. PSG praised the move, calling the crypto payment “a world-first for such a high-profile signing”.
Now, Messi’s deal with Socios is worth a reported £15 million. As part of the deal, the Argentine attacker will become a key lead for the crypto company. He will also feature in a promotion ahead of the 2022 World Cup in Qatar.
Messi’s crypto sponsorship runs for three years. Interestingly, unlike the deal struck as part of his move to PSG, the forward will not receive any payment in crypto.
Despite the debate surrounding crypto companies, the lucrative financial possibilities keep sports teams and players interested in the blockchain.
Featured Image Credit: Getty
