Tottenham have announced a partnership with “fan engagement” firm Socios — but the club’s supporters’ trust says it is “deeply concerned” by the move.
Spurs said on Thursday that a “multi-year” deal would see members and adult season-ticket holders offered fan tokens to provide supporters worldwide with access to a “unique range of club-related activities, rewards and experiences”.
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Socios already has deals with five of the other 19 Premier League clubs — Crystal Palace, Arsenal, Aston Villa, Everton and Manchester City — as well as Barcelona, Juventus and a raft of other top teams in continental Europe. It issues tokens based on blockchain, the technology that underpins cryptocurrencies such as Bitcoin as well as non-fungible tokens (NFTs).
While there was a lot of excitement in the football world about cryptocurrency and NFTs a couple of years ago, that has largely dried up as tokens have crashed in value and many people have lost money.
The tokens are marketed to supporters as an opportunity for “fan engagement” by facilitating votes on club matters via the Socios app. But The Athletic has previously detailed in a special investigation how, alongside polls and competitions, the Socios ecosystem is a hotbed of volatile and unregulated financial speculation, with tokens rising but often, recently, tanking in value.
Tottenham said their fan tokens would “build on the many benefits of our existing membership scheme”, adding that the partnership was “another example of how the club is working to create additional recurring sources of revenue to reinvest in our football activities”.
But the Tottenham Hotspur Supporters’ Trust (THST) said it was “disappointed” not to have been consulted and added in a statement: “THST expects the club to safeguard our supporters against financial loss but this partnership seemingly does the opposite by exposing fans to potential losses.”
Tottenham Hotspur Supporters' Trust is deeply concerned by the Club's multi-year partnership with Socios, as announced this afternoon. With replies open… 👀https://t.co/6KAiqSNi9D
— THST (@THSTOfficial) September 28, 2023
Socios said that “fans across the world are being rewarded with one-of-a-kind experiences simply by showing support for their club through fan tokens”.
The company previously told The Athletic: “We don’t promote fan tokens as a way to make money, but as a tool to engage with sport organisations in ways that were simply unimaginable only a few years ago.”
What is Socios?
Socios was founded by Alexandre Dreyfus in 2018 but has catapulted from obscurity to the European footballing mainstream after signing big sponsorship deals with dozens of top clubs.
A deal with Inter Milan in 2021 saw tyre manufacturer Pirelli replaced after 23 years as their main shirt-front sponsor, earning the Serie A club around €20million (£17m). Socios-partnered clubs have been based in Spain, Italy, France, the UK, Argentina, Turkey, Belgium, Switzerland, Cyprus, Poland, Croatia, and the Netherlands, as well as with Portugal and Argentina national teams, and Socios has offices in Malta, Spain, Turkey, South Korea, Switzerland and the United States.
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Socios tokens are essentially digital assets that allow their holders to vote on issues at a particular football club but also rise and fall in value when traded online.
While Socios made lots of noise in 2021 and 2022 as the broader crypto market was booming, over the past year, there has been less of the hype as tokens have generally fallen in value — which makes this deal with Spurs very surprising.
How do the Tottenham fan tokens work?
Tottenham say that One Hotspur+ members and season-ticket holders aged 18 and over will be offered five free fan tokens once they become available next Wednesday, October 4.
Bring your Passion to N17.
The @SpursOfficial FTO®️ goes LIVE on 4/10!#PassionForSpurs pic.twitter.com/4iBitnu6rQ
— Socios.com (@socios) September 28, 2023
Following the initial launch, Spurs fan tokens will become available to non-members for an initial price of $2 each (approximately £1.65).
Tottenham said that fans will be sent a voucher code via email that can be redeemed in the Socios.com app, providing “instant access to club-related polls, predictors, quizzes and competitions, through which points can be gained to unlock rewards and experiences”.
The club said that the market “will not have an impact on the initial $2 cost of a Spurs Fan Token” but noted that the “cost of future open-market purchases may vary”. For other clubs, fan tokens have been sold at a similar opening price and then generally surged briefly before slumping in value.
Non-free Spurs tokens can only be bought with Chiliz, Socios’ own cryptocurrency.
What are Chiliz?
Tottenham on Thursday said in a club statement that the ”use of free fan tokens does not involve Chiliz”.
But the statement added: “Chiliz — a cryptoasset on the Chiliz blockchain — would only be required for the purchase of additional fan tokens.”
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That is because Socios fan tokens are not purchased using dollars, pounds et cetera. It requires the intermediary step of buying Socios’ cryptocurrency, Chiliz, to pay for a token — unless you are given a free one by your club. So not only are tokens bought using cryptocurrency, but the tokens themselves are also liable to volatile price movements within that framework, doubling the financial risk.
Chiliz is Socios’ parent company. But Chiliz itself is bought and sold on exchanges without any link to football. Its price is at the whims of anonymous traders around the world.
How have other Premier League fan tokens performed?
Five Premier League clubs already had deals with Socios: Arsenal, Aston Villa, Crystal Palace, Everton and Manchester City. Leeds United, relegated to the Championship at the end of last season, also have an agreement with the company.
But all of these tokens have plunged in value since they were launched, as the following graphs from CoinMarketCap demonstrate.
Arsenal ($AFC)
Aston Villa ($AVL)
Everton ($EFC)
Leeds United ($LUFC)
Manchester City ($CITY)
As a financial investment, the general trend is clear. Socios, though, has repeatedly claimed the product has nothing to do with investment.
What else has the THST said?
On Thursday, the trust expressed its concern that fans’ support would be monetised “in a system they do not understand”.
The statement read: “We understand the club needs to develop its commercial partnerships but this relationship will see engagement passed on to a third-party provider enabling it to monetise fandom.
“THST is yet again disappointed not to have been consulted on this move or to have been forewarned about this afternoon’s announcement.
“The club says One Hotspur members and season-ticket holders will be provided with one and five free tokens respectively and the arrangement then encourages fans to enter a cryptocurrency ecosystem of which many fans will have little knowledge but will be encouraged to purchase further tokens to ‘win’ things.
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“The club is trusted by fans and we fear many will end up in a system they do not understand that is designed to monetise their support and love for the club. It is important there should be no financial or technological barriers to fan engagement yet this relationship potentially creates both.
“THST expects the club to safeguard our supporters against financial loss but this partnership seemingly does the opposite by exposing fans to potential losses.”
Tottenham, in response to the THST statement, said they had engaged with their fan advisory board “in advance of today’s announcement”.
The club pointed to forthcoming regulation and highlighted that Socios, “along with industry leaders, were part of industry engagement on new rules”.
What regulation is in place?
Britain’s Advertising Standards Authority (ASA) issued a landmark ruling in December 2021 concerning Arsenal’s promotion of Socios “fan tokens”. It decided the Premier League club “trivialised investment in cryptoassets and took advantage of consumers’ inexperience or credulity” in a promotion for Socios that featured three of their first-team players.
Arsenal called for a review of the decision in a move supported by Socios, but the ASA upheld its ruling last summer, determining that Facebook adverts by the club were “misleading” and “irresponsible”. Arsenal said they were “disappointed” but insisted they had “provided information regarding financial risks” and vowed to continue to be compliant.
From October 8, cryptocurrency promotions will be regulated by the UK Financial Conduct Authority and adverts for products or services will have to carry a clear risk warning.
Socios says it was part of the engagement process on these new rules.
(Design: Sam Richardson)