In the span of less than 10 days, the Green Bay Packers sold 138,000 shares of stock in November.
But the fans, who spent a combined $41.4 million, didn’t receive anything in return resembling a traditional stock. In reality, they aren’t getting much more than a piece of paper. “Investors” who buy the stock can’t profit off the purchase in any way, per the Packers website.
That’s where Socios.com — a blockchain-based token company that partners with sports teams — sees an opportunity for actual investing in sports teams.
“We've seen a great, great ramp-up in fans,” Socios.com Chief Strategy Officer Max Rabinovitch said on Yahoo Finance Live recently (video above). “Obviously the first folks that found our product… were people that were already acquainted with crypto, and more and more we see... an increasing percolation of casual and more mainstream fans coming to the app.”
Socios.com enables users to participate with various teams by investing in fan tokens for their respective favorite sports teams.
The fan tokens operate like other cryptocurrencies or stocks, rising or falling in value based on fan sentiment. The more fans participate in the various club activities, the higher their ranking.
“It's market-driven demand,” Rabinovitch said. “The more fans that want to enter this ecosystem, the higher the token goes.”
F.C Barcelona, Juventus F.C., and Paris-Saint Germain (PSG) F.C. all have tokens with Socios.com. PSG tokens were part of the contract for international superstar Lionel Messi when he transferred to club in August, and there are currently 3.1 million PSG tokens circulation, per Coinbase. The token has a $51.9M market cap and currently trades for nearly $16 per token.
Teams make money off the initial offerings, but the key is the direct-to-consumer lifeline with token holders for special offers that can initiate further fan engagement. Some teams have held special events such as meet-and-greets for token holders that often engage with the platform.
'We're going into the NFL and into MLS'
If all this sounds foreign to a U.S. sports fan, it should. Socios.com hasn’t created tokens for any of the four major sports leagues in the U.S. But change could be coming.
Rabinovitch told Yahoo Finance that Socios.com modeled its initial concept after the Green Bay Packers stock offering, aiming to take the Packers fan appeal a step further by gamifying the situation.
And on Nov. 12, Socios.com partnered with Kraft Sports & Entertainment in a marketing deal that will provide Socios.com visibility in Gillette Stadium during New England Patriots and New England Revolution (Major League Soccer) games as well as advertising space on the Patriots practice facility’s roof.
The partnership won’t be the NFL’s introduction into blockchain and cryptocurrency partnerships, something the league hasn’t committed to as of yet. Still, it’s another step into the U.S. market, where Socios.com has already entered marketing partnerships with more than half of the NBA franchises.
“It's kind of our first public signal that we're going into the NFL and into MLS as well,” Rabinovitch said. “And it's not something that we take lightly because there's a long, let's say, quiet, invisible road that goes to getting to a point where us, where a team, where the league that the team plays in, all feel comfortable enough that we're allowed, essentially, to make a big splash publicly and announce our intent to enter into this new sports vertical.”
Josh is a producer for Yahoo Finance.
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