In the late nineties and early noughties, it became somewhat fashionable for football clubs to float on the stock market in order to raise capital. Fast forward to 2019, and now only a handful of clubs remain on worldwide stock exchanges. However, a quick google news search paints an interesting picture of how the value of a club is influenced as much by off-pitch activity as it is by what happens on the pitch.
Take for instance Manchester United’s recent sacking of Jose Mourinho. Shortly after the announcement, the club’s share price rose by 5% or $150 million. Now imagine that Manchester United had partnered with Socios.comand that Manchester United Fan Tokens were in circulation — in this scenario, demand for the Fan Tokens would have no doubt increased, mirroring the stock market, and increasing the value of the Tokens.
Just like the stock market, the value of Fan Tokens will fluctuate; the price will rise and fall according to supply and demand, and the worth will be affected by on and off-pitch activity such as new player signings, league performance and yes, managerial changes.
This fluctuation, which will be purely driven by fan emotion and engagement, will lead to a new narrative for our partner football clubs — new storylines will be created for media, and new, valuable content will be generated for the clubs themselves, and not just the ones that are listed.
It’s safe to say that football clubs are not a sound investment opportunity, with no real financial reward for shareholders, and certainly no opportunity to influence decision-making. For many, being a shareholder in a football club is much more of an emotional experience — a status symbol, an indicator of club loyalty, support and passion — rather than a long-term investment plan.
And this is the point. Through Socios.com, we are tokenizing this emotional connection and a fan’s influence over their club. Ownership of Fan Tokens does not represent equity or shares in football clubs, and equally should not necessarily be viewed as an investment plan, but ownership does offer an entirely new way for fans to engage with their club or clubs. Moreover, ownership offers a place for a fan’s voice to be heard, and a place where their passion will be rewarded. Ultimately, owning Fan Tokens gives fans far more interaction, a greater voice, as well as more power and influence over the clubs they love, than being just being a shareholder.
As it stands, and with a few exceptions, the stock of football clubs remains largely stagnant and illiquid. However, as many European football clubs grow into professionally-managed global businesses, monetising and engaging their global fan bases may be an increasingly viable consideration.