Being an NFL team back in the day was simple. You had players, a coach and an owner. In the case of George Halas at the Chicago Bears, he was player, coach and owner from 1920-1929. A century on, and franchises have personnel rosters that rival small armies, with most teams averaging around 200 full time staff. Scouting networks extend to every high school in the nation. Marketing departments devise even more innovative plays to draw fans old and new to their team. More recently, the concept of fan engagement has come to prominence.
Investment
In the age of accessibility, fans want more from their teams than simply watching the game on a Sunday. Football has obliged, and fans can now do everything from see team training drills to communicating with teams directly via social media. The benefits for the organization are myriad. A fan invested in their team is more likely to invest financially in their team, whether that be from sharing posts and building awareness within their community, all the way through to buying merchandise and season tickets. The NFL could be about to add another medium of conversation between fan and franchise in the shape of fan tokens.
The Play
Fourteen NFL teams have signed up with Socios, the firm who issue the digital tokens. Fans hold tokens in their chosen organization(s), whose price can fluctuate, like a stock, and can buy and sell as they wish. Token holders can access an app to provide input and opinion on team decisions, allowing them to have a voice and the organization to gauge the mood of the fanbase. Holders can also gain exclusive perks like access to exclusive merch, priority ticketing, and the chance to win meet-and-greets with the clubs’ stars.
The tokens are purchased with a cryptocurrency called Chiliz ($CHZ). The Malta-based Chiliz company are looking to make big leaps within US sports, having also inked deals with the UFC and Golden State Warriors. Fan tokens have proven popular in Europe, primarily in soccer, which is the dominant sport on the continent, and Chiliz are now working with big names in the game like Arsenal, Juventus and Paris St. Germain. European soccer clubs grew from working class communities, so fan engagement was a natural thing – they were part of the community they were situated in. As modern media has transformed these clubs into global giants, fans are increasingly located all over the world. Manchester United are wildly popular in India, with supporters clubs across the subcontinent. Fan tokens offer a way for fans who may not be able to get to games to have more of a stake in their club. Clubs enjoy a share of the revenue from trading tokens, with Chiliz CEO Alexandre Dreyfus disclosing more than $30m was disbursed amongst partner organizations in 2020.
The Future
Fan tokens are not yet available in US sports. While a tradeable entity, they don’t fit under SEC purview, and there is bureaucracy to be navigated before American regulation catches up to the technological platform. However, with the New England Patriots recently joining the Atlanta Falcons, Baltimore Ravens, Chicago Bears, Cleveland Browns, Los Angeles Chargers, Los Angeles Rams, Miami Dolphins, New York Giants, Philadelphia Eagles, Pittsburgh Steelers, San Francisco 49ers, Tampa Bay Buccaneers and Washington Commanders in signing up to issue them, it can only be a matter of time.
As teams look to maximize revenue streams – and fans demand ever more content for their cash – expect to see fan tokens having a big impact in American sports when they hit. That old coaching cliché rings true – they hit all the measurables.
