Thursday, August 12 2021, 16:30 CAT | Source: Reuters
Soccer star Lionel Messi’s signing on fee at Paris St Germain includes some of the French club’s cryptocurrency fan tokens, in the latest big name endorsement of new digital assets.
The Argentine, 34, left Spanish side Barcelona and signed a two-year contract with Qatari-owned Paris St Germain (PSG), with an option for a third year, on Tuesday.
Confirming an exclusive Reuters report, PSG said on Thursday the tokens were included in his “welcome package,” which media reports have estimated at 25-30 million euros ($29-35 million). The club did not disclose the proportion of tokens in the package, but said the amount was “significant”.
Fan tokens are a type of cryptocurrency that allow holders to vote on mostly minor decisions related to their clubs. Among clubs to launch tokens this year are English Premier League champions Manchester City and Italy’s AC Milan. Messi’s former club Barcelona launched one last year.
The tokens are increasingly seen by clubs as a source of new revenue and Socios.com, which provide the tokens for PSG and other top clubs, says tokens have generated nearly $200 million for its partner clubs in 2021, with PSG already seeing revenue from the Messi deal.
Like bitcoin and other digital currencies, fan tokens can be traded on exchanges. They also share in common with other cryptocurrencies a tendency for wild price swings, leading some regulators to issue warnings to investors about digital assets.
Still, several high profile business and entertainment figures have backed crypto assets, with Tesla boss Elon Musk, Twitter founder Jack Dorsey and rapper Jay-Z among those to have shown support for bitcoin.
PSG said there had been high volume of trading in its fan tokens after reports that Messi was set to join the club.
Trading volumes exceeded $1.2 billion in the days preceding the arrival of the six-times winner of the Ballon d’Or world’s best soccer player award, it said.
“We have been able to engage with a new global audience, creating a significant digital revenue stream,” said Marc Armstrong, PSG’s chief partnerships officer.
The price of PSG’s fan token rallied this week on rumours of the Messi deal, with new sales generating around 30 million euros and PSG taking an unspecified majority of that amount – at least 15 million euros, a source with knowledge of the matter said. PSG declined to comment.
Fan tokens’ price moves can have little connection to on-field performance or results.
PSG’s token, which has a market capitalisation of about $52 million, soared over 130% in just five days amid speculation over Messi’s arrival to an all-time high of over $60 on Tuesday. They were last down 10% at about $40, according to the CoinMarketCap website.
Alexandre Dreyfus, the CEO of Socios.com, said PSG was benefitting from its token and other clubs could imitate its deal with Messi.
“I believe this could be the start of a new trend as fan tokens and Socios.com play an increasingly prominent role across sport at the very highest level,” he said.
The arrival of Barcelona’s record scorer, with 672 goals, will boost PSG’s ambitions and is expected to increase revenues from commercial deals and merchandise sales.