Fan groups have been fiercely opposed to Socios, fearing the platform exploits supporters’ relationships with their teams
When Inter Milan ended their iconic 26-year sponsorship with tyre manufacturer Pirelli and replaced them with a fan engagement platform called Socios, the decision was met with a mix of confusion and suspicion.
An unknown entity to many, Socios’ increasing ubiquity within the game was highlighted by the announcement that, on top of his reported $41 million annual net salary, Lionel Messi received a “large number” of fan tokens for joining PSG.
A portfolio which already included the likes of Barcelona, Manchester City, Juventus and the Parisian giants has now been bolstered by Valencia, Arsenal, Everton, Aston Villa and Leeds United.
But while Socios’ emergence is being touted as an exciting, new age for fan engagement, some supporters’ groups fear it is yet another example of fans being commodified by the clubs they support.
“Alarm bells start ringing when you see something like this coming in, you having to pay money to engage with the club.”
– Adam Willerton, Leeds United Supporters’ Trust
A new Premier League season. Lunchtime kick-off, United away. This is what it's all about.
Best of luck @LUFC!$LUFC ⚡️ $CHZ pic.twitter.com/8YxYMU39v8
— Socios.com (@socios) August 14, 2021
Days after Leeds United announced their commercial partnership with Socios, their Supporters’ Trust released a statement outlining concerns and questioning the need to monetise fan engagement.
“Using cryptocurrency, fans will be able to purchase $LUFC tokens which will enable them to vote and interact with the club in ways that those without these tokens can’t,” the statement added.
“Not only will the value of these tokens fluctuate, but non-Leeds United fans will also be able to buy and sell them, potentially profiting financially while many Leeds fans lose out.”
Leeds fans’ concerns were similar to those expressed by West Ham supporters when a similar deal with Socios was announced in the summer of 2019. The London club’s fans were against the partnership from the start, appealing to the club to cancel it. The supporters’ vehement opposition saw the club end the partnership a year later without a single token ever being issued.
Through the Football Supporters’ Association, Leeds United Supporters’ Trust (LUST) had been in contact with their West Ham counterparts before their club’s partnership was announced.
“After researching it and discovering how integral cryptocurrency is and the gamification of it, it was something we were obviously opposed to,” Adam Willerton of LUST tells JOE.
How does Socios work?
- Each partner club generates their own branded ‘fan tokens’ which give users a licence to vote on relatively minor club matters.
- The tokens can be bought on the Socios app using its cryptocurrency, Chiliz ($CHZ).
- They can also be chased down using the Token Hunt aspect of the app – an augmented reality-enabled feature which operates in a similar format to Pokemon Go.
- There are no limits to how many tokens a user can have and their value can rise and fall depending on demand.
He continues: “I understand they’ve got to appeal to global fanbases and give out-of-town fans ways of engaging with the club. I totally get that. But I don’t think charging people money for tokens linked to cryptocurrency is the way you do that.
“I struggle to see what the benefit is. If the club is saying it’s just being used for fun – choosing goal music or whatever – why do you need to charge? Why do I have to own cryptocurrency tokens to do that? Could you not just do it on Twitter or Instagram? I don’t really understand.”
Willerton does not expect Leeds to go back on its Socios partnership now. Despite his obvious concerns, he has accepted this will be difficult to change.
“Clubs have got rights to strike commercial deals, whether fans agree with it or not,” he continues. “That’s just the state of things in football and we’re never going to change that. But there is a duty of care to the fans. You can’t make deals where cryptocurrency can be sold to football fans without recognising there’s a financial risk to fans.
“They’ve got a responsibility to put safeguards in place. There’s a lack of protection for vulnerable people, for younger people getting into it.
“This is so far away from going to the match with your dad. It’s absolutely nothing to do with football and it feels like clubs are selling off their fanbases to cryptocurrency investors.”
LUST’s concerns over the need to monetise fan engagement and whether it presents wealthier supporters with the opportunity to have more influence over their own club’s decisions – no matter how ‘fun’ or inconsequential they might appear – are echoed by football finance expert Kieran Maguire.
“Are you creating two classes of Leeds fans by having these votes? If so, I think that’s unfair,” Maguire tells JOE.
“It’s all to do with trying to get more money out of a fanbase while trying to play the card of fan engagement. I, personally, don’t see that link.”
In the wake of the recent collapse of Football Index, which, unlike Socios, was a UK-licensed gambling product, Maguire is also wary of where Socios’ product might lead some of its users.
“The concern is if it’s a gateway to cryptocurrency and gambling,” he says. “People call themselves traders just like the people on Football Index did when they weren’t, they were gamblers. Is it a route into an unregulated gambling market? A lot of money can be lost very quickly because you’re always going to be behind the curve.”
As the LUST statement also points out, the fluctuating value of Socios’ fan tokens would appear to open the app up to traders – not fans – who are simply looking to make a profit at the expense of the genuine supporters Socios claim to be pitching to.
As Lionel Messi finalised his move to PSG last week, a thread of tweets by Martin Calladine (@uglygame) documented the changes to the value of the Ligue 1 side’s fan tokens. As would be anticipated, their value rose as it became more evident that Messi would imminently become a PSG player.
You would imagine that PSG fans are waking up today more excited and optimistic than ever before. But if that's so, why are Socios's PSG tokens being sold off like expiring eggs?
1/ pic.twitter.com/ZUYJiB2oHy— Martin Calladine (@uglygame) August 11, 2021
According to the Socios app, the tokens were priced a fraction below 85$CHZ only days before it emerged Messi would not be staying at Barcelona.
On the day his move to PSG was completed, however, the app shows their value as being nearly double that, reaching almost 162$CHZ. Their peak, Callandine says, came just before the signing’s confirmation. This was followed by a sharp price drop throughout the next day, ending it around 135 $CHZ.
The slide has continued in the time since. The tokens’ current market price at the time of writing is 95.62$CHZ – close to what it was before the news of Messi’s Barca departure broke.
A club signing arguably the greatest player to ever grace a football field should, you might assume, be the kind of incentive for more of its supporters to invest. Why then, as Calladine points out, would supporters – real supporters – want to pass up the chance to have a meaningful say in what goes on at their club at such an important time? The answer, he suggests, is that traders have recognised that significant events such as an imminent big transfer increase fan demand, thus driving up prices. When this happens, they cash out, leaving those genuine football fans Socios claim to target, with tokens which rapidly depreciate in value.
JOE approached Socios for comment on the LUST statement and the claims the platform is monetising fan engagement. There was no response to this.
Using Messi’s arrival at PSG as an example, JOE also asked Socios for an explanation of how the price of tokens fluctuate, and for a response to the suggestion that the platform was being used by traders with no real interest in fan engagement to profit from the football supporters they see as customers.
Socios CEO, Alexandre Dreyfus, responded with this:
“The surge in $PSG in the days prior to Lionel Messi joining Paris Saint-Germain showed the unique power of a great player to increase the interest in a football club (in this case PSG). The demand for $PSG was borne essentially out of the pure excitement of the fans, and demand for the token grew as did the appetite for PSG official merch etc, PSG social media accounts and probably also the number of potential sponsors. The price of Fan Tokens is driven by supply & demand, as well as news, including what happens on and off the pitch – we witnessed a similar rise in value when PSG saw success in the Champions League.
“Our users are mainly sports fans that purchase Fan Tokens to get closer to the clubs they love, take part in fan related decisions through polls, enjoy exclusive discounts and promotions and opt to earn unique rewards and once-in-a-lifetime experiences.
“This doesn’t mean that eventually some fans may decide to sell their Tokens at a certain point, encouraged to some extent by increasing demand, and subsequently make a profit in the same way that some people are making profits by selling limited-edition sneakers they purchased years ago that, for different reasons, have become highly valuable.
“Fan Tokens are fan engagement assets created to bring sports fans closer to the clubs they supports. Therefore, the value of Fan Tokens is based on their utility (this is, the voting rights, the access to exclusive promotions, the chance to earn rewards, etc), which not only remains the same regardless of the price, but actually increases day by day since we and our partners work hand to hand to create new opportunities for the fans.”
Dreyfus’ response will likely do very little to appease those football fans worried about what Socios’ recent growth in the game means.
“We have an affection with our football clubs that we have with no other supplier in our lives,” Maguire adds. “I don’t have it with my milkman or grocery store of the guy who cuts my hair.
“That relationship with fan and club is a unique one. No other industry has that level of brand loyalty and that means it’s up for exploitation and that’s my fear. This relationship with Socios does potentially manipulate that relationship. If it’s all above board then fine, but we’ve just come out of Football Index. You can understand why some might be wary.”
Plenty of questions remain. Do football fans desperately need to be rewarded for loyalty? Should there ever be an expectancy that they should pay to engage with a club they have loved since they first knew the meaning of football? Is this even really about fan engagement, or is it something more sinister, simply dressed up as that?
Time will tell. For now, Socios appears here to stay.
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