Skip to main content

Barca's mysterious crypto deal points to bigger problem in football

As one of the world’s most prominent sports teams, it’s no surprise that FC Barcelona has dozens of companies lining up to associate with it. Partnerships range from headline sponsors Nike, Spotify and Philips Ambilight to local cava producer Codorníu via toolmaker Stanley and Malaysian lender Maybank.   Those commercial partners get to sell their wares to Barça’s vast fan base and bask in the reflected glamour of the club that gave us Lionel Messi. In return, they get cash.

Earlier this month, Barca made a curious addition to its partnership team sheet: Zero-Knowledge Proof (ZKP). The previously unknown crypto company will be the club’s “official blockchain technology” partner for the next three years.

“This new sponsorship deal, in a cutting-edge area of technology, is yet another example of FC Barcelona’s leadership in the commercial field,” the club said when announcing its ZKP tie-up.

Yet, despite access to Barça’s digital channels and hundreds of millions of fans — there is little publicly available information about ZKP. The company registered in Samoa, appears to have no listed address or public team, no clear disclosures about founding or financing, and minimal digital footprint. ZKP claims it has developed a piece of hardware that lets users verify information without revealing underlying data — a “privacy-first” blockchain/AI protocol. Repeated efforts to contact ZKP have so far been unsuccessful.

“Everyone asks, “Who’s behind this?” the company says on its website. “As if knowing the names would make the code stronger. It won’t. We’re real — engineers, cryptographers, ex-founders, system killers. But we’re not playing the PR game.”

But that secrecy means fans have no idea who they might be dealing with. Criticism of the deal prompted Barcelona to publish a statement on Thursday evening, saying it had “no connection whatsoever” or responsibility for ZKP’s debut coin auction or its associated technology.  Not the greatest endorsement of your latest commercial ally 12 days into a three-year deal.

Football clubs have been dabbling with crypto sponsorships for some time, with pretty mixed results. Clubs including Inter Milan, Chelsea and Atlético Madrid have had to end such deals early, in some cases due to non-payment.

Despite the reputational and financial risks — not to mention the potential brand dilution — such deals keep coming. The money, it appears, is too good to turn down.

It could be argued Barça is a special case. Its vast debt burden makes raising revenue particularly urgent, while its member-owned structure limits some other options — for example, issuing new shares or bringing in major investors. Commercial partnerships remain the most straightforward way to raise cash quickly.

But the need to raise income as quickly as possible is an increasingly common theme across football, and one that could get even more pressing as regulation across Europe ties spending to revenue.

European football doesn't have a great record when it comes to long-term thinking. So long as crypto companies still have money to spend, expect them to find a willing audience in club boardrooms — no matter how opaque they are.

 

Comments

Popular posts from this blog

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...

A poor financial record, but new hope at Everton

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful.  Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy).  However, Everton fans have had plenty to moan about on and off the pitch.   Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...