Man City and FC Barcelona Canceled Crypto Deals

The coronavirus pandemic had a major impact on the sports industry. Most of the leagues were suspended and for an extended period of time, the teams had to play without any audience in the ground. Therefore, it wasn’t surprising that sports clubs began to look for other ways to generate some revenue stream, and the crypto industry popped up with some really juicy deals. In the last year, there have been some prominent headlines about partnerships signed by major sports clubs. As a matter of fact, even major club unions, as well as national teams, had joined this trend. 

Subsequently, it came as a big surprise when it was disclosed that two of the biggest football clubs in Europe, Manchester City, and FC Barcelona had decided to terminate their sponsorship deals related to crypto in the same week. The partnership between Ownix, a marketplace for non-fungible tokens (NFTs), and FC Barcelona came to an end after the arrest of an Israeli crypto entrepreneur named Moshe Hogeg, who had been one of the consultants at Ownix. In a flood on Twitter, Ownix didn’t take long to deny any connection to Hogeg, but it did not comment about the cancellation of the partnership. 

As far as Manchester City is concerned, the club decided to end its partnership with 3Key that had been announced just a week earlier. The club had called it a regional partner in advisory technology and decentralized finance trading analysis. It is obvious that the entire sports industry is eager to jump onto the NFT bandwagon. As per Morgan Stanley’s prediction, they expect it to become a twelve-digit market by 2030. The NFT agency Capital Block belongs to Timothy Mangnall, who assists sports club in gaining a better understanding of cryptocurrency as well as the NFT world. 

He stated that it is incredibly easy for these sports club to forget about doing their due diligence on professional backgrounds and companies when they are entering long-term commercial deals. A number of NFT marketplaces had approached Barcelona in the months that eventually led to the announcement of a deal with Ownix. Mangnall elaborated that some of the candidates had excellent track records when it comes to the NFT sector, but Barcelona had chosen to go with a rather unknown brand. He said that this was an indication that the club was solely considering the money instead of what they usually do when they are thinking about a sponsorship agreement i.e. due diligence.

There are a number of small NFT firms in the crypto market that are ready to spend ten times more money, as opposed to bigger exchanges, just because they want to make some major deals with sports clubs. Mangnall warned that any club should consider this a major red flag and should focus on their internal review process, which should include a deep dive into the owners of the company and the firm itself. A product of blockchain technology, tokenization holds major attraction for companies and brands that have huge fan bases and recognition.