Token gesture: NFTs, cryptocurrency and emperor’s new clothes not a good fit for EFL clubs

WAGMI United can dress this up how they want but essentially what they’re offering shareholder fans amounts to buying a star in the sky, writes Laura Lawrence.

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Non-fungible tokens (NFTs) are the emperor’s new clothes of the digital landscape and they’re heading into the football industry as a prospective, revolutionary business model.

An American investor group, WAGMI United, claimed they are in the “advanced stages” of purchasing a League One or League Two club, according to The Washington Post. The group intends to buy the club with cryptocurrency as its major funding stream. The speculation was that Bradford City and Sutton United were likely candidates.

According to the investor group the “EFL has proven to be surprisingly progressive in our conversations with them… and they’re excited by the outsized interest we hope to bring.”

So, what are NFTs? NFTs are files. They can be graphics, animations, audio clips etc. They are mainly the new wave of artwork. If you bought an original Monet, you are buying it because it is a one-off piece of art and it has the provenance that can be traced back to the artist. As one crypto website describes the NFT transaction as the owner buying the “original traceability, which leads to social prestige”.

A photo collage, Beeple, Everydays – The First 5000 days, sold at auction recently for $69 million. Unlike the Monet where you can hang your investment, the auction winner has a file and not even copyright protection. So, what does this have to do with the EFL?

WAGMI United want to use NFTs as a revenue stream. They want to raise money through NFTs to invest in analytics and to “outspend opponents to quickly climb the EFL ladder”. As the group confess, they know little about ‘soccer’ but maybe someone should make them aware of the Profit and Sustainability rules before they start selling NFTs to fund the purchase of Paul Pogba, who is an advocate of NFTs.

The group want fans of the unnamed club to buy into NFTs to become shareholders. They would only be shareholders in the sense that no dividend would be paid to them and they have no ownership rights whatsoever. I believe this is what’s known in the real world as a donation that you get a sticker for.

There was a fad in the 1990s where you could buy a star for a loved one and name it after them. You neither owned or had the right to own a piece of the solar system but you got a nice certificate to hang on your wall. This is essentially what is on offer to those shareholder fans.

Now I don’t want to come across as middle-aged naysayer. I’m sure that having 21 million Tik Tok followers is a major selling point of their business plan but I’m at a loss as to how this is a revolutionary, sustainable business model in comparison to what we already have. It’s just asking fans to invest.

The group are inspired by Brentford and their use of analytics for buying and selling players.

“We are going to try a bunch of unconventional stuff, but will be pretty much led by the numbers from an analytical perspective. And our hope is that it works. There’s not that much downside if it doesn’t.”

Well, no downside to the group. I’m sure the state of the football club left behind and the shareholder fans with their one-of-a-kind club-related NFTs may have a different opinion.

Within 24 hours of the well-spun article’s release, Bradford released a statement to say, “despite various reports claiming a change of ownership is imminent, I can confirm it is not. Yesterday I received an email from a representative of the WAGMI United group with an offer to purchase Bradford City AFC. That is all I have received, nothing more, and no further action has taken place.”

The emperor’s new clothes indeed.

Follow Laura on Twitter @YICETOR

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