In November, Manchester City FC signed up to an odd marketing partnership: with 3Key, a crypto company. There were, understandably, questions. First, of course: "why?" Second, shortly after: "who?"
City's rationale was gazetted in dead-eyed prose: Stephan Cieplik, one of the club's sales executives, said they were "excited to partner with 3Key in their journey to simplify the decentralised finance (DeFi) trading analysis user experience through the power of football". Hardly vintage Roy of the Rovers stuff.
But details proved impossible to find: 3Key declined to answer questions about its location, staff or corporate registration.
A week later, an update: "Manchester City is now conducting further inquiries regarding 3Key Technologies and the partnership has been suspended pending satisfactory resolution to all of those inquiries."
A rather weird episode – but then weird crypto has become a feature of football. This weekend, doing important research in front of the TV, I was urged to buy "fan tokens", join a crypto banking service and an exchange where I was offered crypto derivatives and given the chance to borrow to invest in crypto.
You do not need to be a crypto sceptic to be worried about where unsophisticated investors are being sent.
A partnership with Southampton FC has led to the club promoting learncrypto.com – a crypto site aimed at neophytes. Learncrypto's frequently asked questions argue that bitcoin cannot be in a bubble because the current price is higher than a previous high. It cannot be a bubble, it argues, because "you cannot reflate a burst balloon".
Clubs need to take more responsibility for these partnerships. As Martin Calladine, author of The Ugly Game, puts it, fans "outsource some of their judgment to their team's commercial department. And that's dangerous when clubs are endorsing unregulated products with no consumer protection".
It might sound a bit daft on the part of fans, but it is often much quicker and easier to fix regulation than to change human behaviour.
Clubs have a different social role from other companies and, just last month, there was a concrete indicator that the British government tends to agree. When Chelsea's owner Roman Abramovich was hit with sanctions, the club was allowed to continue operating partly because it is a cultural and social asset.
A recent review of football led by Tracey Crouch, the former sports minister, has proposed a new regulator, precisely because clubs have broader social importance. Officials in the culture ministry have also spotted the troubling relationship between crypto and sport. Clubs, unsurprisingly, are worried about the prospect of a powerful, invasive overseer.
If I were trying to fend off oversight, I would start by showing that I am aware of the need to exercise my influence responsibly. Step one: stop encouraging my fans into a financially dangerous sector.
There is, of course, also a lot of gambling money in football – and that is troubling too. Gambling, however, is much more regulated, and its role in football is being scrutinised from several directions – and the rules tightened.
It is also made clear to punters that gambling is – what’s the word? – gambling.
That is not always clear with crypto. On Monday, Andrew Rhodes, the chief executive of the Gambling Commission, expressed concern that crypto comes with "talk of 'investment' and 'trading', yet with none of the safeguards or standards those terms should bring with them".
He said the pattern of losses is often different from other types of gambling. People build up their investment in their chosen crypto asset over time, hoping for growth. A collapse in value can wipe them out: “When the harm occurs, it can be instant and catastrophic, with little or no recourse.”
Stepping away from the easy crypto marketing cash will, of course, be a hard sell for a lot of football executives. But if nothing changes, a financial disaster for fans and a PR disaster for clubs are likely to ensue.
Clubs will be blamed. And they might end up with an even tougher regulator breathing down their necks. – Copyright The Financial Times Limited 2022