According to a Times report, two premier league football clubs are looking to solve their current financial struggles by organizing a tokenized crowdfunding.
Both Clubs Experiencing Financial Issues
Newcastle United and Cardiff City have been reported to be holding negotiations for the launch of their individual ICOs (Initial Coin Offerings) with SportyCo. SportyCo, which is a decentralized platform for sports investment and funding, had earlier collaborated with Avaí Futebol Clube in the raising of $20 million through offering its (Avai’s) tokens for sale to the public. SportyCo is also the major sponsor of the top football team at the moment, Espanyol.
Through this partnership, the two premier league clubs will be able to start the sale of their tokens in the form of utilities and securities. Through the purchase of the private digitized tokens, participants will be gaining a stake in the revenues of the soccer club or other incentives when they use the digitized tokens to make game-related purchases.
The report highlighted the current financial straits plaguing both premier league clubs. According to the report, Newcastle had been previously mentioned as having made significant financial losses due to the poor managerial decisions made by Mike Ashley, the owner of the club. Cardiff City, on the other hand, is dealing with a debt of more than $150 million, much of the debt being owed to Malaysian investor, Vincent Tan.
Struggling To Stay Afloat
Cardiff has reportedly reduced its wage bill to £20.6m, which is 18 percent lower than its wage bill for the year 2017. Both of the premier league clubs have admitted they are currently struggling to stay afloat by lowering their budget.
One of the most distinguished figures in the premier league, Sir John Madejski, one time commented that being in charge of a football club was not a task for the faint of heart especially since most professional clubs operate with deficits. He added that to effectively head a football club one needed to have very deep pockets.
There are many small issues which limit the ability of football clubs to prudently manage their finances. Among these are the exorbitantly high wages which players are paid and the equally exorbitant and unnecessarily large commissions which their agents are also given. Nevertheless, football maintains its position as an important aspect of a nation’s economic plans.
More Football Clubs Going Public
Football clubs are seen to have grasped the fact that football is no longer viable to be run as a one-man show and are thus looking to engage the public more in some aspects of their day to day operations. One way of doing this is by initiation ICOs which will allow the clubs to raise more capital while making the whole process easier for the organizations. The digital tokens purchased in the ICOs could act as proof of ownership for the holders while also opening up avenues for discounts and offers.
SportCo’s co-founder Marko Filej, has said that most of the funds raised in the ICOs will be channeled towards upgrading the clubs’ infrastructures.