This article is taken from the June 2022 issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering five issues for just £10.

Imagine running an organisation where, no matter how bad your product, no matter how many times you let your customers down, those customers keep coming back for more. 

I am not talking about the misery of flying with Ryanair, or chasing lost post from Royal Mail, or the many disasters delivered by the Great British public sector. I am talking about something much more important: football clubs. 

For football clubs are very odd businesses indeed. They do not operate a monopoly, but we would never switch our allegiance. Neither do they lack local competition, but we would no more support a local rival than Prince Harry would decline an invitation to talk about himself. Whatever the rubbish we are served up — and for most fans of most clubs bitter disappointment is more common than joy — we stay true to the very bloody end.

And of course the people who run football clubs know this. They know they can get away with charging sky-high ticket prices and putting the logos of gambling companies on replica shirts sold to children. They know they can sell their clubs to blood-stained dictatorships and corrupt and criminal billionaires, because the fans will not only keep turning up, if it means there is a bigger transfer budget and a greater chance of success they will positively revel in the grisliness. Remember the Newcastle supporters gleefully wearing Arab dress to celebrate their club being sold to the Saudi sovereign wealth fund (above).

Now clubs have their hand in something just as dubious. A number of them, such as Manchester City, have started selling “fan tokens” — a sort of club-labelled crypto product, which can be bought and sold at prices that rise and fall according to demand.

The tokens, fans are assured, are scarce, limited-edition collectibles that will retain their value

The problem is that while clubs and players have endorsed these tokens, encouraging fans to buy them up, the value of the tokens has often fallen shortly afterwards. The “Ape Kids Football Club”, sponsored by former Chelsea and England star John Terry, and backed by the likes of Tammy Abraham, Ezri Konsa and Ashley Cole, traded at an average price of $656 in early February. By early March its value had fallen to $65. Abraham, Konsa and Cole quietly deleted their online endorsements, but a lot of fans had lost a lot of money. And somebody, somewhere, had made a killing.

This is the issue with these tokens. Their defenders — and remember there are many people in and around football who have good financial reasons to defend them — insist they are worthy products, no different to fans buying club scarves or posters of their favourite players. The tokens, fans are assured, are scarce, limited-edition collectibles that will retain their value. Sometimes they come with promises of special perks, like the chance to vote for songs to be played in the stadium before matches.

But the reality is more complex, because in reality non-fungible tokens and crypto products have no inherent value. While traditional currencies command confidence, because they are backed by the state which has a monopoly of control over the supply of money, the same cannot be said for cryptocurrencies. In the end, cryptocurrencies are nothing more than a digital asset that owners hope others will want to buy or exchange for at least the same value. 

And the same is true for the tokens sold by clubs and companies promoted by players. There is value in gold, for example, and fine art, because people have always appreciated their inherent quality, and we have good reason to assume they will continue to do so. But what value is there in digital drawings of ugly cartoon monkeys, as John Terry’s scheme offered, even if they are wearing our favourite team’s colours and holding up a trophy? 

The answer, sceptical readers will be unsurprised to hear, is not very much. To be fair, this is not unique to the football token market: the sale of tokens worldwide fell from a daily average of 225,000 in September to 19,000 at the start of May. A token recreating the first tweet ever sent, by Twitter founder Jack Dorsey, sold in March 2021 for $2.9 million to Sina Estavi, a blockchain business chief executive. When Mr Estavi tried to auction the token earlier this year, he received no bids above $14,000, and opted not to sell.

A fool and his money are easily parted, of course, but Mr Estavi can afford to be glib about his loss. The many football fans being encouraged to buy tokens by their clubs and heroes have more to lose. Sportemon Go, another football-backed token, ceased trading after its value collapsed at the start of May. But last October, when Sportemon Go was backed by Glasgow Rangers, Luke Shaw and Callum Hudson-Odoi, its value had surged, with nearly $600,000 of tokens being traded on a single day.

Those tokens are now worthless, and the people who lost out have no redress, because crypto products are almost entirely unregulated. Yet the football moneymen are undeterred. The Premier League plans a new token project, in which each of its clubs will launch branded tokens estimated to be worth hundreds of millions of pounds. 

To start with, at least. For what is the value in these products? Where is the protection for fans? And is the profit worth exposing good people of modest means to such dangerous financial speculation? Football, search your conscience.