The sports industry has been hit hard by the coronavirus pandemic. Most of the leagues were suspended, then the teams played without spectators for a long time. Sports clubs are starting to look for new sources of income, and the cryptocurrency industry has arrived to help with exciting deals.
Over the past year, there have been a lot of headlines about partnerships between major sports clubs. Even national teams and major club associations have joined this trend. So it was all the more surprising when FC Barcelona and Manchester City, the two largest football clubs in Europe, completed their cryptocurrency sponsorship deals that same week.
FC Barcelona canceled its partnership with the Ownix non-fungible token (NFT) market following the arrest of Moshe Hogg, the founder of the Israeli cryptocurrency, who was among the company’s advisors. Ownix was quick to deny any organic link to Hogg during the Twitter flood. Cointelegraph contacted Ownix but declined to comment further.
Manchester City have also suspended the deal with 3Key, which the club announced as a regional partner in Decentralized Financial Analysis and Advisory Technology just a week ago.
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The sports industry is looking to join the hype surrounding NFT, which Morgan Stanley predicts will become a twelve-figure market by 2030. Timothy Mangnal, who helps sports clubs better understand cryptocurrency and the world of NFT through his agency NFT Capital Block, told Cointelegraph that it is easy for Clubs to forget about doing basic due diligence on companies and expertise before entering into long-term business deals.
Barcelona was contacted by representatives of a number of NFT Markets several months before the announcement of the agreement with Ownix. Mangnal explained that many competitors already have a solid track record in the NFT region, but Barcelona has chosen a somewhat unknown brand in this area:
“It shows me that Barcelona is only looking at the money on the table and not doing what they would do with all other sponsorship deals, which is due diligence.”
He added that the cryptocurrency market is filled with small NFT companies willing to distribute ten times as much money as the major exchanges, only to do big deals with sports clubs, warning that this should be a red flag for any club, which should then grow. delve deeper into the internal review process and immerse yourself in the company and the owners.
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Tokenization is a blockchain technology product that attracts huge companies with huge business values and fanbases, ”adds Ahmed Usta, co-author of Blockchain 101 and co-founder of Avaxtars and Crypto Mandala NFT projects:“ Clubs naturally strive for high returns.
“NTFs are not going anywhere and will become part of our future,” summed up Timothy Mangnall, adding that “clubs should not be afraid to miss the hype at the moment, but should take a step back to understand the sector and plan further actions. at least in the next three years. “