The words blockchain and cryptocurrency might not immediately seem to align themselves with football, but that is what is happening with Liverpool's latest commercial partnership.
On Tuesday morning, the Reds announced that they had joined forces with Sorare, a digital blockchain trading card app that allows users to purchase collectable digital cards via their fantasy football platform.
Sorare have already signed up over 30 European clubs to the platform - and over 100 around the globe - including the likes of Juventus, Paris Saint Germain and Atletico Madrid, with users able to sell their trading cards as cryptocurrencies, the blockchain platform used as a database to log the transactions.
The brainchild of French developers Nicolas Julia and Adrien Montfort, Sorare launched its beta version back in December 2019 and has grown an average of 52 per cent each month to take it to 55,000 users globally and £5m in card sales across 80 companies.
The gist of what Sorare offers is that players can purchase cards using cryptocurrency and the value of the card increases or decreases in line with the performance of the player on the pitch, with each card unique to the gamer. The Ethereum blockchain is used to establish who owns the digital card at any given time and secures the cards’ digital scarcity.
For Liverpool it sees them venturing into a market that is expected to see huge growth this decade.
Fantasy football is worth around £14bn currently and expected to rise to almost £36bn by 2027, with some of European football's biggest players keen to get in on the act and experience the benefits of such rapid growth into previously untapped audiences.
The challenge for football clubs, businesses that are totally unique owing to the nature of their customer base - the fan - has been just how to try and monetise their brands globally outside of just selling merchandise and as the world gets smaller through the continued advancement of technology.
For clubs like Liverpool, whose fan base extends to all corners of the globe, leveraging fandom and creating additional revenue streams from that new market could be big business, especially moving forward.
The collaboration will enable Liverpool card collectors and fantasy football gamers to freely buy, sell, and play with blockchain cards from the team, such as Mohamed Salah, Diogo Jota, or Takumi Minamino, whose status as a Japanese international will see him sought after owing to Sorare's existing footprint in the Japanese market, the J-League fully licensed.
Sorare founder and CEO Julia said: “Millennials are increasingly tuning out of longer sports broadcast formats that don’t engage them. In an economy where the attention of audiences is the single most important unit of currency, games are becoming a new avenue for football brands to reach this highly specific yet desirable demographic. ”
The deal allows Liverpool to further expand its international brand by reaching several untapped audiences of fans: gamers globally as well as growing their fan base in Asia and America where Sorare is growing strongly. The firm is effectively opening up a new revenue stream for the Reds by creating a new game licensing category: fantasy football licensing.
Julia added: “Given the current climate due to the covid-19 pandemic, this provides a new opportunity for football teams to create interest when live sports games have been significantly impacted. It also offers a way for teams to diversify their revenue streams.”
Trading player cards is a physical sense is not a new phenomenon and is something decades old.
Liverpool owners Fenway Sports Group, through their ownership of the Boston Red Sox MLB franchise and John W. Henry's deep-rooted affection for baseball, will see the value in something like trading cards, historically a hugely popular part of baseball fandom.
Sorare has brought the idea into the modern age and while trading cards have nostalgia at their core, the new platform is more about investment with the Kylian Mbappe 'unique card' selling for just under £49,000 last month.
It is a move into previously uncharted waters for the Reds and demonstrates an approach that is attuned to the changing landscape of football fandom and how a global fan base can interact with a product on offer from the football club.
