OP:ED Football clubs are piling in to the NFT bubble with their eyes tight shut

25 Nov 2021

By: Sport Industry Group

InsightX is a specialist intelligence and due diligence agency providing detailed analysis and advice to some of the biggest rights holders and sponsors in sport. Justin Williams is InsightX’s COO and a journalist with more than 30 years of experience at the highest level


Days before Barcelona was due to launch an auction of its first NFT collection through the Ownix platform, the La Liga club cancelled its marketing deal with the token marketplace. It followed the arrest of Moshe Hogeg, an Israeli cryptocurrency speculator, advisor to Ownix and the owner of Beitar Jerusalem FC on suspicion of digital currency fraud, money laundering, and sexual assault. Hogeg was reportedly arrested along with seven other people including his former and current partners as well as employees. He denies the allegations.

Barcelona’s deal with Ownix, which runs on the Ethereum blockchain, was announced two weeks ago, apparently after the sexual assault claims against Hogeg were first aired by Israeli media.

Then on Friday it emerged that Manchester City had suspended its partnership with the little-known crypto company, 3Key Technologies, while it tries to ascertain more information about the entity and its executive team.

The suspension or cancellation of these deals raise serious questions about how much due diligence some of the world’s biggest rights holders are undertaking prior to signing agreements with firms operating in what is widely regarded as the Wild West of the financial world.

Happily, some clubs are doing their homework. At InsightX, more than 80 per cent of the intelligence we have provided to football clients over the past six months has focused on cryptocurrency platforms pushing NFT deals. From company to company, the same concerns keep cropping up:

• How many of these NFT platforms are apparently run by companies which are little more than shell corporations with ultimate ownership often obscured behind the veil allowed by offshore tax havens

• The lack of successful business track records with many founders abandoning one failed operation after another

• Why so many previous business ventures have fallen foul of regulators and either lapsed into delinquency or have been struck off

• Recurring allegations of fraud, money laundering and, in one case, links with terrorist financing

And these company-specific concerns sit alongside the wider question over the wisdom of the NFT frenzy currently gripping football which so few seem to be asking: are we witnessing a bubble?

In my time as a journalist and in intelligence-led due diligence, I have watched plenty of bubbles: Japanese real estate, the Dotcom explosion of the late 90s and early 2000s, and the subprime fiasco which precipitated the financial crisis.

NFTs have the same smell about them: easy money requiring little or no work heavily marketed to young people who would otherwise struggle to build equity. And while there have been some high-profile NFT sales involving recognised artists, you only have to look at the overwhelming amount of gaudy and meritless tat masquerading as art being traded on digital marketplaces to know that there is trouble brewing.

Some of that tat is being sold to fans by big names in football. If and when the NFT bubble bursts, a lot of those fans are going to be left holding assets which may be unique, but which will be worth a fraction of the value they either paid for them or assumed they would be worth.

Many of the big clubs are still smarting from the reputational damage caused by the European Super League disaster. The NFT craze suggests that there may be another public relations issue involving the fans on its final descent.