Penn State football is getting into the cryptocurrency business.
The Nittany Lions are part of a new college rollout that will sell fan tokens, a digital asset tied to team fandom and built to offer supporters “exclusive experiences” and “unique benefits,” according to a news release announcing the program. Penn State is one of five schools in the first wave, joining Michigan State, Maryland, Texas A&M and LSU.
Socios, which operates in the fan-token space, will host the initiative. The company said those five programs will start the “scale-out” process as it looks to expand the model to 30 colleges over the next year. The rollout marks the U.S. debut for college fan-token sales.
Playfly, the sports marketing company that owns Penn State’s multimedia rights, worked with Socios to bring the deal to the five schools. Socios already has partnerships with professional soccer clubs in Europe and South America, along with deals in auto racing, rugby and gaming.
“The United States is the most important sports market in the world, and college sports represents one of the most passionate and culturally significant fandoms anywhere,” Alexandre Dreyfus, CEO and founder of the Chiliz blockchain and Socios.com, said in a statement. “These are the first Fan Tokens in U.S. college sports and represent not only a new frontier but also a new iteration of the established asset class.
"LSU, Maryland, Michigan State, Penn State and Texas A&M represent some of the most passionate fan communities in global sports, and Fan Tokens® will provide fans, alumni and supporters everywhere with a new way to connect, engage and be rewarded for their fandom."
Fan tokens are digital collectibles that only have value with the team selling them, and they function as a marketing tool meant to deepen fan engagement through digital channels.
"Fan Tokens® are utility tokens designed to provide fans with the ability to directly support their schools’ athletic programs while opening the door to new engagement experiences, rewards and access," according to the PlayFly news release. "Through Fan Tokens®, supporters can vote on fan focused decisions, participate in exclusive experiences, unlock unique benefits and connect with their favorite teams in new ways."
In practical terms, fans would be buying sport- or team-specific tokens to unlock perks tied to those schools. CoinMarketCap, a crypto website, describes fan tokens as fungible assets that can be exchanged for merchandise, VIP experiences and other rewards. The site also says they are not necessarily backed by the same underlying value principles as Bitcoin or Ethereum, and that their value comes from how much fans want the access and benefits they provide.
Examples from other teams show how those perks can work. FC Barcelona gave token buyers a chance to design a captain’s armband, while Paris Saint-Germain let fans pick motivational messages for the locker room.
Penn State has not yet said how its tokens will work for Nittany Lions football or any of its other athletic programs.
The move comes as Penn State keeps searching for new revenue streams to support its $250 million athletics department, athlete payments and the Beaver Stadium renovation. Athletic Director Pat Kraft said Penn State has guaranteed more than $1 billion in new revenue through deals with PlayFly, adidas and others, but the school is still looking for more.
According to the news release, a “meaningful proportion of revenue” from token sales will go to the schools’ NIL programs, with PlayFly administering those funds.
Token sales have reportedly generated “millions for some organizations, helping finance sports operations and even player signings.” The model also gives sports franchises a way to cash in on global fandom beyond ticket sales.
Still, Penn State will have to educate fans on what they’re buying and how the blockchain piece works. That understanding problem may be the biggest hurdle in making the tokens matter to supporters.
"Together, we’ve built one of the strongest financial foundations in college athletics, securing more than $1 billion in guaranteed future revenue while dramatically increasing philanthropic support for our student-athletes and programs," Kraft wrote in his annual letter to Penn State fans. "Those aren’t simply milestones.
They’re investments in championships. They’re investments in people.
And they’re investments in the future of Penn State Athletics."
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