By ROBIN POWELL
It wasn’t so long ago that my favourite football team used to carry the name of a children’s hospice on its shirts.
Depressingly, in recent years, we’ve seen a succession of betting brands instead. This season there’s a second-hand car seller on the front, which ironically is a vast improvement, and an Asian online gambling firm called LT on the sleeve.
This year’s official “multi-asset trading partner” — of course, why not? — is the fintech firm Skilling. Based in Scandinavia, Skilling apparently "provides access to currency and multi-asset trading across more than 800 financial instruments."
“With Skilling,” the club website explains, “you can trade on the world’s most volatile markets: forex and CFDs on indices, stocks, cryptos, and commodities like gold, silver and oil.”
80% of EPL clubs have a trading or P2P partner
Sadly, my own club’s dalliance with firms offering these sorts of services is not unusual. Research from low-cost online financial advice service OpenMoney shows that 16 of 20 English Premier League clubs sponsors have at least one sponsor involved in online trading, currency speculation or peer-to-peer lending.
eToro, which describes itself as "the world's biggest social trading platform", sponsors no fewer than six EPL clubs. It's currently running a high-profile advertising campaign featuring the football pundit and former England midfielder Joe Cole:
Although the sale to retail customers of derivatives and exchange traded notes (ETNs) that reference certain types of crypto-assets was banned in the UK last week, ordinary consumers can still access crypto-assets and other types of sophisticated investments sold by these companies.
“By ‘investing’ in cryptocurrency you have the potential to lose all your money;" says OpenMoney co-founder Anthony Morrow.
"It is no different to gambling with your cash and these are complex, sophisticated investments have no place in people’s financial plans. The fact that crypto-assets other high-risk investments can continue to be promoted to football fans through club sponsorship and social media as well as advertisements during matches without any restrictions is completely wrong.
"Many people are unaware of the risky nature of these unregulated investments and while warning consumers of the dangers of these products is all well and good, the FCA needs to go further and tighten regulations to stop them causing serious financial harm.”
Just a bit of fun?
Look, I don't want to dissuade anyone from dabbling in day trading or cryptocurrency if they really want to. Clearly some people have done very well out of it. Indeed, even my fellow TEBI contributor Nick Maggiulli recently admitted that he had softened his line on Bitcoin. But we aren't just talking about a bit of fun here. As Anthony Morrow says, crypto is extremely risky. It can fall in value very quickly. At the time of writing, Bitcoin has fallen 16% from its all-time peak on Friday. Football clubs need to be much more responsible about the way they support these companies in promoting their services. They can stop referring to it as investing, for a start. As for fans, they should exercise caution, and thoroughly research these subjects before parting with any money. A good place to start is to read this warning issued by the Financial Conduct Authority earlier today.
Club legends don't make "top investors"
Of course, football clubs need to make money, especially at a time when they can't rely on match-day revenues. For all I know, Burnley legend Glen Little may well be a "top investor", but frankly I doubt it...
Good luck to the Southampton players tackling peer to peer lending...
But remember, when you're earning £50,000 a week for playing football, you can afford to lose the occasional five- or even six-figure bet. Alas, most of us fans don't have that luxury.
© The Evidence-Based Investor MMXXIV. All rights reserved. Unauthorised use and/ or duplication of this material without express and written permission is strictly prohibited.