January 28, 2023
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Hey everyone, this is Front Office Sports senior writer Owen Poindexter. This week I’m digging into a new soccer-focused startup that’s looking to tap into the same impulses that drive people to watch games, buy merch, and place wagers.
If successful, the platform could help facilitate a new kind of relationship between players, teams, and fans — one where spectators have a chance to make money and change an athlete’s life at the same time.
Let me know what you think at @owenpoindexter [[link removed]] on Twitter.
Tech Will Crowdfunding Transfers Play a Role in Soccer’s Future? [[link removed]]
Green Bay Press-Gazette
Adrian Docea is collecting email addresses for his company’s app launch in an effort to harness the power of one of the biggest energy sources on the planet: soccer fans.
“Football is not just the biggest sport in the world, it’s the biggest anything in the world,” said Docea. “It’s the only thing on this planet that has 4 billion fans.”
His company, Nordensa, is a platform where fans can make long-term bets on players, specifically under-scouted ones.
It bears some resemblance to Mojo, the Alex Rodriguez-backed “athlete stock market,” in which one can buy shares in NFL players that rise or fall based on their on-field performance, but there’s a twist.
Transfers between clubs will be crowdfunded, minimizing risk for teams and earning profits for participating fans if the players pan out.
Untapped Potential
Nordensa’s calling card is that it works directly with the transfer market, which saw $6.5 billion change hands in 2022.
The company wants to exploit an under-tapped niche: promising players who aren’t based in Europe.
Top teams, mainly from Europe, mostly scout on the continent, where it’s easier to find players with the skills and comfort in European culture to make it in the Premier League, Bundesliga, La Liga, Serie A, or Ligue 1.
A look at last year’s global player transfer data, released by FIFA on Thursday [[link removed]], shows a thriving player market. Most of the action happens within continents, but plenty of business is conducted between them.
Of the 20,209 international transfers in men’s professional soccer in leagues covered by FIFA, nearly half (9,369) were within Europe. Another 4,056 were intracontinental transfers in other areas. European teams brought on 2,511 players from other continents, led by South America (901 players for a total of $388.2 million) and Africa (759, $52.9 million).
A scan of 2022 Premier League transfers specifically bears this out: Fewer than 10 transfers to Premier League teams came from outside of Europe last year.
“If you’re a young player in Bolivia, let’s say, or Ghana, chances are the scouts of Liverpool or Arsenal or Bayern Munich will not simply land in your backyard and see how awesome you are,” Docea explained.
Of the over 1,000 professional soccer teams in Europe, only a small percentage have significant scouting operations in other countries, leading to large blind spots in the global search for talent.
Crowdfunding transfers is a way to get fans more invested and provide opportunities to players who might otherwise have to quit soccer for a more reliable paycheck.
“A lot of talented kids drop football before they really have a chance to shine,” said Docea. “I think that’s the worst news for football: Some of the biggest stars in the world, we will never know their names.”
Match-Making
Nordensa identifies talent by using scouting software from a third-party data provider of televised games in its target areas, namely in South America and Africa. Players are judged on around 60 metrics to create a set of potential recruits.
The company works with scouts from the Premier League, Bundesliga, and other top flights to further investigate standout players.
Once a player is selected for development, Nordensa links up the player’s team with a potentially interested club in Europe. If the two clubs agree, crowdfunding enters the equation.
Investments in the player are solicited on the platform and mainly go toward one year of their salary.
For most European clubs, Docea reasons, “it’s pretty cheap to get the player from the next village, but it’s really expensive to pay for a Colombian player for one year, and maybe he will not fit in, and then you will have wasted a lot of money just to test one young player.
“That’s exactly the niche that we’re trying to fill.”
The Potential Payoff
Nordensa wants to tap into the kind of rewards system familiar to fantasy sports and sports betting.
If a player signs an extension with a club or a deal with another European team, the people who helped fund his first year would receive their money back, plus 3% of the player’s future earnings.
Nordensa would take 3%, plus additional fees from the club, but the player is only ever paid by the clubs that employ him.
A savvy pick can earn a serious return: Docea estimates that if a player signs a professional contract after his first year following his Nordensa-funded transfer, his investors will double their money.
One can make four or five times their investment if the player ends up in Serie A or Bundesliga — and 10 times if they go to the Premier League. If they don’t sign a deal, investors see no return.
With both soccer and legal sports betting ascendent in the U.S., tapping into sports fans who don’t mind taking on some risk and enjoy devouring data to inform their wagers looks increasingly promising.
A New Kind of Betting?
The platform hasn’t launched yet, but Nordensa is collecting names of interested users on its waitlist.
They purportedly have “big plans with MLS,” in the coming months, as well.
There was an estimated [[link removed]] $35 billion in bets placed on the 2022 World Cup. The fervor for sports betting is only growing as the U.S. finally gets a taste of the action. But every one of those bets is a contract between a person and a sportsbook, and the broad effect will be to enrich a small group of companies.
Ultimately, Nordensa could function like a sportsbook — plausibly one with more of a pro-social angle. The question is how many of those 4 billion soccer fans they can get behind them.
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