In its latest newsletter, the CNMV analyzes the sponsorship from investment companies to soccer clubs. It states that, among the European leagues, only the Spanish one noticeably promotes these services.

In its 2019 fourth quarter newsletter published last January 30th, the Spanish National Commission of the Stock Market (CNMV) ruled against soccer teams advertising “complex financial products”, such as contracts for difference (CFD), binary options (BO), Forex products and cryptocurrencies, among others.

The report dedicates a section entitled “Advertising complex financial products through the sponsorship of soccer teams”, which describes the type of advertising shown on Spanish soccer teams’ T-shirts. The CNMV says that it is mainly online advertising and notes that two Spanish teams specifically promote financial services: Atlético de Madrid (Plus 500) and Betis (Easy Markets).

Regarding other sponsoring financial service companies, the main sponsor of Valencia and Getafe is Libertex while those of Real Madrid and Seville are Exness and Ever FX, respectively. However, the brands of such firms do not appear on the shirts of those soccer clubs.

Even though these brands are not included in the equipment of the clubs, the CNMV notes that their services are prominently mentioned on the soccer teams’ websites or during the players’ participation in advertising and marketing events. Besides, the members of the soccer clubs that they sponsor receive special discounts.

After comparing the advertising done by the teams of the main European soccer leagues, the CNMV found that investment companies acted as sponsors only in the Spanish league.

The sponsorship of soccer clubs that includes advertising in sports equipment is not observed in the rest of the most relevant European leagues. This type of product is not considered appropriate for retail investors in general, due to its complexity and risks. For this reason, the CNMV has established limitations and has prohibited the trading of BO and CFD to investors of this type that do not meet certain requirements and limitations, with rigorous demands for customer information.

As the CNMV has described them, the Contracts for Difference (CFD) are complex financial products that involve an agreement between an investor and a financial intermediary that establishes the settlement in cash of the difference that occurs in the quotation of an underlying asset in a given period.

According to the financial regulator, the restriction on the advertising of financial products through a sport as massive as soccer has become widespread in Europe, which has led to partially justify the application of such measure to those products.

On this side of the Atlantic, the National Basketball Association (NBA) initially opposed the tokenization of part of the contract of the player Spencer Dinwiddie. However, he launched in mid-January a tokenized bond on the Ethereum network, with which he seeks to raise USD 13.5 million directed to private investors. The Brooklyn Nets star, who is a well-known enthusiast of Bitcoin and cryptocurrencies in general, is now offering 90 tokens called SD8, each of which has a price of USD 150,000 each.

By Alexander Salazar


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