In the image and likeness of Europe, Brazilian football is opening up to foreign investment, which could forcefully resurrect several ailing teams and reinforce the South American giant’s dominance on the region’s pitches.
Source: AFP
So far, two US investors have negotiated the purchase of the Botafogo and the Vasco de Gama, both from Rio de Janeiro, while others prepare their landing. In addition, former Brazilian star Ronaldo, who shone on the Old Continent, acquired the club where he made his debut, Cruzeiro de Belo Horizonte, from the second division.
“With these investments, the trend is for the management of local soccer to improve and that usually brings more money and, consequently, a greater competitive capacity,” Cesar Grafietti, a partner at the consulting firm Convocados and an advisor to this type of operation, tells AFP.
The fortunes appeared after the Brazilian Congress approved in August 2021 the Law of Football Corporations (SAF), which provides tax advantages and stimulates the transformation of clubs into companies, after operating for a century as non-profit associations. .
“Brazilian soccer has always been very closed to foreign investment due to the national control model of the clubs,” explains Grafietti.
– “Win to be profitable” –
The business is attractive to foreigners because of the depreciation of the real against the dollar and the euro, and because of the “raw material” of Brazil, the main exporter of soccer players, experts agree.
A market “with great potential” was opened, says Grafietti.
Vasco and Cruzeiro, both in the second division, and Botafogo, who returned to A this year, sought transformation as a lifesaver in the face of economic crises, a widespread evil in Brazilian squads.
Between the three they owed about USD 442 million in 2020, according to the consultancy Sports Value. The law establishes that the debts be paid with income and profits of the SAF.
The American John Textor, co-owner of the English Crystal Palace and known as the guru of virtual reality in Hollywood, closed in March the purchase of 90% of the shares of Botafogo in exchange for some USD 77 million of investments in the next three years.
“Football is no different from any other business. You have to win to be profitable,” he told CNN in March, before signing Portuguese coach Luís Castro and a dozen players.
– Landings in sight –
“In the future, some clubs that are interested in becoming SAF are going to be more demanding when accepting proposals,” warns Rafael Zanette, a specialist in sports marketing.
Bahia, in B, is negotiating with a foreign investor: the City Group, owner of Manchester City and nine other elevens, according to local media.
The Brasileirão-2021 champion, Atlético Mineiro, does not rule out becoming SAF. But other greats like Flamengo, Corinthians or Palmeiras are not letting themselves be seduced, for now.
Zanette assures that if the new actors meet expectations, the Brazilian casts, winners of four of the last five Copa Libertadores, will widen the gap with their South American peers.
“Latin America must look at the Brazilian market as a reference. That is the way to grow, even to get a little closer to Europe”.
