FOR ALL the talk of samba football and Copacabana beach dudes juggling balls on the sand, Brazilian football is still largely anonymous to the rest of the world. Every four years, the media focuses on the Brazilian national team and expectation invariably exceeds reality – it is now 20 years since they won the World Cup, eight since they were humbled on their own turf by a rampant Germany. That’s international football, but what about Brazil’s domestic game, which despite exporting hundreds of players, is still something of a mystery?
That may be about to change after the passing of a law that will enable Brazilian clubs to behave like corporate bodies rather than non profit-making organisations. This means the free market will start to dominate and will influence club behaviour, as well as create both winners and losers. It will surely be good news for the giants of the Brazilian game but could, if greed gains the upper hand, create bigger imbalances than there are today. In 2020, the revenues of the top five clubs accounted for 56% of overall income, with Flamengo generated 14% on their own. At present, the distribution of TV revenues is certainly sub-optimal, with around a quarter of the total going to two clubs, Flamengo and Palmeiras, between 2017 and 2021.
But the rebooting of Brazilian football could also lead to greater professionalism and the creation of global franchises in a country whose chief football brand is unequivocally the national side.
It was starting to happen in some ways, mainly through the increased awareness of South America’s Copa Libertadores, which has received greater exposure in Europe in recent years, but not always for the right reasons.
But this new law will open the door for greater investment from abroad, in fact it is already underway with two iconic but financially challenged Brazilian clubs, Botafogo and Vasca da Gama, benefitting from US investors. Meanwhile, another club, Cruzeiro, also with fiscal issues, was bought by World Cup legend Ronaldo. These three clubs had combined debts of around US$ 450 million and, according to EY, the total debt among top flight teams was US$ 1.9 billion (R$ 10.3 billion) in 2020. As well as these takeovers, two clubs were already owned by companies, Red Bull Bragantino, now part of the Red Bull multi-club model, and Cuiba, who are backed by a tyre company.
In tandem with the new law, Brazilian clubs are threatening to break away and form their own competition. Naturally, money is at the root of this initiative, although critics have called for the Liga do Futebol Brasileiro (Libra) to be more than a way of distributing TV cash.
Brazilian domestic football has suffered from a poor overseas image and selling games to broadcasters has always been difficult, even though some clubs have huge fanbases. The game has been damaged by poor, short-termist owners, bad playing surfaces, corruption, crowd violence and an overcrowded playing calendar. Brazil stubbornly holds on to its state championships, which allow small clubs to become cannon fodder for the big names. But the biggest South American market is still obsessed with the sport with 80%-plus following the Serie A championship and three quarters of the nation interested in football (source: Brand Finance).
Currently, six club presidents have committed to the new project, from Flamengo, Palmeiras, Corinthians, Sao Paulo, Santos and Red Bull Bragantino. Some believe a breakaway league will release Brazilian football from the chains that have prevented real progress, calling it a moment of liberation.
TV money will be more democratically distributed, claim the advocates, although there are currently two versions on the table. The first is 40% equally shared, 30% based on performance and 30% engagement, while the second is 50% – 25% – 25%. Essentially, though, Brazilian football’s rebirth does depend on making the pot bigger and successfully marketing Brazil to the rest of the world.
How realistic is the dream of raising Brazil’s competitiveness? The country has always been seen as one of potential, but for various reasons, it has rarely been realised on a consistent basis. From a football perspective, Brazilian clubs remain the dominant force in South America, winning six of the last 10 Copa Libertadores. Six of this year’s last 16 are from Brazil, including heavyweights Palmeiras, Flamengo and Corinthians.
An interesting development is the rise of Flamengo, one of the most popular clubs in Brazil and one that has tried to build a global reputation. Brand Finance’s Football 50 has been dominated by Europe since its inception, but for the first time, a Brazilian club has made its way into the list, albeit at number 49. According to Brand Finance, Flamengo’s brand is far more advanced than Palmeiras, its nearest competitor among Brazilian clubs.
Can Brazilian clubs ever generate enough money to retain some of the talent that gets sold abroad before it reaches its peak? As one journalist commented, if Brazil was to stop players going to Europe, it would create the best league in the world. That’s a bold claim, but Brazil exports more footballers abroad than any other country, but often fails to leverage the full value. It’s worth noting that Brazilian club revenues in 2020 totalled R$ 5.3 billion (£ 890 million/ US$ 1.1 billion/€ 1 billion).
Until revenues allow the Brazilian game to truly compete with other leagues, it would seem unlikely the trade route will change, although the trend is negative in terms of numbers. Between 2017 and 2022, 1,219 players left Brazil with the chief route being to Portugal (source: CIES Football Observatory). Also, any designs on creating a Club World Cup will be a little hollow while Europe is so dominant.
As the so-called “Football Inc.” initiative becomes more defined, it is not difficult to envisage a wave of investment in Brazilian football in the coming 12 months as there could be considerable upside for clubs with massive fanbases. It could also unleash some of the latest developments in the football industry, such as crypto currencies, data-driven and more strategic transfers and the arrival of more investors with multi-club portfolios. Another factor could be an influx of foreign talent into a league that has a low percentage (< 10%) of expatriates. This could not only be Brazil’s Premier League moment, but handled properly and with patience, it could also change the shape of global club football.
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