The monumental task of unlocking Brazilian football’s potential

BACK IN the 1970s, the financial industry identified Latin America as a land of opportunity, but only tentatively dipped their big toes into the water. The region was rich in raw materials and had rising populations that could propel growth in Argentina, Brazil and beyond. Most banks were cautious and entered into partnerships with other institutions to form consortiums. When the oil shock arrived and debt defaults became a reality due to hyperinflation, economic stagnation and crippling foreign debt, these consortium banks floundered and appetite for the region subsided.[1]

In 1988, with restructuring underway, Brazilian debt was used by Dutch electronics firm Philips, owners of PSV Eindhoven at the time, to buy Romario, then 24 years old and not quite the superstar he became. Philips paid US$ 4 million for Brazilian debt with a 25% discount. They then cashed the debt for Brazilian Cruzados and paid Vasco da Gama for young Romario.[2]  This novel method highlighted that footballers had become a form of currency and were, effectively, the new raw materials.


Brazil is the biggest exporter of football talent in the world; in 2022, there were over 1,200 Brazilian footballing expatriates, with around 20% of them playing in Portugal, the most common migratory route for young talent. [3] The latest World Cup squad included only three of 26 players who were attached to Brazilian clubs. When Brazil won the World Cup in 1970, all 22 squad members were employed domestically. Of the 2022 players, 12 were playing for English clubs, five for Spanish sides and three plying their trade in Italy.

Brazil’s big 12 clubs [4], over the past decade, received more than € 2 billion in transfer fees, with Flamengo (€ 267m), São Paulo (€ 257m) and Palmeiras (€ 206m) the biggest earners. Selling to Europe is an important part of their business model and European clubs also cast their net wide in Brazil. Players like Vinicius Junior, Neymar, Richarlison and Gabriel Jesus were all signed from Brazilian clubs for sizeable fees.

The population of Brazil, now well over 210 million, is football mad, it has a number of iconic clubs but they lag behind Europe and are also in danger of trailing Major League Soccer. South America has always been looked upon as the world’s second football market, but its position could come under threat from better organised and financially smarter leagues. In order for Brazilian football to change, the clubs have to attract greater investment and more lucrative sponsorship and they have to increase the value of their playing resources.

The underlying feeling is that Brazil could/should be competing with Europe, that the raw materials should be benefitting domestic football far more and for longer. This could transform Brazil from Europe’s nursery to Europe’s peer, but before that can happen, the entire economic environment of the Brazilian game has to alter. Generally, in the digital age, South America should be gaining more of the global football market.


Brazil doesn’t just have major football clubs, it also has its share of major corporations – Vale, Electrobras and Petrobras, to name but three – and the country has the 12th biggest economy in the world. [5] Vale, for example, is the biggest producer of iron ore in the world, which is Brazil’s top export. If the business world can leverage globalisation, then surely, football (one of Brazil’s most visible exports) can do likewise.

The rebooting of Brazilian football hinges on the success of a new law that enables clubs to create corporate structures – SAs (Sociedad Anônimas de Futebol). It’s not the first time such moves have been made, there were two attempts to make clubs more corporate in the form of the Zico Law (1993) and Pelé Law (1998). [6] Neither worked too well.

This latest 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 money problems, was bought by the original 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. 


There is significant upside for Brazil’s leading clubs. Even considering the volatile nature of the country’s economy over the years, they are punching below their weight. In terms of status in football’s advertising markets, Brazil’s football ranks among the top five, but the commercial revenues of Brazilian clubs come in at 14th. Only Ligue 1, the Bundesliga, Premier League and MLS are more important, but commercial revenues among Brazilian clubs amount to only US$ 170 million, dominated by Palmeiras (US$ 31m), Flamengo (US$ 29m) and Corinthians (US$ 23m). Clubs in Austria, Turkey, Mexico and Portugal certainly earn more from commercial activity.

Part of the problem is that Brazilian football brands are weak globally, even though around five million Brazilians live outside of Brazil. The definitive Brazilian football brand is the national team, recognised across the globe with an image – samba football – that is actually misaligned with reality. But Brazil still remains a major attraction at every tournament, 40 years since they last had a team that lived up to spirit of jogo bonita. Recently, there has been an attempt to promote Brazil through the rivalry between its two dominant forces, Flamengo and Palmeiras. According to Sports Value, there are just three clubs with an economic valuation exceeding US$ 400 million – the aforementioned and Corinthians. From a brand perspective, Sports Value considers Flamengo’s brand is worth US$ 154 million, some US$ 30 million more than Palmeiras. The consultancy revealed that mismanagement, budget imbalances, debt accumulation and a lack of transparency all conspire to impact Brazilian club brands in a negative way. [7]

A new way

The new SA law [8] will open doors for Brazil and right now, there is a move to break-up the existing structure and provoke a “Premier League moment” that transforms domestic football and moves clubs like Flamengo, Palmeiras, Fluminense and Corinthians into the global spotlight. This is motivated by a desire to leverage TV rights and commercial opportunities as well as improving the perception of Brazilian football. The national football federation has a poor image due to past corruption and inefficiencies. More revenues would mean better wages for young players which would have the effect of keeping talent longer at home before players move to Europe, which in turn would drive the price up and reap more rewards for Brazil’s clubs.

There are currently two consortiums trying to drive change: Codajas Sports Kapital, whose Liga do Futebol Brasileiro (Libra) has support from 16 clubs; and Liga Forte Futebol, which has backing from 26. Codajas has progressed its involvement by talking to Mubadala Capital, an arm of the Abu Dhabi sovereign wealth fund to sell 20% of its stake in the project for US$ 890 million. Apparently, Mubadala were chosen over a number of US private equity firms.  

Codajas has very clear ambitions for the new Brazilian league – Lawrence Magrath told the media that in 10 years, he envisages Brazil being comparable to France’s Ligue 1 by revenues and in 20 years, Brazil to be the second biggest league in the world after the Premier League. At the moment, there’s a lack of consensus over TV rights, among other things, but talks with Globo, the main broadcaster, are expected to take place soon.

Brazil has two of the world’s megacities: São Paulo and Rio de Janeiro, with populations of 12.4 million and 6.8 million respectively. Brazil was badly hit by the pandemic and in its aftermath, poverty across the nation was expected to hit nearly 30% in 2022. São Paulo has a rate of between 13% and 19%, depending on where you source your figures, but it is clear that the number of people below the poverty line is growing. This in itself will pose a challenge for Brazilian football. [9]

Nothing moves too quickly, so the discussions around a football revolution in Brazil will undoubtedly drag on. It’s just one aspect of the South American game that could dramatically change if the will and money is made available. CONMEBOL must surely be hoping that the Copa Libertadores will become the Champions League of the Western Hemisphere, especially after moving to a neutral venue, one-legged final.

Brazil has had to deal with a general election and political unrest, a disappointing 2022 World Cup and the sad death of football legend Pelé. The nation is still mourning the loss of their sporting icon, but they could do worse than name a new league after the man who still represents everything that is good about the beautiful game in Brazil.

[1] The Silent Revolution: The IMF 1979-1989.

[2] The New York Times, Soccer Star Traded for Debt, October 1988.

[3] Source: CIES Football Observatory May 2022.

[4] Brazil’s G-12 Wikipedia

[5] Visual Capitalist October 2021

[6] Football Corporations in Brazil: New perspectives for investing in Brazilian football teams, November 2022. Gustavo Coehlo and Matheus Lamarca.

[7] Sports Value. Brazilian Clubs’ Economic Valuation 2021, December 2022.

[8] Ankura: Brazilian football – big opportunity, big risk

[9] World Bank in Brazil, October 2022.

A Premier League model beckons for Brazilian football

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.