Brazil’s Flamengo dancing to success

THE COPA LIBERTADORES has reached the last four stage and there’s some real continental heavyweights in there: Boca Junior, River Plate, Flamengo and Grêmio. The semi-finals include two domestic clashes which will guarantee an Argentina v Brazil final, the 15thtime the region’s two biggest football nations have met to decide the destination of the trophy.

The all-Brazil semi-final is between Flamengo and 2017 winners Grêmio. Flamengo, the league leaders in Brazil beat fellow Brazilians, Internacional in the quarter-final. They’re in good form at the moment and consolidated their position at the top of Série A with a 3-0 win over Palmeiras on September 1.

Flamengo and Palmeiras are two of the richest and culturally important clubs in Série A, with considerable financial clout on the domestic front. Flamengo are said to have more fans worldwide than any other Brazilian club with an estimated global audience of 35 million. In 2018, their revenues totalled R$ 542 million, which equates to around US$ 130 million and is the second highest total after Palmeiras. Flamengo received more TV money than any other Brazilian club.

Compared to the giants of European football, this is relatively small beer and underlines the gap between football markets either side of the Atlantic. The average annual wage of a top level Brazilian footballer is US$ 670,000 which explains why young Brazilian players are leaving for Europe or China at an even earlier stage of their career than they did in the past.

Despite this, Brazilian football is now starting to attract stars from Europe, albeit some players that are at the vintage stage of their careers. Flamengo have been adept at taking players to Brazil this past year and recently made an audacious bid to take the mercurial Mario Balotelli to Rio de Janeiro.

Flamengo had a transfer budget of R$ 100 million (US$ 25 million) and made a number of expensive and high profile signings. They’ve currently got Inter Milan’s 22 year-old striker Gabriel Barbosa, known as Gabigol, who has scored 14 goals in the league this season, including two in the recent win against Palmeiras. Barbosa has regained his confidence during this loan spell but looks certain to Italy at some point.

Gabigol’s wages are a point of discussion in Brazilian football circles – Flamengo are paying R$ 15 million. Even more money has been spent on Cruzeiro’s Uruguayan midfielder Arrascaesa, who cost R$ 64 million and has an annual wage of R$ 18 million. This is the most expensive transfer ever between Brazilian football clubs, but the quality of his passing means that few are complaining. Another big fee (€ 11.8 million) was paid to Roma for 22 year-old central midfielder Gerson. Two experienced players from Europe, 34 year-old Rafinha from Bayern Munich and Atlético Madrid’s Filipe Luis were both picked-up on free transfers. In addition, Flamengo also bought central defender Rodrigo Caio from Sao Paulo and midfielder Bruno Henrique from Santos.

Flamengo also lured former Benfica and Sporting Lisbon manager Jorge Jesus to Brazil to replace Abel Braga, who resigned in May. Jesus needed little persuasion to take up the challenge: “What convinced me was the greatness of Flamengo. I’ve always been told that Real Madrid, Boca Junior, Barcelona and Flamengo are the biggest clubs in the world. These are my references. If it was for financial reasons, I would not go to Brazil, I’m going to win titles.” Jesus apparently turned down the chance of managing in England with Chelsea and Newcastle and was also being courted by AC Milan.

2019 has been a mixed year for Flamengo, however, one that has been tinged with tragedy. In February, there was a fire at the club’s training ground and sadly, 10 young players were killed. The club has a tradition of youth development, one of its most famous players, Zico, came through Flamengo’s system. Then motto of its academy is, “we make our star players at home”.

Flamengo’s expensively assembled team went into the 2019 season as one of the favourites for the title. They have a 100% record at home in the league and have recently beaten their Libertadores semi-final opponents Grêmio 3-1. Flamengo are the best supported team in the Brazil with an average gate of 53,000 this season.

The fans, among the most passionate in the world, crave success and when things go wrong, they are not slow to vent their frustration. When Flamengo were knocked out of the Copa do Brasil away at Athletico Paranaense, they were met at Rio airport by fans hurling abuse at them.

On the road they have been less convincing, winning only twice in eight games. It is a similar story in the Copa Libertadores, where they have won just once in five ties.

But there is high expectation in Rio that Flamengo can not only be champions of Brazil but also win the Libertadores. Jesus, with his emphasis on all-out attack and flexible formations, wants to win prizes and the club is also keen to have a stab at winning the FIFA Club World Cup this year, but of course, they have to qualify first.

Flamengo made heavy weather of their Libertadores group, which included Ecuador’s LDU Quito, Peñarol of Uruguay and Bolivian side San José. They scraped through on penalties against another Ecuadorian team, Emelec in the round of 16 before winning 3-1 on aggregate against fellow Brazilians Internacional in the quarters.

Surprisingly, Flamengo have won the Libertadores just once, in 1981, with a team that included Júnior, Zico and Leandro. They went on to beat Liverpool 3-0 in the Intercontinental Cup in Tokyo.

A similar success in 2019 – some Flamengo fans see Liverpool’s 2019 Champions League triumph as an omen – would help to broaden the franchise of the Rio club. Brazilian football has to become more global in order to compete with Europe and Flamengo, the most popular club on social media in Brazil, with only Corinthians remotely close to their 22 million-plus followers, could just be the club to lead the way.


Photo: PA


Brazilian clubs to the fore again

TWO Brazilian and two Argentinian clubs will contest the semi-finals of the Copa Libertadores at the end of October 2018. Grêmio, the holders, and Palmeiras will face-off against the Buenos Aires duo, River Plate and Boca Juniors. Two enticing ties are in prospect, but the last four line-up is arguably one of the strongest of recent years.

Brazilian clubs have won five of the last eight Libertadores, although only one of the last four. Interest in domestic Brazilian football seems to be on the rise once more with the average attendance in the 2018 season touching 19,000 – the highest for some time. Of the 20 clubs in the top flight, 12 are enjoying higher gates, notably Flamengo, whose 50,000 average is around three times their 2017 figure.

There’s also good news for Brazil in the form of new broadcasting agreements. The Joint venture between BR Foot Sports Media and FanHero will create a global OTT service devoted to Campeonato Brasileiro Sèrie A.  The deal for international media rights is not yet finalised with all 20 clubs, but most clubs have agreed to cede these rights to the Brazilian football confederation so they can be sold on a collective basis. The deal looks set to be worth USD 150 million to Brazilian football.

According to KPMG’s Football Benchmark, TV rights account for around 50% of revenues for Brazil’s Serie A clubs, versus 30% from commercial activity and 20% for matchdays.

Brazil, despite the mass interest in football, is way behind Europe in terms of financial strength. In Soccerex’s Football Finance 100, published earlier this year, 11 Brazilian clubs were in the list, but none higher than 71stplace.

A survey by Sports Value, in May 2018, revealed that the Brazilian football market generated around R$ 6.25 billion in revenues (equivalent to € 1.2 billion), with 81% attributable to the top 20 clubs. KPMG estimated that revenues among clubs have rose by around 30% between 2015 and 2017.

KPMG noted in its recent paper,  A Wealth of Potential,  that the most profitable club in 2017 was Flamengo, whose profit reached € 44 million. The Rio de Janeiro-based institution, which plays at the famous Maracanã stadium, has recently been boosted by the sale of the 18 year-old prodigy, Vinícius Júnior, to Real Madrid for the equivalent of € 46 million.

This transfer, plus the sale of Grêmio’s Arthur Melo to Barcelona (€ 31m-plus), underline that Brazil is still capable of developing and selling young talent to Europe. KPMG said: “Player trading activities continue to play an important role in the Brazilian business ecosystem. Being well-known “talent-factories” and sellers, clubs have historically relied on income from outgoing transfers. This trend is still present, as evidenced by a 63% increase in the aggregate profit on the disposal of players’ registrations over the three seasons under analysis (2015-2017).”

Indeed, Europe’s top clubs in 2017-18 all had a Brazilian in their title-winning squads, including Manchester City’s Jesus and Fernandinho, Real Madrid’s Marcelo, Barcelona’s Coutinho, Bayern’s Rafinha, Juventus’ Sandro and PSG’s Neymar. Wherever there is success, there is a key Brazilian playing his part, and wherever you go in the world, Brazilian footballers of all standards can be found plying their trade.

Further evidence of the mobility of Brazilian players is found in the country’s World Cup squad for 2018 – only three were playing domestic football. In 2002, almost half the Brazil squad was still employed in Brazil, underlining that talent is now exported earlier in players’ careers.

That hasn’t stopped players’ wages from taking-up over half of club operating revenues. KPMG reported that salaries as a percentage of revenues have been a stable 57%, which compares favourably to the Premier League (58%) and La Liga (55%) and is lower than both Italy’s Serie A and France’s Ligue 1. But as highlighted by LEK Consulting in May 2018, the high indebtedness of Brazil’s leading clubs, along with poor operating results, have made it difficult to pay competitive wages to retain talent. The highest payroll at the end of 2016 was found at Palmeiras with a total wage bill of US$ 40 million, way below the lowest Premier League club. LEK said in order for Brazilian clubs to become competitive, they would need a cash injection of between US$ 0.6 to US$ 1.2 billion per year.

Brazilian clubs have been fortunate in that they have benefitted from significant levels of debt forgiveness and extension from the government. Around 55% of clubs’ debts are with the government in the form of taxes and fees, but this process, along with a requirement for greater financial transparency, is part of the Programme for Modernisation of Management and Fiscal Responsibility of Brazilian Soccer (Profut).

There’s no doubt that Brazilian domestic football represents the only possible competitor to Europe, given its ability to continually develop exciting talent. The league is more open than most European competitions as demonstrated by the fact there have been six champions over the past 10 years, with São Paulo’s Corinthians, the last team from Brazil to win the FIFA Club World Cup, securing three titles in that period.

Whether it will ever to be possible for Brazil’s clubs to be able to compete globally depends on the economic development of Brazil itself as much as the evolution of football. Brazil has, repeatedly, promised much down the decades, but its potential still remains largely untapped. From a football perspective, some market watchers, such as LEK, advocate a new model for the Brazilian game.

LEK said, in its paper on Brazil: “In order for Brazilian football to thrive as a sector, a sport and form of entertainment, the country’s main football clubs must relinquish the existing model in favour off a mixed-capital company club model that includes the participation of the club association and private investors. This change in model would be a fundamental step toward starting a cycle of virtuous transformation that would allow Brazilian football to improve in terms of both revenues and international competition in just a few years.”

The authors of the paper, Fernando Monteiro and Fernando Fernandes, added that without this change, the potential of Brazil’s biggest clubs will never be realised and the nation’s best players will continue to flourish in the better-equipped European leagues.

KPMG, meanwhile, point to the ongoing discussions about competition alignment to the European calendar as further evidence that local stakeholders are looking to harness Brazil’s economic potential and position its football league as the long-term sustainable competition in South America. Over the coming weeks, the Copa Libertadores will reveal if Brazil’s top clubs are the best in the region.

Sources: KPMG Football Benchmark,  Soccerex,  LEK Consulting,  Sports Value,  BicharaeMotta,

Photo: PA