Pulling Power

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There used to be a time when Brazilian footballers were being shipped off to Europe by the barrel load at bargain prices. When European football was seen as the gateway to making fortunes. But with Europe in stagnation, the Brazilian economy blossoming and sponsorship and TV revenue levels on the rise, could the financial football tables be on the turn?

Aided by the strength of the Real and the weakness of the British pound and the Euro, the Brazilian economy, declared in December 2011 as the sixth largest in the world, has had a positive effect on the financial standing of domestic clubs. With multi-million-pound deals effectively cheaper, 2010 saw spending on new players in Brazil increase by 63% compared to 29% witnessed in Europe. Although some of the nation’s renowned names, including Adriano and Ronaldo, have seemingly flocked back to their homeland for their last big paydays, the recent high-profile arrivals of Vágner Love and Jádson from Russia and Ukraine respectively in last month’s Transfer Window, both at important stages in their respective careers, suggests that the appeal of the Brazilian game is widening. 

Whilst some players have cited personal problems or pushing for a place in the Brazilian National Team Squad for the 2014 FIFA World Cup Finals as reasons for their return, financial motives are never too far away. The increased levels of sponsorship that have gone hand in hand with the country’s economic progress have become integral. The sports marketing company Traffic is understood to pay around 80% of Ronaldinho Gaúcho’s R$1,000,000 monthly salary at Flamengo CF whilst the large pharmaceutical company, Neo Quimica, who sponsor last season’s Campeonato Brasileiro Série A champions Corinthians, are thought to contribute significantly to the R$1100,000 wages of striker Liédson. But the exploration of clubs as brands, fuelled through the mediums of advertising and especially TV, has become equally important.

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Up until 2010, Brazilian clubs were negotiating TV rights deals collectively as part of the Clube dos 13 organisation. But now with the license to pursue these rights on an individual basis, some clubs are already reaping the rewards. According to their financial statements, under the collective agreement Corinthians received €10,300,000 in 2007 and €24,700,000 in 2010. An agreement with TV Globo last year will see the club receive in the region of €40,500,000 per annum until 2015. According to Marcos Motta, a partner at the law firm RBMF Advogados, it is estimated that the total revenue across the Campeonato Brasileiro Série A will rise to above the €400,000,000 mark – putting it on a par with the current TV rights deal in France’s Ligue 1.

Despite the import-export cycle appearing to be reversing, the primary challenge now facing Brazilian clubs is being able to hold on to their most coveted stars and thus stopping the haemorrhaging of talent to, amongst other regions, Europe, as in previous years. And the clubs renewed confidence and stance would suggest that they are currently winning the battle. In 2010 Santos rejected a £20,000,000 bid from Chelsea for wonderkid Neymar who has subsequently signed a contract that will see him stay at Peixe until 2014, Internacional have turned down several bids from European clubs to hold on to their 22-year-old striker Leandro Damião and São Paulo have gone the extra mile by placing a mind-blowing £70,000,000 price tag on their teenage midfield sensation Lucas Moura.

And whilst there is no denying that the Brazilian football market has benefited from strong economic growth in the last decade, there is a fear that with only a handful of Brazilian clubs, namely the likes of Corinthians, Flamengo CF and São Paulo, being able to afford high wages and transfer fees, in some cases equivalent to those offered in the European game, that a gap may soon begin to develop between the aforementioned and the rest in the Campeonato Brasileiro Série A. Furthermore, with a number of clubs finding themselves increasingly relying on sponsors due to being unable to manage their debts, further doubts will undoubtedly be raised as to whether this particular structure is sustainable in the short and, in particular, long term.

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Although the value of the Brazilian player may now appear to be greater off as opposed to on the field, the next high profile signing could prove to be the catalyst for a renaissance in the domestic game. It’s premature to suggest that the powers in world football are shifting but the football and financial world will be eagerly anticipating Brazilian football’s next big move.

Twitter: @aleksklosok

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