For most of his extraordinary time as a footballer, the late Pelé played in Brazil for the Santos club. But so many of the legendary player’s compatriots have had to venture abroad in search of financial rewards and tougher competition.
It’s something two opposing consortia vying to create a new domestic competition in the football-mad country hope to change.
The model, inspired by the English Premier League, will be controlled by clubs rather than the national federation. The idea is to unlock the commercial potential of the game in Brazil and improve its quality, with the backing of big bucks.
In theory, a club structure should allow for the collective negotiation of transmission rights, leading to more lucrative transactions than those obtained on the current individualized basis. Higher salaries could in turn convince young talent to stay at home longer.
“Our vision is that in 10 years we can reach the French championship in terms of overall revenue,” says Lawrence Magrath, co-founder of Codajas Sports Kapital. His Liga do Futebol Brasileiro The project, or Libra, has the support of 16 clubs from the two existing national top divisions.
With advice from bankers at BTG Pactual, the group is in exclusive talks with Mubadala, Abu Dhabi’s sovereign wealth fund, over a potential injection of 4.75 billion reais ($890 million) for a 20% stake in the company.
With an expansion of sponsorship and marketing, promoters of a new league believe it could help Brazilian club football achieve the kind of international projection enjoyed by Europe’s top teams.
Manchester United, Real Madrid, Paris Saint-Germain and Juventus have become household names around the world over the past few decades thanks to overseas promotion. Yet despite Brazil’s strong claim to be the spiritual home of the ‘beautiful game’, the same cannot be said of Flamengo, Corinthians or Palmeiras.
“We firmly believe that in 20 years we can be the second biggest league in the world, only after the [English] Premier League. We have the raw materials and a time zone that is transmission friendly overall,” adds Magrath.
However, disagreements over how to distribute broadcast revenue between clubs fairly and competitively caused a split. A disruptive initiative Strong Football League, has 26 clubs on board and is advised by investment firm XP and professional services group Alvarez & Marsal. He is in talks with an anonymous group of American investors.
While selling a slice of the league to private non-club shareholders might prove controversial in other countries, there has been little to no resistance among the faithful in Brazil. This could be due to negative perceptions of the federation due to past corruption scandals, the prospect of more resources for teams or simply a lack of awareness.
Both plans are part of a wider push to professionalize the football sector in Brazil. Financial mismanagement has left many clubs in debt. The situation is often blamed on their traditional mode of management: as supporter-controlled non-profit associations with elected presidents.
But following new legislation aimed at encouraging private capital into teams, a handful of buyouts have attracted funding commitments worth tens of millions of dollars. Amir Somoggi, chief executive of consultancy Sports Value, estimates the combined revenue of Brazil’s top 20 clubs could roughly double to around $2.6 billion within five years of a new league. “But clubs will have to stop these arguments over money and think big,” he said.
The consensus is that a single unified proposal will prevail. “The aim is to have all 40 Serie A and B clubs in one proposal,” says a person involved behind the scenes. “The trend now is towards negotiating a merger.”
A year and a half since talk of a new league emerged, there is now pressure to pick up the pace. Time is running out on the respective 90-day periods that the two teams must reach agreements with their potential backers. Meanwhile, talks with major Brazilian broadcaster Globo over new deals starting in 2025 are expected to begin this year.
With most national teams plying their trade at European clubs, the team’s flashes in the Gulf gave an idea of what a revitalized domestic league could have to offer. The question is whether those who are at the origin of the proposals can discover a binding team spirit.