Why Doesn't Anyone Want To Buy A Brazilian Team? - plus55


Billionaires have recently made a habit out of buying football teams. But nobody is interested in buying one in Brazil, the “land of football”
Brazil Sports

Since the early 2000s, we have seen the growth of a peculiar phenomenon in the world of football: a billionaire from a developing country buys up a mediocre team, injects rivers of money (sometimes with dubious origins), and, after a few years, turns the club into a veritable powerhouse. The first such case was Chelsea FC; the club was taken over in 2003 by Roman Abramovich, a Russian businessman of questionable morals. Back then, Chelsea was on the brink of a financial collapse. Today, the club has won many Premier League titles and two European trophies.

The latest major takeovers come from Italy. Inter Milan has recently been sold to a Chinese group – and AC Milan will also have Chinese owners in the near future. The list goes on and on. In 2009, Roma supporters even started a movement asking for a billionaire to buy up the club due to its terrible financial situation.

From the standpoint of a supporter, this seems like a good bargain. Could this become a thing in Brazil, though? The answer might surprise you: nope. Not really.

“Many European clubs are companies with their stocks sold, like any other company. Brazilian clubs are not like that, as their rules are more similar to Barcelona’s or Real Madrid’s. Those two have statutes preventing them from being sold to one individual or group,” says marketing consultant Amir Somogi.

While there are many smaller clubs run like companies, the traditional clubs are a different ball game. There were created as social clubs (the football operation being simply a part of it), and they have a board of counselors and thousands of owners. They could, of course, change their statutes to become a regular company, which would allow them to be taken over by a rich benefactor.

So why don’t these clubs go for it? If you suspect money might be the reason, you’ve guessed right. Social clubs enjoy pretty generous tax exemptions, paying only 5% of their net profit per year. If they were to become an open-capital enterprise, their taxes would jump to a staggering 34%. No wonder this idea isn’t so appealing to the clubs.

A bill currently being analyzed in Congress is looking to change football teams into regular companies. Its sponsors propose a from between the current tax system to a regular one, thus facilitating the change. However, there is no timetable as to when congressmen will vote on the bill.

Traumatic experiences

Taxes are not the only reason that Brazilian teams don’t want to become “normal” companies. The last time the big clubs associated their football operations with private corporations, the aftermath was pretty traumatic.

Palmeiras, a São Paulo-based team, was associated for ten years with the Italian dairy company Parmalat. While the partnership lasted, it was very successful; Palmeiras won every major title it could during the 1990s. Once it was over, though, Palmeiras suddenly found itself left with barely any money. Victories were few and far between, and the club has been relegated to Brazil’s second division twice in the last decade.

But maybe the real reason nobody wants to buy up a Brazilian team is pretty trivial. Maybe Brazilian teams simply aren’t attractive enough. Brand Finance, a British consulting firm, released a ranking this week listing the top 50 most valuable brands in football. And guess what? No Brazilian teams made the cut.