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Brazilian football is undergoing significant changes, marked by the influx of substantial capital into its major clubs. Now, Brazilians are no longer just sellers but can also retain and pay top prices for players.
Brazilian club football is at a crossroads. Dramatic changes are taking place that will have a long-term impact on its development and financial strength. In 2021, the Brazilian government passed a law making it easier to privatize football clubs. They created conditions for a new corporate structure with low taxation. Previously, most clubs operated as non-profit associations led by elected members. The legal change immediately triggered a "gold rush," as various domestic and foreign investors became interested in buying clubs under the new conditions.
Even before the new law, the Red Bull conglomerate entered the second-division club Bragantino in 2019, transforming it by 2020 into a top-tier team following their usual formula. In December 2021, one of the greatest footballers of all time, Ronaldo, purchased a majority stake in his boyhood club Cruzeiro, one of Brazil's largest clubs, which had fallen on hard times and was languishing in the second division. Ronaldo quickly returned it to the top tier.
In January 2022, American John Textor bought Botafogo, another fallen giant stuck in the second division, and quickly transformed it into a title contender. In February 2022, 70% of the third fallen giant, Vasco da Gama, was purchased by American investment firm 777 Partners, which, due to financial problems, lost the right to manage the club by court order in May 2024. In May 2023, the Emirati group City Football Group joined this "happy band" of international capitalists by buying Bahia.
With over 200 million inhabitants, Brazil is a vast and underutilized football market. The potential for the country's twelve largest clubs (known as the G-12) to become global brands like Europe's giants is immense. Flamengo, with 46.9 million fans, is by far the largest and most popular club in South America, followed by Corinthians (30.4 million), Sao Paulo (21.2 million), Palmeiras (16.5 million), Vasco da Gama (13.2 million), Cruzeiro (13 million), Gremio (9.8 million), Atletico Mineiro (9.2 million), Internacional (7.5 million), Fluminense (7.2 million), Santos (6.6 million), and Botafogo (4.2 million).
Without a doubt, this elite group would also include Bahia, Coritiba, Athletico Paranaense, Sport Recife, and a few other big clubs with millions of supporters. By comparison, Argentina’s two biggest clubs would rank only fifth and sixth. Boca Juniors has 16.1 million fans, and River Plate has 13.7 million.
Despite their enormous popularity, Brazilian clubs still financially trail Europe. In 2013, Corinthians ranked 16th on Forbes' list of the most valuable clubs in the world, but since then, no Brazilian club has made it into the top twenty. Today, the Sao Paulo giant is in serious trouble and fighting to stay in the league. Nevertheless, club president Augusto Melo has firmly rejected any possibility of privatizing the club, stating that it belongs to the fans.
Alongside the privatization of some clubs, the idea of privatizing the league is also emerging in Brazil, as the English did in 1992. However, clubs cannot agree on revenue distribution, splitting into two camps. On one side is Liga Brasileira de Futebol (Libra), founded in May 2022 by the biggest clubs Flamengo, Corinthians, Palmeiras, Sao Paulo, Cruzeiro, Santos (currently in the second division), Red Bull Bragantino, Bahia, and ten others. On the other side is Liga Forte Futebol do Brasil (LFF), established in June 2022 by Botafogo, Vasco, Fluminense, Internacional, and Sport Recife, later joined by Libra founders Corinthians and Cruzeiro. LFF currently has 32 members from the first, second, and third divisions.
Libra advocates a model where 40% of TV rights revenue is equally distributed among clubs, 30% based on sporting success, and 30% on TV viewership. LFF wants 50% of the revenue equally distributed, 25% based on success, and 25% based on viewership. Under the current media contract with Brazilian conglomerate Globo, each club individually negotiated its share, with one-quarter of the profits going to just two of the most popular clubs, Flamengo and Corinthians. The contract expires this year, and by 2025, we may see the establishment of a new, privatized Brazilian league.
Brazilian club football stands at a crossroads, and if the opposing factions cannot reach an agreement, it’s possible that two separate private leagues could be formed. This would undoubtedly be detrimental to the clubs and Brazilian football as a whole.
If, however, the clubs can come to an agreement and the trend of foreign investors entering Brazilian football continues, the Brazilian league could soon become a serious competitor to the biggest European leagues. Certainly, a much more serious competitor than Saudi Arabia or, in previous years, China. By simply offering the best Brazilian players similar financial conditions to those provided by the biggest European clubs, they could stop the exodus to the old continent and elevate the level of the domestic league.
The potential is immense, but whether it will be realized remains to be seen in the coming years.