Unlike Botafogo and Cruzeiro, smaller SAFs profit from reselling shares or players

If buyers from Botafogo and Cruzeiro are betting on a business model that involves big fans and the transformation of the club into a brand known and explored worldwide, most Brazilian clubs live far from this reality.

This does not mean that lesser associations remain outside the marketing universe of company-clubs after the approval of the SAF law.

But, away from the spotlight, medium and small clubs need to pay attention to the fact that the logic and risks are different.

experts heard by leaf explain that there are two main models when we talk about clubs in the B, C and D series: the one based on the formation and sale of players and the one that bets on the rise of a club and then resells it.

Each project depends not only on the characteristics of the buyer, but also on the association itself.

For the first model, a club with less fans is more interesting. On the other hand, a good structure of training centers and good professionals in the football department and in attracting athletes favor the business, whose success basically consists of the ability to negotiate players.

Therefore, buyers are often also (or connected with) players’ managers. An example is Estoril, in the Portuguese second division.

Thairo Arruda, a partner at Matix Capital, a consulting firm for investors, says that some managers prefer not to move up a division, since the costs of operating in lower series are lower.

“In the second model, there is an alignment of interests with the fans, and the investor earns the return when he sells his club in a higher division, for a greater value than what he paid when in a lower division, already considering the costs with investment in football”, explains Arruda, who worked alongside Danilo Caixeiro in the sale of Botafogo and now works with John Textor.

Cesar Grafietti, economist and partner at the consultancy Convocados, draws attention to the need to generate revenue as the club gains projection.

“You need a city with a fan appeal and an influence in the region so, if the club grows, put 25 thousand people in a stadium. [ingresso, sócio, publicidade] that can help in the daily operation of the club, which will be more expensive”, says Grafietti.

Journalist, researcher at UERJ (University of the State of Rio de Janeiro) and author of the book “Clube Empresa” (Corner, 2020), Irlan Simões disputes that this appreciation may not be that simple.

“It is very seductive to imagine that your club will be bought by a billionaire investment fund. There is the illusion that, with a financial contribution and a sporting result, in the future the club will have a bigger fan base and, consequently, be rich. centenary of a football club, it is not the result of ten years that will change that”, says Simões.

And how much is a series B, C and D club worth? It’s still too early, they say, to talk about these numbers precisely. It is necessary for the market to mature, in addition to the particularity of each investment, such as the size of the crowd and the value of the cast.

Also the results, in both models, should take time to appear. For an export club to be able to structure its basic categories, train generations of young athletes and consolidate itself in the market, Cesar Grafietti estimates that it will take at least ten years.

The resale model is more difficult to predict. Success in the field can take longer than expected. It is also not enough to reach the elite, it is necessary to establish yourself in it — and then find a new buyer.

“It’s a startup model. In Europe, five to six years is a reasonable time, but because there is already more demand than supply for a team that goes from the third to the first division. Here the market is developing, there are few interested parties, so this process should take about seven, ten years”, comments Grafietti.

He projects that, for youth clubs, the main stakeholders will be those buyers who have a network of football businesses, be they entrepreneurs, billionaire conglomerates (such as City Football Group) or long-term maturation funds.

As for the resale model, the economist imagines buyers coming from large investment funds or groups of fans with money – as is the case, for example, of Atlético-MG.

​Irlan Simões sees a certain rush on the part of many clubs that, still without a solid SAF project, already want to sell their shares. The risk is to end up in the hands of buyers with vested interests or who do not have the competence to manage the business.

He recalls, for example, that there is a provision in the law that exempts player transactions from taxation for five years.

“In five years, a businessman does a beautiful damage to a football club: he forms two, three generations of base, sells without taxation and then gets out. to the market”, he says.

In the resale model, warns the author of “Clube Empresa”, it is necessary to have solid guarantees that the buyer does not abandon the boat if the sporting performance does not come quickly.

“This is the chicken flight perspective, a concept created by [advogado] Luciano Motta. The club gets an initial differential after the contribution, but from that first moment, the owner will want to tie the account and recover what he invested “, he says.

“If he has an urgency to sell, that is the big problem, because he can give his share to anyone. And the association behind the company, with a minority share, may not be able to choose its new partner.”