The Business of Football in Brazil

29Sep08

Carlos Alberto Perreira, former coach of the Brazilian national team, has stated that the reason why the England National team is so poor is not because there are so many foreign players in England, but it’s because there are so few English players in other leagues. So does that mean the reason Brazil are so successful is because of their numerous exports? Last year, 1,085 Brazilian players were transferred to places as diverse as Vietnam, Qatar and the Faroe Islands, according to the Brazilian Football Confederation.

Football has evolved from ‘only a game’ to big business in Brazil. Companies, such as Media Sports Investment and the aptly named Traffic, have now begun to trade in football talent. These companies use their own, or borrowed, capital to buy up the contracts of young Brazilian footballers. They then loan the players to teams who cover the players wages and offer them exposure.

If one of these footballers earns a transfer to Europe, it is the company that receives the largest share of the transfer fee. The player usually benefits from a signing on fee and a dramatically increased salary. Traffic’s president Julio Mariz has said: “Instead of investing in the stock market or real estate, we are investing in buying the economic rights to football players”.

These deals have become a contentious issue in Europe, mainly because FIFA, football’s international governing body, banned third-party involvement in transfers. This was due to the scandal in England over who owned two Argentine players – Carlos Tevez and Javier Mascherano – who were transferred from Brazilian club Corinthians to West Ham in 2006. Traffic flouts this rule by signing all players to their own small club, Desportivo Brasil, and loaning them to partner teams such as Palmeiras.

A statement from FIFA said it had not investigated the Brazilian system because no formal case had been brought to their attention. When pushed, the FIFA spokesman added “It is clear that they are not supposed to do that, and it goes against the regulations”, citing the rule that was passed in January, which states: 

“No club shall enter into a contract which enables any other party to that contract or third party to acquire the ability to influence in employment or transfer related matters its independence, its policies or the performance of its teams.”

Many people in Brazilian football would argue that without outside investment many Brazilian football clubs would struggle financially. Traffic are not the only company exploiting the poor financial state of football in Brazil. Several funds like Traffic have sprung up over the last year and some major Brazilian companies – including supermarket chains – are creating football investment departments hoping to reap the rewards from rich European clubs.

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