On a nondescript weekday morning in May, a group of men and women in suits filed into a hotel
in Sao Paulo. A few hours and several litres of coffee later, they filed back out. To the
untrained eye, these resembled the bookends of a generic big-city business meeting.
But this was a lot more interesting and a good deal more important.
In that hotel, the foundations were laid for a plan that could revolutionise Brazilian football.
Together, the presidents of six top-flight clubs — Flamengo, Corinthians, Palmeiras, Sao Paulo,
Santos and Red Bull Bragantino — proposed a breakaway league,
to be run by the clubs themselves rather than Brazil’s creaking federation, the CBF.
They promised better organisation,
a slicker commercial structure and, via a revenue-distribution model that would
mark a major departure from the usual tooth-and-nail partisanship, a brighter
financial outlook for all. They called it the Liga do Futebol Brasileiro — Libra for short.
“This is the future,” swooned Palmeiras president Leila Pereira. A few details still stand in the
way of a unanimous agreement but there is a scent of giddy excitement in the air.
And this has been coming for a long time. The Brazilian domestic game has been held
back over the decades by – among other ailments - bad club owners, poor pitches,
endemic short-termism, corruption, fan violence, an outmoded calendar and logic-defying finances.
Throw in the football federation, whose ability to lurch forward under the weight of its own scandals
would be impressive if it wasn’t so damaging, and you have a perfect recipe for stagnation.
Things have improved slightly in recent years,
but not enough. When images of other leagues are beamed into Brazilian homes,
the quality deficit is hard to ignore. It’s not just the football that is better — the
kits are smarter, the graphics flashier, the stadiums busier, the grass literally greener.
This cuts two ways. For one, a Campeonato Brasileiro game is a
harder sell to a generation of Brazilians accustomed to watching Manchester City vs
Liverpool on Saturday and El Clasico on Sunday. Walk around Rio de Janeiro
today and you’re as likely to see a Chelsea shirt as a Fluminense or Vasco da Gama one.
Perhaps the bigger issue is the ground that has been lost in the battle for
eyeballs further afield. Brazil’s national team is a global institution,
yet its domestic game barely registers beyond the odd Club World Cup match.
“We’ve never sold our football abroad,” Mario Celso Petraglia,
the president of Athletico Paranaense,
told The Athletic. “Our teams are not known around the world. That is a terrible failure.”
The proponents of the new league hope it would address this — initially by selling
TV rights packages more aggressively overseas but also by improving the “product” itself,
such that it might be able to compete with Ligue 1 or, eventually, Serie A or the Bundesliga.
This, clearly, is far easier said than done.
We are likely talking decades rather than years. But there is fresh momentum
here. But there is new energy now thanks to a cluster of accelerating factors.
One is a new ownership model that has been thought up specifically for football clubs,
promising to make them more corporate, more sustainable and even profitable.
Another is the recent influx of foreign investment into Brazilian clubs. John Textor,
the co-owner of Crystal Palace, acquired Botafogo earlier this year; Miami-based 777 Partners have
taken a controlling stake in Vasco; Red Bull has put significant resources into Bragantino
and those who follow football finances closely believe that further takeovers are inevitable.
Above all, there is the tide of professionalism that has washed away some of the cobwebs in the
corridors of power. If the cast of characters that came together in that Sao Paulo hotel
looked like studious number-crunchers, it’s because that’s exactly what they are.
“Club owners used to be populist amateurs,” explains Rodrigo Capelo,
who covers the financial side of Brazilian football for newspaper O Globo. “They weren’t
always the most intellectual. The new wave is a bit different. They’re rational business people.”
There is broad agreement that the clubs themselves, in conjunction with external
investors and consultants, can do a better job at organising a championship than the CBF. But
the success of Libra will ultimately be judged on the chicken-and-egg dance of profits and product:
if revenues increase, the clubs can put more money into their pitches and playing squads,
which should improve the football, which should attract more fans,
which should increase revenues and so on.
The clout of the new league lies in its formalisation of a collective bargaining
agreement. Since 2011, when a bloc of big hitters called the Clube dos 13 (Club of 13) disbanded,
Brazilian clubs have signed broadcast contracts individually.
This was fine for the likes of Flamengo and Corinthians, who could cash in on
their outsized fanbases across Brazil, but it left the ecosystem as a whole weakened.
Things improved a touch in 2019 when clubs began to distribute a portion of TV revenues equally.
This helped modest outfits such as Ceara and Fortaleza to consolidate after being promoted
to the top flight. But because pay-per-view income was not part of that agreement,
significant inequality persists.
According to an Ernst & Young report, a quarter of all TV income earnt by Brazilian clubs
between 2017 and 2021 went to just two teams — Flamengo and Palmeiras. But under Libra,
all broadcast income, including that from pay per view,
would be pooled for revenue sharing. Forty per cent of the total would be split evenly
between the 20 Serie A clubs; 30 per cent would be distributed according to league performance;
30 per cent would be divided according to a range of engagement and audience factors.
So far, only 10 of 40 clubs across the top two divisions have joined Libra.
The rest have banded together to demand more favourable terms.
Yet these feel like surmountable hurdles.
After all, the overall effect of even the most conservative measures would,
according to Capelo’s calculations, constitute a momentous levelling of the playing field.
In 2019, the last season before COVID-19, Flamengo, who won the Campeonato Brasileiro,
earnt nine times as much as Avai, who finished 20th. Even in the last two pandemic-scarred years,
the multiple has been between six and seven. Under Libra, it would drop below four.
It is not so immediately obvious what Flamengo and Palmeiras stand to gain here. Thanks
in large part to savvy work at boardroom level, both have entered virtuous cycles of
growth and success in the last decade. Why would they give up that kind of dominance?
It is evidently not an act of charity. Theirs is a long-term bet: that by sacrificing a little now,
they can bring in even more money further down the line. And maybe, with a little luck,
become global brands like Barcelona, Bayern Munich and Juventus.
There is recognition that the current array of individual TV deals is too messy,
too fragmented to be an attractive proposition to, say, a global streaming service like Amazon.
Acceptance, too, that fans in Europe and the US will be more interested in watching Flamengo vs
Sao Paulo if the stands are full, the presentation slick and Sao Paulo actually competitive.
Indeed, what is especially heartening about the current discussions is that they are underpinned
by humility, not the dumb, insular pride that prompted former CBF chief Jose Maria Marin to
declare, as recently as 2013, that “we don’t have anything to learn from other countries”.
There is now a willingness to look out into the world and adopt best practices from elsewhere,
acknowledging that Brazil has been trapped behind the eight ball for far too long.