Investing In Brazilian Football – Opportunities & Risks Under The New Legal Regime
Brazil, “o país do futebol”, is arguably the country most synonymous with football. Yet despite the national team’s continuous success, and some of the largest, most ardent, fan bases in the world, Brazilian football clubs trail European clubs significantly in financial fire power. Brazilian clubs generate just 2% of global football revenue.1
Debt levels in 2020 stood at R $10.3bn (US $1.9bn), up 19% from 2019, an average of R $450m (US $83m) per club; and
Combined Revenue fell 14% year-on-year (YoY) to R $5.3bn (US $998m). Further, commercial revenue made up just 13% of total income compared to an average of 43% amongst European clubs analysed in the Deloitte Money League.3
On top of the precarious financial position, for decades Brazilian clubs have been stricken with poor governance by elected officials, who are often unpaid, appointed based on popularity and who offer short-term fixes. As a result Brazilian football has been an unattractive proposition for many outside investors.
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Felix Vetter is a Managing Director at Ankura Consulting Group LLC. He is a forensic accountant with over 12 years of experience, specializing in leading complex, high-profile, multi-jurisdictional investigations into areas including fraud, financial statement manipulation, bribery, and corruption. He has experience working on forensic engagements in Europe, Russia, Africa, Middle East, and Asia Pacific where he has led investigations and compliance reviews across a broad range of industrial sectors.