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The crisis of Brazilian football

The Financial Times had a very interesting article yesterday by Bryan Harris about football in Brazil suffering under a debt burden. Yet I think it could have been an even better article if the Pink 'Un had separated out those factors that arose from globalisation and could apply in any country in the Global South and those that were specific to Brazil.

The article argues, 'Following years of financial mismanagement and corruption, some of Brazil's biggest clubs are on the brink of collapse' and may not survive 2020. Revenue from TV rights has increased 160 per cent over the past decade, but this has been outpaced by the cumulative debt of the 20 top league teams that has soared to $1.7bn.

Some of the patterns that are noted are common to football in general. Some 40 per cent of club revenues come from TV rights - lower than for many Premier League clubs, but still substantial.

An increasing portion of revenue comes from player sales, some 24 per cent, which is used to fill the gap between revenue and expenditure, but that applies to many European clubs as well. It is, of course, a rather volatile and unreliable source of income. You can hit pay dirt one year and make a net loss the next.

Brazil exports more than 1,000 players a year. That, of course, happens across the Global South, although Brazil's figure is higher than any other country (but then it also a very high population relative to almost all other Global South countries). European clubs can offer better salaries; better facilities and training; and a higher profile for successful players. (Some players will go to China or the US, but the main flow is to Europe.) There is no doubt that this outward flow hits the quality of matches and demoralises fans which helps to explain why stadiums are on average occupied at below half capacity on match days.

There are some factors that are specific to Brazil. The lack of inward investment in football is partly explained by the fact that a club would need to adopt a formal company structure. In that case clubs would have to pay more tax rather than being treated as non-profit organisations.

The non-profit structure means that the biggest teams have powerful executives chosen by popular vote. 'Critics say the result is financial mismanagement and, in some instances, graft.' However, corruption is a broader problem in Brazil.

What we can see is that football finances are 'glocal', influenced by both local and global forces.

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