Skip to main content

Outside investors buy up South American clubs

After Brazilian football team Botafogo clinched a sensational league and cup double at the end of last season, its owner John Textor didn’t waste an opportunity to troll his naysayers.  On social media the US businessman and serial soccer investor posted a photo of himself kissing the Copa Libertadores trophy, alongside a WhatsApp message from a detractor.

“You don’t understand anything in football and [sic] waste of time to talk to you. And you will lose everywhere you go,” it read. 

Tagged in the screenshot was Paris Saint-Germain, whose Qatari president Nasser Al-Khelaifi has clashed with Textor, who is also the owner of Olympique Lyonnais in France and no stranger to public dust-ups. 

Yet Botafogo’s success, less than three years since being rescued from financial ruin by its American benefactor, was more than just a personal triumph for Textor. It also provided a showcase for the wave of recent investments into Brazilian football, which has attracted hundreds of millions of dollars in funding promises over the past few years.

Despite an abundance of talent and a famous national passion for the sport, many of the country’s clubs — traditionally run as non-profit associations controlled by fans — have often fallen prey to financial mismanagement and struggled off the pitch. 

The drive to reform the business side of the game was catalysed by a 2021 law encouraging teams to become limited companies. It helped draw in the likes of Manchester City proprietor City Football Group, which purchased Esporte Clube Bahia in 2023 and pledged to invest R$1bn. 

Textor told the Financial Times he believes Botafogo will serve as an inspiration for others. Since the takeover it has increased revenues fivefold and reduced debt levels. The team brought home its first ever Libertadores — the South American version of the Champions League — in November, which also secured the Rio-based side a spot in the new Club World Cup this summer. The future looks bright.

But Brazil may soon have increased competition in the battle to win over international investors.

In neighbouring Argentina, free-market libertarian president Javier Milei is pushing for a similar “privatisation” of clubs. And a group of investors this week (including two already invested in EFL club Wrexham) agreed to buy Colombian team Club Deportivo Seguros La Equidad. Both countries share a key attribute that has helped draw foreign capital to Brazil — a rich source of footballing talent.

Textor — and Brazilian football in general — have benefited from early mover advantage. But others in the region are on the move.

 

Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...
Post a Comment
Read more

Millwall punch above their weight

Millwall’s season was overshadowed by the tragic death of owner John Berylson following a car accident. The American had been an exemplary owner, beloved by the fans for his leadership, passion and generosity. Millwall’s finances had been pretty good during his tenure, which we shall explore by looking at the most recent accounts from the 2022/23 season, when the club narrowly missed out on a place in the play-offs after finishing 8th. Millwall’s pre-tax loss slightly reduced from £12.6m to £12.2m, as revenue rose £0.8m (4%) from £18.6m to a club record £19.4m and player sales improved from a £0.1m loss to £2.5m profit. However, other operating income dropped from by £1.1m from £1.3m to £0.2m, while operating expenses increased £1.7m (5%) from £31.6m to £33.3m. The main driver of the revenue increase was broadcasting, which rose £1.1m (12%) from £9.1m to £10.2m, though match day was also up £0.4m (7%) from £5.8m to £6.2m. In contrast, commercial fell £0.7m (19%) from £3.7m to £3....
Post a Comment
Read more