Not so long ago, footballers from Brazil arrived in Europe in their droves, seeking incomes that few could dream of back in their homeland. According to an article in the FT that I read today, though, the tables are turning. The article reported on new-found wealth entering the game in Brazil, with investment, sponsorship and broadcasting income rising swiftly. This final run of blog entries of this academic year ends with a look at Brazil’s football economy. It will analyse finance in Brazilian football and how player ownership appears to fuel overseas and domestic demand for the current crop of stars.
Clearly, with the number of footballers from Brazil exported abroad having sky-rocketed in the past 30 years (see Graph 1 on page 5 of this link), there is a great deal of ground to be made up in keeping Brazil’s homegrown players within that country. By retaining the best players in the domestic leagues, Brazilian football can boost its appeal, creating a virtuous circle of better players – higher attendances – higher viewing figures – bigger sponsorship deals and so on.
The FT article, though, indicates that one of the key factors driving the retention of players in Brazil is the strength of the Brazilian currency, the Real. We can track the strengthening of the Real in the past year, with this Sterling to Real chart from the BBC. While this indicates an 11% appreciation of the Real against the British Pound, that seems hardly sufficient in itself to persuade stars such as Denilson to leave the UK and return to Brazil.
When you look into the wages that some clubs in Brazil are able to offer their top players, you begin to understand why some observers think the Brazilian exodus may be reversing. Reports suggest that Neymar, the latest star tipped for global success, is staying at Santos in part due to the £400,000 he is paid every month. And while the club only pays around 20% of this, with the rest coming from sponsors, it still means that a top Brazilian club is able to compete with the top of the European football richlist, for now at least.
According to some, football in Brazil seems set to emulate the wider success of the general Brazilian economy. As income levels rise, especially for median income households, the climate for business growth improves. If domestic investment can help meet the inevitable demand that follows, some feel that the country’s success can be sustained. For the football sector that may mean an upward path of revenue growth, spectator involvement and player retention. As with the English Premier League model of success, though, it could also risk undermining the credibility of regulation in the sport.