Continuing from yesterday’s entry, let’s look a little deeper into the imbalance between the three main revenue streams available to football clubs in Brazil. I mentioned in the previous part of this series that European clubs are shared between the major sources as follows: TV 40%, matchday 30%, commercial 30%. In Brazil, matchday sources average around 15% of total revenue. In light of this, it’s hard to avoid the analysis that Brazil has considerable room for improvement in maximising its stadium revenue streams. Taking its cue from football grounds in the UK in the past 25 years, Brazil could take a number of steps to emulate the success of new and improved stadia in England and Wales in particular.

The stories of relocation and redevelopment of football facilities are perhaps one of the longer lasting legacies of the growing affluence of the game, particularly in the higher leagues of professional football. The examples of Arsenal’s new home and the fight for a new ground for their North London rivals, Tottenham Hotspur provide good evidence of the importance of growing matchday revenue. If Brazil’s top clubs want to generate more income this way, they will need investment either privately or through other channels such as the UK’s Football Stadium Improvement Fund. As it is, Brazil’s stadium infrastructure suffers for a combination of reasons such as lack of facilities, indifference due to low contribution made by stadium income and lack of commercial know-how.

With signs emerging in the last couple of years that football clubs in Brazil are better able to hang on to their better young players, clubs increasingly look for other sources of revenue to allow them to progress. One such new source of finance has emerged as international investment funds have sought to put money into Brazilian football in search of profits from player sales in particular. Media Sports Investments (MSI) is one of the best known examples of this type of operation. In a report at the time, MSI were noted as having taken a ten-year controlling stake in Corinthians, agreeing to invest over $35m and buying stars such as Carlos Tevez from Boca Juniors.

At the time of the MSI buyout it was unclear where the funding came from to support their investment in Corinthians. It was thought likely that the source was Russian oligarchs operating from the UK. In tomorrow’s entry, I’ll analyse the ownership of Brazil’s football clubs and players by investment vehicles such as MSI and Traffic Sports Marketing in more detail.