The financial performance of Brazilian Série A clubs, the top professional football league in Brazil, is improving but still faces challenges. Aggregate operating revenue has grown by 30% in five years, reaching EUR 1.4 billion in 2023, outpacing the growth rates of European Big Five leagues. While top clubs like Flamengo (EUR 200 million in operating revenue) and Palmeiras (EUR 191 million in squad value) dominate, revenue disparities within the league are stark, with a 12x ratio between the top and bottom clubs.

The upcoming centralised sale of broadcasting rights in 2025 presents a significant opportunity for sustainable revenue growth. “Brazilian clubs are in very poor financial health, a direct consequence of decades of amateur, personalistic and corrupt management by their leaders,” confirmed an independent senior business consultant to Série A football clubs.

LIBRA and LFU, representing different factions of clubs, are negotiating deals worth up to BRL 2.6 billion annually. However, the coexistence of these factions raises concerns about revenue distribution and league unity. As a Brazilian FIFA agent and former professional footballer stated, “Success in sports is key to improving performance and value. Flamengo, Palmeiras, and, most likely, Botafogo this year will achieve this.”

The consultant acknowledged that “the Brazilian Football Association (“CBF”) has not implemented Financial Fair Play (“FFP”) mechanisms, like Europe. And nor does it plan to do so.” Nonetheless, foreign investors are increasingly optimistic about Brazilian Série A clubs. “The viability of Brazilian football depends on SAFs,” attested the FIFA agent. The Sociedade Anônima do Futebol (“SAF”) regime, established in 2021, encourages better governance and financial management.

“The Brazilian Football Association (“CBF”) has not implemented financial fair play mechanisms, like Europe. And nor does it plan to do so.”

Independent senior business consultant to Série A football clubs, Brazil

This framework allows clubs to transfer assets free of liabilities, issue private bonds and benefit from favourable taxation, making investment more secure and attractive. “The creation of SAF involves cleaning up the club as it must consider debts with the INSS [Brazil’s Social Security Fund] and municipal, state and federal taxes,” the Série A club consultant retorted. However, the agent advised that investors should closely monitor “the devaluation of the Brazilian real, the non-existence of Financial Fair Play and the tax structures which will help dodge Brazilian interest rates and completely unrealistic salary structures.”

“The greatest issue is that compliance and risk departments of leading banking entities do not authorise operations with sports clubs.” The business consultant specialising in revenue, financial consulting and corporate management continued, “This scenario forces clubs to seek financing from second or third-tier banks with the increase in interest that this implies in a country where the official interest rate is 11.75%.”

“The greatest issue is that compliance and risk departments of leading banking entities do not authorise operations with sports clubs.”

Specialist in revenue, financial consulting and corporate management, Brazil

Despite significant growth in sponsorships and partnerships, Flamengo and other Série A clubs lack the global branding and marketing appeal of European giants like Manchester United or Bayern Munich. While stadium infrastructure has improved since the 2014 FIFA World Cup, matchday revenues are still far lower than in Europe; for example, Flamengo, one of Brazil’s top earners, generates approximately 12% of its revenue from matchdays, while elite European clubs like Manchester United or Barcelona derive upwards of 20% or more, largely due to economic disparities.

Brazilian clubs have massive fan bases but struggle to effectively monetise them compared to European clubs with advanced digital engagement strategies and diversified income streams. The FIFA agent adamantly believed, “The Brazilian league has the economic and footballing potential to consolidate itself in the world’s top five.” Both our sources agreed that growth potential lies in leveraging this large, passionate fan base and increasing international revenues through enhanced governance, better debt management and commercial expansion.

One source of significant income that Brazilian clubs continue to generate is through player transfers, with over EUR 1.7 billion earned between the 2018/19 and 2023/24 seasons. “One of the main sources of income for SAFs will be the sale of footballers abroad in a favourable scenario in which the local currency is sustainably devalued (BRL 1 real – EUR 6.33).” The independent senior business consultant expanded, “There are two large emerging markets: the United States and Saudi Arabia, and Brazil continues to export many footballers to markets such as Japan.”

Clubs increasingly leverage long-term contracts and sell-on clauses to benefit from future transfers, exemplified by Athletico Paranaense’s strategy (a club based in Curitiba, Brazil, that has built a strong reputation in recent years for its strategic approach to football and business). “The clubs controlled by a SAF in Brazil should try to attract promising players from South American countries because the Brazilian league, which is the most competitive in the Southern Cone, is very suitable for giving visibility and appreciating the economic value of these footballers,” advised the FIFA agent.

Additionally, the expanding global football market, including growing MLS, Saudi Pro League and Asia leagues, continues to bring demand for Brazilian players, ensuring ongoing opportunities. “In Brazil, there has been a significant increase in local interest in clubs and national and South American competitions.” But like anything, as the FIFA agent concluded, “Investors in football clubs need to create a favourable business scenario, supporting the sale of footballers when offers come from abroad.”