Banks and consultancy now compete for space in football

2021 was a difficult year for Sport. The team fell for the sixth time to the second division, thus losing 80% of its revenue in 2022. To the financial loss is added the troubled administrative life of the club, which even had a recent presidential resignation.

Even so, the management of the Pernambuco club promises for 2022 to bring the bills up to date, carry out a digital transformation and return to being among the great teams in the country.

For this, Sport aligns itself with a movement that has attracted large consultancies and even investment banks, which have come to see football as a business opportunity.

This scenario is related to the approval of the Sociedade Anônima do Futebol (SAF), which allowed clubs to have external investors playing their football area.

One of these investors is BTG Pactual, which in 2021 created the joint venture Win The Game with businessman Claudio Pracownik, an executive with stints at several banks (including BTG itself) and former vice president of finance at Flamengo.

The company signed contracts with Sport and Fortaleza to carry out marketing, digital transformation, governance and restructuring projects.

“We do not intend to become a SAF now, but we want to have everything ready in case a good opportunity arises”, says Eleuberto Martorelli, Sport’s vice president of finance.

Pracownik sees this as the biggest business opportunity for football in the short and medium term. “We will use data and artificial intelligence to create greater value for the club and its sponsors.”

Survival

Although the creation of SAF (and the investments already confirmed in Cruzeiro, Botafogo and Vasco) has moved the market, for Pracownik, a specialist in the sector, the best option now is to tidy up the house with a view to better investments in the future.

“It’s as if you were going to sell a car: if you change the tires and do a review, you’ll probably get a higher price,” says Pedro Daniel, a partner at EY consultancy.

EY, which will work with Win The Game in the management of the Sport, acted in the restructuring of Flamengo, Palmeiras and Atlético-MG, teams among the biggest winners in recent years and identified as the most organized off the field, which can be seen in the numbers.

According to Sports Value consultancy, Flamengo, Palmeiras and Atlético-MG are worth R$2.7 billion, R$2.3 billion and R$1.9 billion, respectively.

“Today, clubs feel the need to increase efficiency and conversations with them have become more natural,” says EY’s Daniel.

This scenario attracted one of the most important consultancies in the business restructuring business, Alvarez & Marsal, which in 2021 hired the executive Fred Luz, who was once CEO of Flamengo. Since then, the company has worked with Cruzeiro, Coritiba and Figueirense.

The performance is mainly in financial management and debt restructuring. “We enter with clubs as we enter with companies. Basically, what Brazil needs in football is restructuring”, says Luz.

In the view of experts, doing their homework, clubs can enjoy a great time for investments. According to Guilherme Ávila, partner in the sports area at XP Investimentos, today there are many more investors looking for clubs than the other way around.

Therefore, XP wants to act as financial advisor, connecting one end to the other, as it did with Cruzeiro and Botafogo (sold to American businessman John Textor).

For Ávila, the success of these clubs will be fundamental for the growth of the market. “Supply and demand will be balanced when the first signs appear that the SAF is doing well and bearing fruit”, says Ávila.