The rise of professionalism in Brazilian football: A global transfer market game-changer?

• Brazilian clubs have sold players overseas for a collective €1.6 billion across the last seven seasons – with teams in Spain’s LALIGA accounting for nearly a fifth of that amount.
• The decision in 2021 to move Brazil’s clubs away from the non-profit model has encouraged outside investment and will reshape how clubs operate, including in transfer dealings.
• Why it matters: The arrival of new capital – and a hope - for growth in television revenues – could see Brazilian clubs able to take stronger bargaining positions when selling players overseas.
• The perspective: English Premier League clubs have historically been ‘second-hand’ buyers of Brazilian players, but recent trends suggest they may be more inclined to buy direct, which could prove problematic for clubs in Portugal.

By Chris Weatherspoon

For so long, the off-field structure reflected the on-field flair. Laidback, carefree, unconcerned with complicating a beautiful game or injecting it with too much sobriety. Brazilian football has long been the vestige of flair personified, the product of street football and samba. Off the field, clubs were not-for-profits, resisting the rush to corporatism that the rest of the footballing world had charged headlong into.

No longer. In August 2021, authorities passed a law allowing clubs to be set up as limited-liability companies (SAFs, to use the national parlance). A nation unconcerned with profitability and the business of football was now ripe for picking; clubs were now a little less community institutes, a little more commodities to be traded.

Outside investment swiftly followed. Six clubs were taken over within the first two years following the ruling, four of them by parties from foreign lands. Deal values have ranged from the €62 million a certain Ronaldo (the original one) dispensed with for a 90 per cent stake in boyhood club Cruzeiro Esporte Clube - SAF , to the €295 million John Textor and multi-club organisation (MCO) Eagles Football put down for an equal size stake in Botafogo de Futebol e Regatas in March 2022.

Reliant on Brazil

Analysis of the law change has focused primarily on these arrivals. Yet the most consequential result of Brazilian football’s brave new world might instead be seen in those going the other way. Clubs’ business-minded turn could have significant ramifications on not only their own transfer dealings, but the worldwide transfer market too.

In FIFA’s recently released 2023 version of their annual Global Transfer Report, the game’s governing body disclosed that 1,217 players moved from Brazilian clubs to foreign associations, the highest number in world football. Last year was the fourth year in the last six that Brazil has topped such a ranking; in the other two, Brazil was second.

That underlines the importance of Brazilian clubs to the global transfer economy, with some foreign clubs and associations especially reliant on Brazil for talent.

For nine consecutive years, the same FIFA report has disclosed that the most frequent route for players moving overseas in world football stretches from Brazil to Portugal. In 2023, the number leaving the eastern tip of South America for the south-west edge of Europe hit 414, a record high.

Given the lack of language barrier between the two nations, such transfer flows make sense; movements in the opposite direction usually rank high on FIFA’s list too. Yet it’s quite stark that while players moving from Brazil to Portugal consistently rank highest in terms of volume, the fees Brazilian clubs receive for such large numbers of outgoing players are miniscule. In 2023, Brazilian clubs received just €6.3 million from Portuguese clubs for those 414 players.

Benfica and Porto are frontrunners

That is reflective of a couple of things. For one, a lot of players move without a fee exchanging hands. More tellingly, it highlights the relative dearth of money available at Portuguese clubs, outside of those high-profile sides who repeatedly qualify for European competition. Of the €147 million spent by Portuguese teams on buying players from Brazil since 2017/18, per Off The Pitch’s transfer database, €123 million (84 per cent) was by the hand of just two clubs, Sport Lisboa e Benfica and FC Porto .

More broadly, dating back to the start of the 2017/18 season, we identified 314 instances of clubs in Brazil’s top two tiers selling players to overseas buyers for fees, with transfer receipts totalling €1.645 billion.

The importance of transfer income to Brazilian club revenues shouldn’t be understated. A report by consultancy EY covering the period 2013-22 highlighted that transfer fees have comprised clubs’ second largest revenue stream since 2016, usually making up at least a fifth of clubs’ collective annual revenues.

Broadcast income has long been the largest revenue stream, but its dominance is far less pronounced in Brazil than elsewhere in world football, where booming television income has fuelled growth (and costs). But that looks set to change, with the expectation that Brazilian clubs will soon move to negotiating for their television rights collectively rather than individually. In doing so, the logic goes, television revenues should increase.

If they do, combined with wealthy investment from abroad, the need for clubs to sell their players could lessen. That would drive up costs, impacting those who’ve historically plundered the Brazilian leagues for talent.

LaLiga spending big

Portuguese clubs acquire the most players by volume, but it is in neighbouring Spain where the biggest transfer fees have been generated for Brazilian players. Of the €1.645 billion received in overseas transfer fees by Brazilian clubs in the last seven years, €296 million, or nearly a fifth of the total, has been spent by clubs in Spain’s LaLiga. The next most valuable buyer – France’s Ligue 1 – is over €100 million behind.

Correspondingly, Spanish giants Real Madrid C.F. and FC Barcelona top the listing by club, spending €120 million and €107 million on players from Brazil respectively. Of the top seven Brazilian overseas transfers since 2017, six went to LaLiga and five of them – Vinicius Junior, Rodrygo (both €45 million), Vitor Roque (€40 million), Arthur (€31 million) and Reinier (€30 million) – signed for those two clubs.

Notable too is the age profile of those players signed by LaLiga clubs: all of those listed, and Renan Lodi, signed for €21 million by Club Atlético de Madrid in 2019, were aged 21 or under when making their moves. Able to offer (much) greater salaries to young players, and transfer fees that mightn’t be sufficient in other markets but are more than acceptable to Brazilian clubs, Spanish and European clubs have long been able to mine Brazil for talent.

One perhaps surprising aspect is that English Premier League clubs rank only third when sorting the list of buyers by league. English clubs, fuelled by the EPL’s mammoth TV deals, routinely come out on top of transfer purchase-related analyses, but EPL clubs have collectively spent just €172 million on buying players from Brazil in the timespan assessed.

What’s more, strip out the last two seasons and that number falls to €54m. Between 2017 and 2022, EPL clubs were only the seventh-highest spenders on Brazilian talent when ranked by division. One reason for that is the age at which clubs are buying players from Brazil; EPL clubs tend to want players that are ready-made for their first-teams and are less willing than clubs in other leagues to take a chance on youngsters who may take longer to develop.

Activity from Chelsea

Activity in the last two seasons suggests a shift. Part of that has been driven by Chelsea Football Club who, since their takeover in May 2022, have focused on stocking their squad with youth. The Blues have since raided Santos and Vasco da Gama for three 18-year-olds – Deivid Washington, Angelo and Andrey Santos – for a combined €44 million.

Meanwhile Crystal Palace Football Club spent €20 million on Clube de Regatas do Flamengo ’s Matheus Franca last summer, the joint-highest fee an English club has spent on a player from Brazil since 2017. Palace are part-owned by Textor, so there’s plenty likelihood that the opening up of Brazilian clubs to outside investment is alerting owners of MCOs to a market that their other clubs may traditionally have ignored.

In that sense, the move away from non-profit status may actually increase the number of Brazilians departing homeland clubs for fees. The key difference might come in terms of where they wind up moving to; where once Portuguese clubs acquired players for a relative snip, now they may find themselves barged out of the way by wealthier competition.

Much will probably depend on whether the injection of outside capital and hoped-for increase in TV money raises not only the profile of Série A but the strength of Brazil’s top tier as well. Opta’s Power Rankings, an exercise which seeks to list world football’s teams and divisions according to their respective strength, deemed Série A the 10th-strongest division in the sport last summer.

That made Brazil’s premier domestic competition the highest-ranked league outside of Europe, but still pitted it behind the likes of the Belgian Pro League and the Swiss Super League. One of the likely reasons English clubs have historically steered clear of buying Brazilian is because they can already afford to buy players from clubs competing at a higher level.

Without a stronger domestic league, it will remain difficult for Brazil’s clubs to convince their best players to stay, or to convince foreign buyers their worth is greater than it may have been in the past. Evidence of recent years suggests Brazilian clubs have routinely missed out on reaping the full value of their stars, and it’s again the activity of English clubs which highlights the point.

Chunky profits on Antony and Richarlison

Take former Sao Paolo winger Antony. Signed as a 20-year-old by Ajax of the Dutch Eredivisie in 2020 for €16 million, within two years he was on the move again, this time to Manchester United for an enormous €95 million.

Sao Paolo earned a more than respectable 20 per cent cut of Ajax’s profit via a sell-on clause, but the total fee still wound up being around a third as much as if they’d been able to sell Antony to Manchester United ited directly.

His is not an isolated incident. Richarlison moved from Fluminense to then-EPL club Watford in 2017 for €12.4 million. A year later, Watford sold him to Everton for around €40 million, more than three times what they paid. Four years after that, Everton made their own chunky profit on the forward, generating a €58 million fee in his sale to Tottenham Hotspur, nearly five times what original club Fluminese got for him.

Even in the small timeframe considered here, there are repeated examples of players going on to sign for clubs, usually English ones, for much higher fees than their Brazilian teams were able to garner for them.

The caveat is if the recent trend of English clubs dipping their toes in the Brazilian market directly continues. If it does, it’s likely to be a boon for Série A sides. In that instance, the losers will be those less wealthy European clubs who’ve previously been able to acquire exciting talent for less than if they were buying from their own continent.

Further evidence for the likelihood of this scenario comes not from England but across the water. Paris Saint-Germain , France’s outlier as one of the world’s wealthiest clubs, spent €40 million on the signatures of Gabriel Moscado and Lucas Beraldo from Palmeiras and Corinthians just last month, suggesting they too have recognised the Brazilian market as previously untapped – and are perhaps worried other wealthy clubs will enjoy the spoils if they don’t make their own moves.

Brazilian football’s shift to greater professionalism has opened a new frontier, one which could have worldwide ramifications. The influx of new capital alongside an improved TV deal should, in theory, strengthen clubs’ hands when selling their best players. Indeed, there’s already evidence deeper pocketed buyers are looking to move into the market. If that fuels a boom in Brazil’s homegrown sales, it will be the smaller European sides who inevitably lose out.

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