Analysis: Why Brazil dominates South American soccer; the multimillion-dollar gap
RIO DE JANEIRO, BRAZIL – As soon as they conquered the Argentine Cup, Boca Junior’s players posed euphorically with a giant picture of the check that the club received as a prize for the title: ARS 7,500,000 or US$38,000.
Just four days later, this Sunday, the final of the Brazilian Cup will be played, with the same format, between Atlético Mineiro and Atlético Paranaense, and the champion will win a prize of US$17.6 million.
Perhaps this comparison is one of the clearest examples of the sidereal distance that exists today between the soccer economies of both countries and explains an important part of the Brazilian dominance in international tournaments in recent years.
Already in 2020, for winning the previous edition of the Brazilian Cup, Palmeiras had taken R$67 million (US$12 million) and this year it was able to get another US$28.55 million for winning the Copa Libertadores by beating Flamengo in the final.
This top continental tournament represents less than twice what is paid as prize money for winning the Brazilian Cup, while what is paid in Argentina for the local Cup is about 750 times less than what Conmebol pays for winning the Copa Libertadores.
According to the specialized site Salary Sport, Boca Juniors, perhaps the best-known soccer club in Argentina, budgeted for squad salaries in 2021 ARS23.946 million (US$235,000) which means ARS460,500 (US$4,536) per week, so the prize for winning the Argentine Cup would represent just 8 percent of the weekly payment to the players.
In short, the check that the champion of the Brazilian Cup will receive will be 455 times more than the one that Boca received last Thursday in Santiago del Estero for winning a tournament of similar characteristics. But the difference is not only because of the amounts but also because of the permanent devaluation of the Argentine peso.
In 2019, for winning the Argentine Cup, River took ARS14.4 million, which was then equivalent to U$228,000, because the dollar was quoted at 63 pesos while now it is close to 200 at the unofficial “blue” rate.
For the current Brazilian Cup, the Brazilian Football Confederation (CBF) has structured three groups of teams to compete in the first and second rounds.
For the first round, each team in Group 1 received R$1.15 million (US$207,500), those in Group 2, R$990,000 (US$179,000), and those in Group 3, R$560,000 (US$102,000).
For the second round, those in Group 1 received R$1,350,000 (US$244,000), those in Group 2, R$1,070,000 (US$193,000) and those in Group 3, R$675,000 (US$122,000).
Those who advanced to the third round received R$1,700,000 (US$307,000). In the round of 16, the prize for each team was R$2,700,000 (US$488,000).
In the quarterfinals, R$3,450,000 (US$ 623,000), in the semifinals, R$7,300,000 (US$1.318 million), and the runner-up took home R$23,000,000 (US$4.152 million), all figures beyond the reach of Argentine soccer.
With these prizes, the champion will end up accumulating R$73.6 million, a little more than US$13 million.
If today the difference in the value of the two currencies, the Brazilian real and the Argentine peso, is enormous, other elements must be added to the comparison of the economies of both countries in the soccer field.
At the moment, the four income matrices in Brazilian clubs are very similar (membership fees, sponsorships, ticket sales, and TV rights) but each one of them has its own problems. Now a fifth and fundamental element must be added, namely the SAF (Sociedades Anónimas del Fútbol), whose enabling law has just been approved over the veto of President Jair Bolsonaro; already, for example, second-tier club Cruzeiro has everything underway to implement it.
The SAF (in Argentina there was an unsuccessful attempt to introduce it as SAD – Sociedad Anónima Deportiva) means the acceptance of private capital entering and controlling the management of soccer clubs.
The management of soccer as a business has its proponents – who extol the enormous amount of capital that can flow into a club – and its opponents, on the grounds that the debts that the various entities could incur could bankrupt them.
Today Brazilian clubs have a huge advantage over the rest of the continent because of all the players they have been able to import, many of them from Europe (such as David Luiz, Filipe Luis, Diego Alves, or Andreas Pereira for Flamengo, Hulk or Diego Costa for Atlético Mineiro), thanks to capital inflows from wealthy businessmen supporters such as Leila Pereira (Financiera Crefisa) at Palmeiras, Rubens Menin (the country’s 13th largest fortune) at Atlético Mineiro or Rodolfo Landim (oil businessman friend of Bolsonaro) at Flamengo.
It is also true that the total debt of Brazilian soccer has already climbed massively. The memory of cases such as when Parmalat abandoned Palmeiras, and the Berezovsky group abandoned Corinthians, leaving holes that led to institutional and sporting disasters, still hangs in the air.
With this flourishing economic situation, Brazilian clubs, absolute dominators of this year’s two continental cups and winners of the last three Libertadores Cups, not only have the luxury of importing players from Europe, but they also nourish themselves with the best players in South America.
For example, Atlético Mineiro, the newly crowned Brasileirão champions, have Chilean Eduardo Vargas and Argentinians Matías Zaracho (ex-Racing) and Ignacio Fernández (ex-River), while Palmeiras, the American champions, have Uruguayan Joaquín Piquerez, who replaced his compatriot Matías Viña, who was transferred to José Mourinho’s Roma.
One of the keys to acquiring international players, especially those coming from Europe, is to try to get them on a free pass because the salaries paid are very high, unattainable for Argentine clubs. It is usual for a player coming from the Old Continent to charge, for example, US$3.5 million a year.
If in the last two transfer markets 31 players arrived in Brazil from Europe and 17 from the five main leagues of that continent, 14 arrived in Argentine soccer, of which only two are from the elite tournaments.
According to the specialized site Transfermarkt, the value of all the players in the Brazilian league together is almost US$1.2 billion, while those in the Argentine tournament, which has six more teams than in the neighboring country, total US$922 million, and it must be taken into account that very little is paid there for transfers (which gives rise to this statistic) and much more is paid in salaries.
If the difference between Brazilian and Argentine clubs was already large in terms of new signings, it is even greater in terms of the sale of players. In this area, the last decade has widened the gap in the market value of players who emigrate to Europe.
Neymar went to Barcelona for EUR88 million, Real Madrid paid EUR45 million for Vinicius Junior and another EUR45 million for Rodrygo, and Milan, EUR38 million for Lucas Paquetá.
Not only are these figures hardly close to what Argentine clubs charge, but also, these stars are joining the top clubs in the top leagues.
In Argentine soccer, the highest sale in recent years was that of Lautaro Martínez to Inter Milan for EUR25 million, followed by Lucas Alario to Bayer Leverkusen for EUR24 million, while Borussia Dortmund paid EUR16 million for Leonardo Balerdi.
In addition, most Argentine players usually land first in second-tier European teams, or in peripheral leagues such as MLS, Russia, or Mexico.
Since the 2015/16 season, Flamengo already accumulated nearly EUR230 million from the sale and loan of players, which then allowed it to spend EUR129 million on signings.
The club with the best balance sheet on the continent is São Paulo, with EUR120 million since 2015, with EUR188 million in sales and loans and EUR68 million in signings, while Gremio or Santos exceed EUR100 million. In total, ten of the twenty teams participating in the Brasileirão – the top national league, equivalent to Italy’s Serie A or Spain’s La Liga, exceed EUR50 million.
The concept of managing clubs as if they were companies has become a fundamental issue.
In Argentina, the club with the best balance sheet of these times is River Plate, with EUR174 million in revenues and EUR92 million in the balance sheet, thanks to good sales such as those of Lucas Martínez Quarta or Exequiel Palacios.
Boca had close revenues, with EUR169 million but spent EUR92 million in player transfers, but the sales of Nahitán Nández and Darío Benedetto, two of its stars who emigrated to Europe, totaled EUR32 million, far from the figures of Brazilian clubs.
If Argentine soccer is far from Brazilian soccer, the situation is much more distant in the rest of the South American countries. Uruguay’s Penarol has a positive balance of EUR58 million in the same period and Atletico Nacional de Medellin (Colombia), EUR54 million.
For Transfermarkt, the Brasileirão national championship, with twenty teams around the country, has a market value of EUR1.005 billion compared with EUR810 million for the Argentine tournament, second in the ranking in South America. Third is the Colombian league with EUR253.42 million, fourth the Chilean with EUR162.78 million and then the Ecuadorian (EUR161.08 million) and the Paraguayan (EUR139.60 million).
In a study carried out on the South American leagues since the 2010/11 season, the Argentine league had a value, by that time, of EUR845.88 million, so its drop in a decade was 4.3 percent, while in the same period, the Brasileirao was worth EUR424.30 million, which implies a growth of 145.6 percent, surpassing even the percentage growth of the equivalent Spanish league in the same period (112.9).
This enormous gap that has been established between Brazilian and Argentine soccer over the last decade does not mean, however, that there are no difficulties in the structure of Brazil.
One of the main problems is the concentration of revenues in the most powerful clubs or those with greater resources. Already in 2018, between Palmeiras and Flamengo, 23 percent of revenues were concentrated, and since 2019, those two clubs shared the next three Copa Libertadores and faced each other in the recent final.
They are followed a little further behind by São Paulo and Corinthians. Flamengo and Corinthians receive the most money from TV rights.
Another incomparable income difference between Brazilians and Argentines comes from the Brasileirao, which pays prizes to 16 of the 20 participants and only the last four, who are relegated to Serie B, do not receive them, so until the tournament is defined, it is not known exactly how much everyone will receive.
Atlético Mineiro, as champion, has already secured the R$33 million (US$6 million), Flamengo, the runner-up, already knows it will receive R$31.3 million (US$5.6 million) and Palmeiras, third, R$29.7 million (US$5.361 million), while the last prize, for Juventude, in 16th place, will be R$11 million (US$2 million).
These figures seem a chimera for the participants in the Argentine First Division tournament, and it is easy to understand how it is possible for so many Brazilian teams to play an important role in the two continental tournaments and even surpass other more traditional teams from other countries.
If in all the mentioned areas the distances between the soccer economies of Brazil and Argentina are sidereal, in the sale of TV rights the situation becomes decisive.
According to what was stated at the time by the president of Argentinos Juniors, Cristian Malaspina, the agreement of the clubs with TV signed in 2017, was for US$100 million per year but as the contract update was made by the CPI, the amount became US$43 million.
In the case of the CBF agreement with Brazilian TV was signed in 2019 and until 2024 and per season, the teams receive US$275 million, triple what was charged in Argentina by much more competitive teams than at present. Already in 2019, Brazil’s Flamengo has received more money than all Argentine soccer together these days.
Brazilian clubs receive funds from TV rights in two ways, open TV and the Pay Per View system, which each one arranges on its own; that is what gives rise to huge inequalities.
As for free-to-air TV, Globo disburses annually one billion reais (US$180 million) to be distributed according to several situations. The champion ends up taking R$31.7 million (US$5.87 million), and the last one, R$4.6 million (US$851,000).
TV Globo and CBF established a distribution of 40% of the total amount equally among all Brasileirao participants, 30% for the awards according to the positions they occupy in the table, and the remaining 30% according to the number of matches that TV broadcasted throughout the season to each of the teams.
In the first year, the last four teams were not paid in the amount of 30% related to the positions in the table, but from then on a fixed minimum amount was established for them as well.
With information from Infobae
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