How Fluminense could land R$6.4 billion in SAF investment over 10 years | OneFootball

The proposal for the Sociedade Anônima do Futebol (SAF) for Fluminense, led by the Lazuli group, promises a minimum sports investment commitment of R$ 6.4 billion over a decade. In an interview with Victor Lessa, Carlos de Barros, the investors' representative, demystified how this amount will be applied and guaranteed, emphasizing that it is not just “new money,” but a robust financial engineering to elevate the club’s level.

A Minimum Floor for Sports Investment, Not a Single Contribution

Carlos de Barros stressed that the R$ 6.4 billion represents a minimum floor of investment in the football department over 10 years, and not a total and exclusive contribution from the investors. “It’s not all new money,” Barros clarified. The goal is to establish a guaranteed budget for football that combines various sources, ensuring ongoing competitiveness.

Sources of Funding: An Integrated Ecosystem

The significant amount will be composed of a combination of resources from different fronts, designing a financial ecosystem aimed at sustainability and growth:

Protection Mechanism: No Dividends Without Compliance

To ensure compliance with this investment floor, the proposal includes a contractual protection mechanism for the association: if the minimum annual investment is not met, there will be no distribution of dividends to investors. This clause aims to align the interests of investors with the club’s sporting objectives, ensuring that the main focus is the growth of football. “The investment commitment is a priority and contractually tied by the restriction on dividends,” Barros pointed out.

Flexibility and Annual Adjustment

The investment will not be a fixed amount of R$ 640 million per year. De Barros explained that the allocation is dynamic and flexible, varying according to the planning and sporting needs of each season. “The average would be R$ 640 million/year, but the allocation may vary by season (e.g., R$ 500 million in one year, R$ 700 million in another), according to sports planning,” he detailed. This adaptability allows SAF to respond to specific transfer windows, a more demanding Libertadores year, or urgent infrastructure projects.

Additionally, the R$ 6.4 billion amount already includes annual adjustment in its projections, which means that the purchasing power and the real value of the investment will be maintained over time.

Plan B to Guarantee the Investment: “Shareholder Cushion”

And what if operational revenues and prizes are not enough to reach the minimum floor in a given year? De Barros revealed a “shareholder cushion”: investors can increase their stake in SAF, from the initial 65% up to a limit of 90%, injecting more capital according to pre-defined terms. It is crucial that the association always maintains a minimum 10% stake in SAF. This flexibility ensures that the investment commitment does not depend exclusively on immediate success on the field, providing an extra layer of security.

Impact of Debt and Approval of the Annual Plan

The strategy for Fluminense’s debt, which foresees negotiations with creditors to anticipate settlements even before the closing of SAF, is complementary to this plan. The reduction of liabilities does not diminish the R$ 6.4 billion commitment; on the contrary, it improves SAF’s cash flow to fulfill this commitment, freeing up resources that would be allocated to interest for investment in football.

Each season will have a detailed investment plan, which will be approved by the SAF board, with the participation of the Fluminense association, and by the technical management of football. This governance model aims to ensure that investment decisions are strategic and aligned with the club’s interests.

In summary, the SAF proposal outlines a long-term commitment to Fluminense football, seeking to guarantee a flow of resources that combines the solidity of private capital with the club’s own generation capacity, all supported by contractual mechanisms that protect investment in the sport and the ambition for titles.

This article was translated into English by Artificial Intelligence. You can read the original version in 🇧🇷 here.