Palmeiras v Flamengo: all-Brazilian final highlights financial power | OneFootball

A Brazilian club will win the Copa Libertadores for the seventh consecutive year, with Palmeiras and Flamengo facing off in this Saturday’s final in Lima. The country of Pelé is asserting its economic strength, unmatched in the rest of South America, but faces a threat: the growing debts in the Brasileirão.

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Brazilian teams broke records last year with combined revenues of around 1.9 billion dollars, an increase of 10.2% compared to 2023, according to the annual Convocados report by investment firm Galapagos Capital.

“There are fewer and fewer ‘Davids’ beating ‘Goliaths’,” Cristiano Caús, a sports law specialist, told AFP, highlighting the growing financial disparities in today’s football as a “decisive factor.”

The same is happening in Europe, Caús notes, with the dominance of teams like Paris Saint-Germain in France.

With its 213 million inhabitants as a driving force, Brazil has a GDP more than three times that of Argentina, a country traditionally dominant in the main club tournament of the Americas.

However, the accumulated debts of Brazilian clubs surpassed 2.7 billion dollars in 2024, according to the Convocados report.

“Many operate at the limit,” the document warns.

After winning the Brasileirão and the Libertadores last season, Botafogo is facing difficulties due to the Lyon crisis within the multinational club group it belongs to, Eagle; in addition, scandals involving management irregularities have hit institutions like Corinthians.

Sailing in luxury

“There are clubs in Brazil with European-level economic power,” highlights Flamengo coach Filipe Luís.

“We have players here who received higher offers from European clubs and the club managed to match them,” he adds.

Thus, the market value of the squads of Palmeiras and Flamengo is the highest in the Americas: 247.3 and 227.9 million dollars, respectively, according to the specialized portal Transfermarkt.

The 12 most valuable squads in South America are Brazilian.

Capital raising

A 2021 law that allowed Brazilian clubs to become Football Corporations (SAF) “was a milestone” by “opening football to investors,” Guilherme Bellintani, former president of Bahia, a club that adopted this model, told AFP.

Palmeiras and Flamengo remain traditional clubs (non-profit associations), but the legislation gives more flexibility to raise capital.

And the gigantic Brazilian market carries weight.

TV rights for the Brasileirão exceed 600 million dollars, five times more than those of the Argentine league.

Betting company Betano, in turn, pays Flamengo 46 million dollars per year as the main shirt sponsor, and 6.5 million annually, for the same space, to River Plate.

“Argentina has only one path left: either make it easier for investors to enter or we will continue to see what has already happened at the Club World Cup,” Caús assessed.

The four Brazilian clubs advanced to the round of 16 of that tournament; two reached the quarterfinals and one the semifinals. The two Argentine clubs were eliminated in the initial phase.

Youth categories

Brazil is also the main exporter of talent to Europe, another variable in this equation.

Brazilian clubs sold 3,020 players to European clubs between 2020 and 2024, according to the International Centre for Sports Studies. Argentina is the third largest exporter, but far behind, with 2,171.

“Selling four or five players allowed us to stabilize financially this year,” said Palmeiras coach Abel Ferreira, citing transfers such as Estêvão to Chelsea.

All this makes Brazil attractive to multinational club groups: Botafogo belongs to Eagle, Bragantino to Red Bull, and Bahia to the City Football Group, of Manchester City.

This “brings in foreign money” and, more importantly, “technology,” highlights Bellintani, who led Bahia’s negotiations with City.

The model, however, has vulnerabilities if the main club of the multinational faces problems, as shown by Botafogo’s situation.

Iceberg

In light of warnings about debts, the Brazilian Football Confederation (CBF) is presenting this Wednesday a Financial Fair Play model to monitor club spending.

“The ship has hit an iceberg,” says Ricardo Gluck Paul, CBF vice president, comparing the powerful Brasileirão to the Titanic.

The project, Bellintani bets, “will be transformative.”

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