Arrived: Fluminense consider offer promising R$6.9 billion boost | OneFootball

On Monday evening, Fluminense received and presented the formal proposal for the establishment of its future Football Corporation (SAF) during a meeting of the Deliberative Council. The offer, coming from Lazuli Partners and LZ Sports, was detailed by partner Carlos de Barros, who explained the financial values and commitments.

The proposal includes the acquisition of 65% of the Tricolor's SAF. The main terms include an initial investment of R$ 500 million, to be injected in the first two years, and the complete absorption of the club's current debt, estimated at R$ 871 million.

In addition to the initial amounts, the contract mandates an additional investment of R$ 6.4 billion over a period of 10 years. For the clarity of the fans, the process, which will require voting among councilors and members, will be detailed below.

Structure of Fluminense's SAF:

The conception of the Tricolor's SAF foresees the participation of 40 high-net-worth investors, all declared Fluminense supporters. These shareholders were gathered by Lazuli Partners, a company specialized in investment management, through its subsidiary LZ Sports, directly responsible for formulating the proposal. Initially, the plan envisaged about 15 participants, but the interest of other Tricolores in recent weeks expanded the group to the current number.

If the proposal obtains the necessary approval from the councilors and the member base, the company will become the controlling shareholder of "Fluminense SAF." The club's original association will retain a minority stake, the proportion of which will be determined by the amount of debt at the time of acquisition. With the current debt of R$ 871 million, the fund would hold 65% of the shares, while the associative segment would keep the remaining 35%.

The scope of the SAF will include men's and women's football, youth categories (with the management of Xerém), and futsal. The headquarters at Laranjeiras and other real estate will remain under the association's domain, with an agreement established for the use of these facilities.

The entirety of Fluminense's financial obligations will be absorbed by the new entity. In return, the association will receive royalties from the investment, with an initial amount projected at R$ 12 million annually. This model differs from other SAFs established in Brazil, such as those of Cruzeiro and Botafogo, where management and control were assumed by a single entrepreneur.

Identity of the Acquirers and Governance Model:

Among the names of the 40 entrepreneurs, some have already been reported in the press, including André Esteves, controller of BTG Pactual; Thiago De Luca, general director of Frescatto; and José Zitelmann, co-founder of Absoluto Partners. However, there will not be a majority controlling investor. LZ Sports released the names of 13 groups and families of investors, among which are: Almeida Braga Family, Klabin Family, De Luca Family, Zitelmann Family, Esteves Family, Dantas Family, Paes Family, Ricardo Tadeu, Monteiro Aranha Family, Apex Partners Group, Heráclito de Brito Gomes Junior, Hallack Family, and Bruno Werneck.

To ensure smooth decision-making, all fund investors must adhere to a set of voting rules designed to avoid deadlocks in case of disagreement. The leadership of this fund will be under LZ Sports, represented by its partner Carlos de Barros.

The SAF's management board will consist of eight members, with two seats allocated to the association and the remaining six to the investors' representatives.

Investment Details in Football:

The global investment projection totals R$ 6.9 billion over a decade. The mandatory contributions are structured as follows: R$ 250 million at the time of signing the SAF agreement and another R$ 250 million within 24 months after the process is completed.

The additional investment of R$ 6.4 billion over the 10 years will be allocated as follows:

The fund's goal is to increase the Tricolor's football payroll by 30% by 2026, raising it from the current R$ 19 million to approximately R$ 25 million per month. The management sought inspiration from Premier League club models to adapt the planning to the Brazilian football scenario.

Carlos de Barros stated that the vision is to position Fluminense among the top three clubs in the country, based on five essential pillars: investment in Xerém, payroll, athlete recruitment, improvement of data analysis, and long-term financial sustainability. The composition of resources for these investments will include revenues generated that will transition from the association to the SAF, direct contributions from investors, raising of subsidies, investments in assets (such as the training center and Xerém), improvement of data analysis, debt payments, and payments to third parties.

The investors condition the completion of the acquisition on prior renegotiation with creditors, aiming for the new management to start its activities with debts already settled and a defined monthly payment plan.

Mário Bittencourt in Executive Leadership?

There is still no contractual definition for the position of CEO of the SAF. Carlos de Barros, partner of LZ Sports, expressed a favorable view of keeping Mário Bittencourt in the position, although there is no formal clause or agreement. The fund's preference lies in the positive evaluation of the club's reconstruction work carried out by the current president between 2019 and 2025.

Safeguard Against Resale:

The group of entrepreneurs forming LZ Sports conceives the acquisition of Fluminense's SAF as a long-term venture, devoid of a focus on immediate profit. In line with this vision, the distribution of any dividends to shareholders is conditioned on the full compliance with the mandatory investment of R$ 6.4 billion.

Additionally, the contract includes a five-year lockup clause, prohibiting the resale of shares during this period. This term exceeds the market standard, which generally extends up to three years, demonstrating the group's commitment to permanence.

Voting Schedule:

The investors express no rush for the process's completion. The club members' vote will only occur after the presidential elections, scheduled for the period between the second half of November and the first of December this year.

The transition to the SAF format, however, will depend on the approval of the membership. The estimate is that the completion of all process stages, if the necessary consent is obtained, will be finalized between December and February.

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