FIP under scrutiny: Casares may alter project to gain support | OneFootball

The investment fund project (FIP) conceived by São Paulo with Galápagos remains without a date to be voted on by the Deliberative Council. The proposal, which foresees an investment of 250 million reais — with two hundred million for Cotia and fifty million to reduce debts — faces strong internal resistance, even among council members allied with the current administration. The model guarantees the investor 30% of the financial results from the base, without direct participation in the economic rights of the athletes.

The issue lies in the buyback conditions. Galápagos would have 30% of the profit until São Paulo buys back its share, which could only occur from the tenth year, in five-year windows. If the investor wishes to sell, the club will be obliged to repurchase at a value adjusted by 14% per year, in dollars — yes, the club will be forced to sell, a detail that was not disclosed in the initial announcements.

The percentage itself is already considered good for Galápagos, but the conversion tends to make the deal even better. If São Paulo decides to buy without Galápagos' desire to sell, the interest rises to 25% annually, also with currency conversion, which is indeed an extremely attractive percentage for investors, even if it were not in dollars.

The risk for the club, according to internal evaluations, is that the liability could reach billions, as only the net revenue from the base would serve for amortization. Even in conservative scenarios, based on athlete sales in recent years, the amount to be paid could reach hundreds of millions of reais, prohibitive even if the club were in a much better financial situation than the current one. Within Morumbi, there is even speculation about creating a SAF to make the payment feasible. As far as is known, this hypothesis would not be part of the contract being discussed, but it is plausible to imagine that this could occur.

The rejection it has encountered in the Council has led President Júlio Casares to hold off on setting a date for the vote in the Council while trying to convince the most resistant members. However, this task has been quite difficult, to the point that several media outlets have already reported that the football director himself, Carlos Belmonte Sobrinho, would be against the proposal, as well as some other significant names from the administration, though not all.

Thus, Casares would have already decided to make changes to the project, according to the ‘Blog do São Paulo’. These changes, however, have not yet been outlined, and it is not even clear if they would indeed alter anything in the buyback process. In practice, the current design practically eliminates risks for Galápagos and transfers almost all of them to São Paulo, which helps explain the difficulty Casares has had in bringing the topic to a vote.

The fund began to be designed in 2023 and was structured after consultations with 58 potential investors, with three offers being rejected before Galápagos' was accepted. The technical and sports control of Cotia would remain with São Paulo, and the partnership with Galápagos would be divided into 70% for Tricolor and 30% for the investor.

Among the announced objectives are increasing the number of athletes in all youth categories (from about three hundred to more than seven hundred, although it has not been disclosed how they will be used, given the few annual games in each category), improving the infrastructure of CFA Laudo Natel in Cotia, and expanding the scouting network both in Brazil and other countries.

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