Marcos Motta (Brazil) Zurich - 7 November 2011
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Population (2010): 185,712,713 people Estimated no. of football fans: 100 million Gross Domestic Product (GDP) in 2010:
US$2,087,889,553,822 49mi people have entered the middle
and upper classes since 2003 Projections made by the government
show that the economy of Brazil shall have 5% growth per year until 2014
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-5%
0%
5%
10%
2006 2007 2008 2009 2010
4%
6.10%
5.20%
-0.60%
7.50%
Evolution of Brazilian
Economy
Brazil USA EU
Brazilian football clubs total revenue increased 34,4% during the last year and 300% in the last 8 years.
Great impact of TV Rights and new features of advertising and sponsorship
Reduction of revenues generated by the transfers for the third consecutive year
Tickets;
12% Social and
Amateur;
14%
Sponsorship
and
Advertising;
17% Other; 14%
Transfers;
15%
TV Rights;
28%
Percentage of Revenue Sources
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2003 2004 2005 2006 2007 2008 2009 2010
235.6 278.3 436.4 447.9
613.6 652.7 701.6
942.8
Total Revenues – in million Euros
Corinthians (25.8 million supporters): 80% increase from 2007 until 2010
Internacional (4.8 million supporters): 47% increase from 2007 until 2010
São Paulo (16.8 million supporters): 18% increase from 2007 until 2010
Flamengo (33.2 million supporters): 64% increase from 2007 until 2010
Santos (5.2 million supporters): 151% increase from 2007 until 2010
0 20 40 60 80 100
Santos F.C
C.R. Flamengo
São Paulo F.C.
S.C. Internacional
S.C. Corinthians
20
33.7
71.5
58.7
50.7
50.2
55.3
84.3
86.5
91.6
Total Income – in million Euros
2010 2007
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Clubs sponsorship revenues increased
24% from 2008 until 2009 and 371% in
these 7 years, followed by the growth of
the clubs’ value
CLUB 2009 VAR. % 2011
S.C. Corinthians 225 68% 377.7
C.R. Flamengo 226 33% 300.4
São Paulo F.C. 221 31% 289.3
S.C. Internacional 92 31% 121
Santos F.C. 54 84% 99.3
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0
20
40
60
80
100
2003 2004 2005 2006 2007 2008 2009
20.8 30.6
60.9 71.6 73.8
79.3
98.1
Evolution of Sponsorship
Revenues – in million Euros
Value of the clubs – in million Euros
Flamengo was the biggest pay-per-view seller in 2008 and in 2009, with 13.8% and 12.6% of the total sold respectively, followed by Corinthians (9.7% and 11.8%)
It is reported that as of 2012, Flamengo may receive €43mi as TV Rights
Clube dos 13 | collective agreement.
CLUB 2008 VAR. % 2010
1 S.C. Corinthians €9.7 144% €23.7
2 São Paulo F.C. €11.6 83% €21.2
3 C.R. Flamengo €11.9 59% €19.1
4 S.E. Palmeiras €13 43% €18.6
5 S.C. Internacional €9.3 70% €15.8
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Major TV Rights Revenues in 2010
(million Euros)
In 2010, 71% of CBF revenues
was generated by sponsorship
agreements and 14% by Seleção
matches.
In 1994, a Seleção friendly match
worth US$200,000, while in 2010 it
amounts app. US$2.5mi;
From 2006 until 2010, CBF
sponsorship revenues increased
320%, while the total revenues raised
218%, with a total profit amounting
€35.7mi.
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-30
0
30
60
90
120
2006 2007 2008 2009 2010
19.8 24.5
39.5
60
83.3
36.7 45.1
57.6
84.5
116.8
-8.1
3.9 12
26.3 35.7
CBF Revenues – in million Euros
Sponsorship Revenues Total Revenues Profit/Loss
In four years, 183% increase in revenues generated by sponsorship and advertising and 169% in revenues generated by TV Rights
Club centenary
New marketing strategies
Ronaldo signing in 2009
Result: Corinthians' jersey revenue is currently the fifth largest in the world, behind Barcelona, Manchester United, Liverpool and Real Madrid.
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Sponsorship and
Advertising
TV Rights
7.2 8.8 9.3 9.7 13.7 14.7
20.4 23.7
Corinthians Revenues – in
million Euros
2007 2008 2009 2010
1-4) Hypermarcas: €16,700,000 for 2
years of contract (2010/2011)
€11,400,000 for Neo-Química
Genéricos
€4,100,000 for Bozzano, Assim and
Avanço
€1,200,000 for other advertising
campaigns
5) FISK: €3,000,000 for 8 months
contract (2011)
6) Nike: €6,700,000 per year in a 5-
year deal (2009/2014)
Total Per Year: €18,250,000 www.rbmf.com.br
In the last years, some of the most important Brazilian starlets returned to Brasileirão: Ronaldo, Ronaldinho, Roberto Carlos, Robinho, Rivaldo, Deco, Scolari, Luis Fabiano, Adriano, Fred and Elano;
In 2011, only 23 players were transferred from the 1st Division of Brazilian National Championship to foreign clubs (45 | 2010, 46 | 2009, 52 | 2008, 64 | 2007, 50 | 2006, 58 | 2005 and 65 | 2004);
Differently from previous years, in 2011 none of the main young starlets left Brazil, such as
Neymar, Paulo Henrique Ganso, Lucas, Leandro Damião and Dedé;
Club’s acquisition spending shot up 63% to US$79m in 2010, while in Europe decreased 29%.
Reasons: raise of salaries, proper exploitation of players’ image rights, new sponsorship and advertising strategies/agreements, increase of TV rights and the participation of investment funds in players rights.
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2009: Debut as a professional footballer in Santos F.C.
Remuneration: €169,000 p/a
Contract Length: 2013
2010: São Paulo State Championship and Brazilian Cup winner. Debut as an
International Player for Brazilian National Squad
Remuneration: €415,000 p/a
Contract Length: until December 2015
2011: Libertadores Cup and São Paulo State Championship winner for Santos F.C.
Remuneration: €847,000 p/a as salaries + €4.170m p/a as image rights (70% of any image rights agreement entered by Santos F.C.) = approximately €5mi p/a
Contract Length: until December 2015
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Age/Year 19 years old / 2011 21 years old / 2003 21 years old / 2004
Salary €5m p/a (total rem) €452,000 p/a €910,000 p/a
Transfer Fee €45,000,000 €8,500,000 €24,000,000
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Remuneration in Flamengo: €5mi p/a (75% paid by Vent. Cap. and 25% paid by Flamengo) + 50% of any sponsorship agreement entered by Flamengo over the amount €12,5mi (minimum sponsorship revenue exclusively guaranteed to Flamengo);
In 2010, two sponsorship agreements guaranteed around €12,5mi to Flamengo. When signing Ronaldinho, Flamengo expectations was to double such amount of sponsorship revenue;
Any amounts that exceeding €12,5mi shall be divided in the following proportion: 50% to Ronaldinho, 30% to Vent. Cap. and 20% to Flamengo.
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Venture Cap.
Best Scenario
Annual remuneration of
€5,000,000 + 50% of the
exceeding sponsorship
revenues (about €6,250,000
according to Flamengo
projections)
Increases the sponsorship
revenues, amount sufficient
to pay the player’s salary +
increase in the ticketing,
merchandising, sporting
gains and global brand
Invests €3,750,000 annually
as salaries and receives 30%
of the exceeding
sponsorship revenues
Worst Scenario €5,000,000 per year as
remuneration
Increase in the ticketing,
merchandising, and global
headlines
Invests €3,750,000 annually
as remuneration
Booming national economy;
Stronger currency;
2014 FIFA World Cup and 2016 Olympic Games in Rio de Janeiro;
The influence of the investment funds (2009-2011);
New middle and upper classes | Rising living standards | more money to spend;
Corporate model for clubs | more professional and long term approach;
New TV deal worth USD550m per year (2012-2015).
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