I have often spoken about the emerging countries and the effect of their growth on the rest of the world economies. Now it is time to talk about its effect on the important stuff?football. You?ll indulge me, there is a real business point in here…… somewhere! And I am old enough to still be nostalgic for Pele, Garrincha, Rivelino, Zico, Socrates …. Ahhhhhh……
Until recently, talented Brazilian footballers have been spotted and bought by European teams, earning high salaries and playing in top leagues. A successful football career that was not possible in Brazil due to mismanaged clubs, lack of money and lower standards of competition.
This, however, is changing, at least in the short term.
With the economic growth in Brazil, the relative strength of the real and hosting of the World Cup in 2014 has come a big turnaround. Football clubs are now beginning to be run like European clubs ? like a corporate business. Senior executives are experienced and are now following long term plans. There is a huge increase in money and sponsorship and the standard of leagues is improving.
In contrast to the earlier years, Brazilian clubs are becoming less reluctant to sell their players for huge amounts to gain revenue. They are also spending more on buying players. According to Prime Time Sport:
?Spending on new players in Brazil rose 63 per cent in 2010 against a year earlier?and the total number of players exported from Brazil fell 14 per cent in 2009?
Another important factor is the players themselves. Previously, if a Brazilian player was given the opportunity to play in the European leagues it was a no-brainer. This is no longer the case. Brazilian clubs are now in a position to pay rivalling salaries to keep strong players and strong leagues. It will be interesting to see what happens with the new stars Neymar and Lucas (the Sao Paulo version)
More senior players, such as Ronaldinho, Luis Fabiano and Fred are returning back to Brazil earlier than expected knowing they can earn a competitive salary playing good football rather than struggling to compete for a place on a European team. According to the PPFO, 135 players returned to Brazil in 2010 to play there ? the highest figure yet.
So what does this all mean?
It really depends on the continued strength of the real against the Euro and Sterling. With many expert observers considering it to be significantly overvalued will it retain this strength? Tevez?s package for a return to Corinthians was predicated in no small part to relative strengths of the currencies and economies as much as his desire to be close to his family in Argentina.
Undoubtedly their economy will continue to grow. The staying power of the currency remains to be proven. And undoubtedly the game in Brazil still has its; how do we say ; ?structural? problems. Europe still hold the whip hand, but the next 5-10 years will be interesting.
Financial Times, Strong real lures Brazil soccer stars home, July 2010