Brazilian Football Has Shot at Coronavirus Reboot

Ailing even before the pandemic, the national sport needs a new business model and compact with its fans.

Brazilians rightly pride their country on being a football powerhouse, but lately local aficionados of the Beautiful Game are keeping their eye on another Brazilian scorecard: the losing contest with coronavirus. Last week, Brazil overtook Spain, Italy, the United Kingdom and China, logging the second highest rate of infections of Covid-19 and the sixth highest death toll.

It was only a matter of time before the pall reached the pitch. “There’s football before coronavirus and after,” said Moisés Cohen, who presides over the medical committee advising the Sao Paulo football federation, representing some 60 clubs. “We are going to have to adapt safety protocols for a new reality.”

State championships were interrupted in March. The premier national tournament, the Brazilian Championship, has been postponed. Two pending Latin American championships, including the marquee Libertadores de America, where Brazil has seven qualifying teams, are in limbo. Not even ghost games — matches in empty stadiums — are in play.

Brazil is not alone. KPMG, a consultancy, recently estimated that the pandemic-induced paralysis will cost the big five European leagues around 4 billion euros in foregone revenue this year.

For a “country in cleats,” as Brazil fancies itself, the fallout could be even worse. But it could also speed a long-overdue shake-up in the sport, and give teams the chance to rethink their fraying compact with their fans, which threatens the game’s long-term health.

The financial toll of stadiums emptied by the pandemic is mounting. Cesar Grafietti, who runs a yearly check-up on football finances for Itaú BBA, projected that the top 20 clubs in Brazil will forfeit around 1.7 billion reais (around $300 milllion), or 35% of expected winnings this year. And that’s assuming that television sponsors, the clubs’ biggest cash source, don’t pull the plug.

Given that the disease has yet to peak, losses will grow. Don’t tell that to President Jair Bolsonaro, Latin America’s Covid-19 cowboy, who has touted hardy native DNA or a stiff dose of chloroquine as surefire remedies. Bolsonaro has exhorted the country’s clubs to let the games begin again: On May 19, he summoned the heads of two big Rio de Janeiro teams, Flamengo and Vasco da Gama, to a would-be kick-off luncheon in Brasilia. “They want to play again,” he said on the same day that Brazil logged a record 1,179 deaths from the novel coronavirus.

The view from the grass is less bullish. Consider Flamengo, which last year won the Libertadores Cup and was runner-up in the Club World Cup. Three Flamengo footballers tested positive for Covid-19 earlier this month along with three dozen other club staff and relatives. On May 4, the team’s longtime masseur died of complications from the disease. Nonetheless, club brass defied municipal safety recommendations by resuming practice sessions this week.

“This is one of the biggest crises the world has ever seen,” Vanderlei Luxemburgo, who coaches Palmeiras, one of Brazil’s biggest clubs, told me. “We can’t take football out of the bigger context and push to restart competition before it’s safe. Until the health ministry gives us the all clear, I don’t see a return to the playing field.”

Brazil also must assure its neighbors that their athletes will not be at risk competing in the region’s most afflicted nation. Recently, Paraguayan President Mario Abdo Benitez ordered a trench dug along a gateway stretch of the 700-kilometer land border with Brazil, which has been closed since mid-March. “Given the situation in Brazil, we can’t even think of reopening the border,” Benitez said.

What’s worse, the pandemic hit as Brazil’s biggest clubs were struggling with crushing debt, chaotic finances and unpaid wages. Years of dysfunctional management have left important teams on the edge of insolvency. That’s one reason Brazilian football has turned into a stud farm for international leagues, exporting 1,988 players last year, more than any other nation, and reaping 12.6% of global transfer fees. Selling talent abroad kicks in an increasing share of the Brazilian football purse: from 12% of revenues for the top 20 teams in 2014 to nearly 25% last year, Grafietti reckoned.  

The problem is, the world economic downturn from the outbreak has pierced the bubble in the athlete trade. “We’re no longer in a seller’s market,” said sports entertainment attorney Marcos Motta. “I don’t see any significant trades before September.”

Throw in wavering sponsors, who have delayed or slashed payments to some of the biggest clients (like Corinthians) during the sports lockdown, and disgruntled fans threatening to cancel club memberships, and football’s cash crunch is becoming dire.

Yet the health emergency may be just the kick in the shorts Brazil needs. Some analysts argue that an industry-wide shakeout is in the works. Senior players may see their careers cut short while decades-old clubs may fall into insignificance.

Now Brazilian football must adapt or languish. Sports managers and communications moguls ought to take advantage of the shutdown to rethink their pact with fans, the media and the market. The driving idea: Transform teams from playing machines into what Motta calls content hubs. “People keep asking, when are we going to play again. That’s a minor question,” said Motta, who also teaches sports and entertainment marketing. “This is not the time to sell players, but to use data and technology to work beyond the pitch, understand your market and build a direct relation with consumers. Brazilian football has a rich history, but that history has to be told and monetized. Either the clubs adapt with technology and digital intelligence or fall behind.”

Brazilian teams might take a cue from the U.S. National Basketball Association, which serves up worldwide subscribers a steady feed of player interviews, streamed documentaries and reprises of classic games. “Take Corinthians and Flamengo, clubs with huge fan bases,” said Juca Kfouri, a sports columnist for Folha de Sao Paulo. “Brazilian football has huge assets in their stars’ past and present they could leverage to keep their fans engaged.”

No one is suggesting that the roar from the couch can substitute for the roar of the crowd. Yet instead of a breakdown, the shutdown can bring renewal, forcing Brazil to reinvent its beloved and financially ailing sport while it’s still got game.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Mac Margolis at mmargolis14@bloomberg.net

To contact the editor responsible for this story:
James Gibney at jgibney5@bloomberg.net