Football corporations in Brazil (SAF): new perspectives for foreign investment in Brazilian football teams

Thursday 3 November 2022

Gustavo Flausino Coelho

Bastilho Coelho Advogados, Rio de Janeiro


Matheus Chagas Lamarca

Bastilho Coelho Advogados, Rio de Janeiro


Beyond a passion, football is a billion dollar industry that has massive attraction worldwide. According to a survey from Deloitte, the 20 largest football clubs generated a combined revenue of €8.2bn in the 2019/2020 seasons.[1] In Brazil, it is no different: football is part of Brazilian culture and is the sport that has the highest financial turnover in the country, representing about 0.72 per cent of the national GDP (or R$ 52.9bn).[2]

In its more than 150 years of existence, football has evolved as a sport and an industry. There was a time when the sale of a player for millions of dollars was unimaginable and the purchase of football clubs by private investors and companies was considered a disgrace by the supporters (especially in Latin America). However, with globalisation and new technologies bringing the world closer, the professionalisation of the sport and the integration of the football industry with the entertainment industry have become inevitable.

This article will briefly present the novelties from Law No. 14,193/2021 (‘SAF Law’), which allowed the professionalisation of Brazilian football clubs with the creation of ‘Sociedades Anônimas de Futebol’ or Football Corporations in Brazil.

The first Brazilian laws authorising the existence of teams as companies were the Zico Law (Law no. 8,672/1993) and the Pelé Law (Law no. 9,615/1998). However, these laws were heavily criticised and did not generate the effects expected by the legislator, and most Brazilian football clubs remained in the association format. This scenario led to strong political and economic crises in several Brazilian football clubs, with enormous debts and few prospects for growth.

This scenario changed recently with the sanction the SAF Law, which made it possible to transform football clubs, which were previously civil associations, into business corporations. The legislator expects the new law to create an environment of legal certainty for the football club, its creditors and investors, mainly by addressing aspects of governance, transparency, control in correlation with the Law 6.404/1976 (‘Brazilian Corporations Law’).

According to the SAF Law, the Football Corporations can be formed: (i) by the transformation of the civil association (‘original club’) to a Football Corporation; (ii) by a spin-off of the football department from the original club, with the transfer of its assets related to the football activity to the newly created Football Corporation; and (iii) by the initiative of individuals, legal entities or investment funds to incorporate a new Football Corporation.

In cases of transformation and splitting of the football department, the Football Corporation will take over the original club or legal entity regarding the bureaucracy with the sport administration entities, as well as the contractual relationships with professional football athletes. In addition, the Football Corporation will have the right to participate in championships, cups or tournaments in place of the original club or legal entity, under the same conditions in which they were at the time of succession.

The payment of capital stock of the Football Corporation may be performed by the original club or legal entity through the transfer of assets such as the name, brand, labels, symbols, properties, equity and fixed and mobilised assets. This includes registrations, licenses, athletes’ sports rights and their economic repercussions. It is important to mention that the transfer of rights and assets from the original club or legal entity to the Football Corporation does not require prior authorisation or consent from creditors or interested parties, including those of a public nature. However, the SAF Law provides for a revenue restriction of 20 per cent of the revenues of the Football Corporations for the payment of obligations incurred by the original club prior to its creation.

Still on the payment of creditors, it is worth mentioning one of the great novelties of the SAF Law: the creation of the Centralised Execution System. The new system allows the original clubs or legal entities to pay their obligations through creditors' concourse, without necessarily entering a judicial or extrajudicial reorganisation process. This new system will concentrate the executions, revenues and the amounts collected by the original club or legal entity in a centralised court. This is to enable the distribution of these amounts to the creditors in an orderly manner, ensuring greater legal certainty.

The raising of new funds for the football team may be performed through the issue of debentures, which will be called ‘debentures-fut’. The debentures-fut must have a term equal to or greater than two years and the funds raised must be allocated to the development of activities or the payment of expenses or debts related to the typical activities of the Football Corporation.

Regarding the aspects of corporate governance and combatting mismanagement of football executives, the SAF Law determines that the board of directors and the fiscal board must be bodies of mandatory existence on a permanent basis and must create specific rules on election, remuneration, dismissal and operation of such corporate bodies.

To ensure greater transparency in the team–investor relationship, the SAF Law has created a disclosure obligation for legal entities that hold an interest equal to or greater than 5 per cent of the capital stock of the Football Corporations. These entities must provide information on its Ultimate Beneficiary Owner to the Football Corporations and to the national sports administration entity, under penalty of suspension of political rights and withholding of dividends, interest on equity or other form of remuneration declared, until this duty is fulfilled.

Finally, it is worth mentioning the creation of the Football Specific Taxation Regime, which aims to simplify the collection of taxes for Football Corporations. According to Art. 31 of the SAF Law, the new taxation regime consists in the monthly collection of taxes and social contributions (eg, Corporate Income Tax, Social Contribution on Net Profit and social security contributions), through a single collection document. However, there is a discussion about the increase in the tax burden to be borne by the Football Corporations, compared to the current model of clubs, which are organised through civil associations and are exempt from tax collection in most cases.

The impacts of the SAF Law on the Brazilian football industry can already be seen in practice. Recently some of the biggest Brazilian football clubs that compete in the main national and international competitions have already taken the first steps with the transformation of their legal structure to the new model of Football Corporations.

In December 2021, Cruzeiro Esporte Clube, one of Brazil's major football clubs, received a financial contribution of R$400m from Tara Sports, a company controlled by former football player Ronaldo ‘Phenomenon’ Nazário, which is also the parent company of Spanish football club Real Valaldolid. In the transaction, Cruzeiro Esporte Clube committed to transfer up to 90 per cent of the shares of Cruzeiro Esporte Clube Football Corporation to Tara Sports and was the first operation to form a Football Corporation after the enactment of the SAF Law.

Another relevant transaction for the Brazilian football industry was the investment made in March 2022 by businessman John Textor in Botafogo de Futebol e Regatas, a traditional club based in Rio de Janeiro. The investor, who also owns a stake in the English club Crystal Palace, will invest about R$400m in exchange for 90 per cent of the shares issued by the Football Corporation created by Botafogo.

Therefore, with the enactment of the SAF Law, a wide range of options is now available for investors who wish to enter the Brazilian football market. Although there are doubts and controversies about the new law, the recent incorporation of Football Corporations by the major Brazilian clubs shows the development of the market and predicts an exciting scenario for the sport in Brazil.


[1] Deloitte Football Money League 2021, testing times. 2021. Accessed 13 March 2022. www2.deloitte.com/uk/en/pages/sports-business-group/articles/deloitte-football-money-league.html

[2] Confederação Brasileira de Futebol. CBF apresenta relatório sobre papel do futebol na economia do Brasil. 2019. Accessed 13 March 2022. www.cbf.com.br/a-cbf/informes/index/cbf-apresenta-relatorio-sobre-papel-do-futebol-na-economia-do-brasil