Investment Opportunities in the Brazilian Football

 Brazilian football is the only five times world champion. Brazil export more players than any other country. Brazilians of all ages, play football for fan at the beaches, in the countryside, up in the hills or down in the valleys! Football in Brazil is a fever and passion like no other! We have the best football player ever, Pelé!

These are reasons enough to take a few minutes and think about investment opportunities in the Brazilian Football. In Brazil we have some many football clubs that an investor may think buying one would be a good starting point. He couldn´t be more off target! The best opportunities are located on the formation of new and young players. In the last 10-15 years, the age of players leaving Brazil to play abroad has dropped  from 20 plus to 13 plus! This change can be explained by the fact that the top European clubs noticed that is far cheaper to develop a promising young player than to buy a exploding star, like Neymar! 

Last year, Barcelo FC of Spain published a very interesting report about the formation of football players. One key aspect in the report is hours per week played! The report says that a good/great player MUST play at least 10 hours per week of football. Here is important to say that these 10 hours must be played under professional supervision.

Another key point on the report is family support. The young player must have in his family full and iniquiviqual support! This support is more linked to the dreams, aspirations and goals than actual psychological development. This in itself is a contradiction because the dreams, aspirations and  goals are normally liked to money and psychological development is linked to character strength and resilient under pressure.

So how do I see a good investment opportunity in the Brazilian football. 

Several years ago, I was in Juazeiro, Bahia State and I went to see a football center just build by a group of Italian investors. The center had 5 full size football fields, 5 half size fields, restaurant, health and dental center, lounge facilities (each room with two young player) for over 120 players, school, physical trenee center, sport physiotherapy facilities and the support of a full staff. The center was attracting young player from all over the northeast region of Brazil. This region is characterized by a very low standard of living, specially in the countryside! Here there is another important point, best player most of time come from very poor families. The total annual cost for the center can be estimated as US$2-3 million.

So a similar center with agreements with several major clubs is in my opinion the best investment opportunity in Brazilian football. Let´s take some numbers to support it. A center for 100 young players with 25 player for each level (young (13-14), semi-young(15-16), semi-senior(16-17 and senior(17-18) shall produce annually something like this:

TOP player: 01

Good players: 03-05

Standard players: 05-10 

The price for a contract may vary quite a lot, but standard players in Brazil value somewhere in the neighborhood of US$200K. Good players may value something like US$3-5 million and Top players can be value into dozens of million.

 

The value of players may rise if the center has a agreement with international clubs so player from the center go to play in the international club and vice-versa. Scouts are another key point in attracting the best promising young players. To attract the best scouts, participation on the financial success of each player he finds is essential! In fact, to know the slicing of the pie is probably the most important aspect of all!

My next post will be about Mobile App in Sports!

All the best,

FBDV