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If Santos is selling shirts, all must be right with Brazilian game

Updated: 2012-06-20 08:06
By Reuters in Sao Paulo ( China Daily)

If Santos is selling shirts, all must be right with Brazilian game

The year Luis Alvaro Ribeiro (pictured) took over as president of Santos, the famous Brazilian club sold fewer than 4,000 official shirts, sponsorship rights totalled less than $4 million and annual income was $34 million.

Three years later, following an overhaul of its amateur era statute and the hiring of international experts in management, marketing and law, Santos is earning more than $19 million from shirt sponsors.

The club also recently launched a new away shirt in electric blue and sold 25,000 in 45 days. Annual income last year surpassed $90 million.

The turnaround has been helped by the team's best winning streak since Pele played for the club half a century ago.

However, it would have been impossible without the restructuring process Ribeiro put in place, one of several being undertaken among Brazilian football's heavily indebted clubs.

Encouraged by a rising middle class with money to spend, ambitious and cash-rich sponsors and a strong local currency that makes signing and retaining players easier, clubs are no longer run in a chaotic fashion and are becoming more professional.

They still cannot rival the likes of Barcelona and Manchester United but, for the first time, Brazilian clubs are treating their off-field activities seriously.

"Luis Alvaro surrounded himself with people who had top experience in the business and financial worlds," said Amir Somoggi, sports management consulting director at auditing firm BDO Brazil.

"He professionalized the club by making it more like a business."

Similar changes are taking place at other Brazilian clubs as younger executives take over from an older generation of directors, many of whom faced accusations of mismanagement. Income is rising hugely as a result.

The top 20 clubs generated 2.14 billion reais ($1.04 billion) last year, a 27 percent increase on 2010 and up 73 percent from four years earlier, according to a BDO report.

Money is pouring into the game because of Brazil's decade-long economic boom and football's growing popularity, said experts and executives at different clubs.

In 2003, the government introduced legislation that tightened security in and around Brazil's dilapidated football grounds.

The league earned more credibility the same year when it abandoned the complicated and unpredictable playoff system in favor of a more stable competition like that used in England, Spain and Germany.

The recent financial crisis in Europe has stopped clubs there from cherry-picking Brazilian players and forced the country's teams to rely less heavily on transfer fees.

The amount clubs received from TV deals jumped sharply this year thanks to new negotiating rules.

The return of former Brazil striker Ronaldo has also been a boost.

The ex-World Footballer of the Year joined Sao Paulo-based Corinthians in 2009 and the close partnership the team formed with sponsors to make the deal work showed clubs new ways of making money.

Ronaldo retired last year.

"We decided to invest in football because we could see the visibility it offers is enormous," said Marcio Alaor de Araujo, vice president of BMG, a bank that sponsors five clubs including Santos. "That is growing and the publicity will only grow even further as the (2014) World Cup comes closer."

(China Daily 06/20/2012 page22)