Botafogo, Cruzeiro, and Vasco’s Decision on Mubadala’s Proposal: The Future of Brazilian Football League Hangs in the Balance

The four members of the group who have not yet made a decision — neither by signing the document, nor by breaking with the group and joining Forte Futebol — are BotafogoCruise, Guarani e Vasco.

Within the conditions placed by the Arab fund to sign the intermediate proposal, of R$ 4 billion, are the signing of at least 18 clubs and seven among the ten with the highest values.

As Libra is currently made up of 18 members, the first factor has yet to be reached. The second, yes. Therefore, the deal will be concluded in one of two cases:

The signing of this document is the necessary step for the deal to advance within the intermediary proposal, which includes the payment of BRL 4 billion by Mubadala, in addition to the immediate deposit of BRL 3 million as a “sign of goodwill ” of the foreign investor.

Botafogo, Cruzeiro and Vasco do not address the issue in public. Behind the scenes, rumors about the trio’s dissatisfaction have been circulating for months. Coincidentally, they are the first three clubs to become SAF in Brazil – which makes the decision up to their new owners.

On the one hand, these clubs understand that Corinthians e Flamengo they have bigger fans and add value to the Campeonato Brasileiro product, therefore they need to have higher remunerations, when it comes to the division of the funds of the transmission rights and the future investor.

On the other hand, there are concerns about governance issues and about the commission promised to intermediaries, of up to 5% on the total value of the operation, which can reach R$ 250 million.

Since joining Libra — which was initially founded only by Flamengo and the four big clubs in São Paulo — Botafogo, Cruzeiro and Vasco have tried to re-discuss factors of divergence with the group.

At the same time, there was an attempt to get closer to members of Forte Futebol. Momentarily, a kind of commission formed by eight clubs, four on each side, was formed. Botafogo and Cruzeiro were among Libra’s representatives.

If at the beginning the meetings looked like they could reach a positive, consensus outcome, at a certain point there was wear and tear.

Libra directors were bothered by Forte’s insistence on returning to points that are considered to have been overcome, such as the distribution of television money with the 40-30-30 criterion — 40% equal for all clubs, 30% according to performance and 30 % according to commercial factors.

The attempt at conciliation through this commission weakened. Top hats are exhausted. And it is because they are in this context, in which there is dissatisfaction with aspects of Libra, but without progress in the union with members of Forte, that Botafogo, Cruzeiro and Vasco are in a complex position.

Signing up with Mubadala means accepting the established terms and closing the deal, with no room for change. Migrating to Forte Futebol would be a high-risk move, which could leave them in a block of lesser commercial value, in the event that Brazilian football does not actually have a league, but two blocks for the sale of broadcasting rights.

Mubadala is an investment fund from the United Arab Emirates, whose money comes from the country’s sovereign wealth fund. The company’s subsidiary in Brazil, which also has resources from national investors, is responsible for negotiating the purchase of part of the future league.

The investors’ intention, when they become league members, is to recover the investment and profit in the long term, as they will receive 20% of the future revenues of the Brazilian Championship.