A New Era of Financial Prudence at Flamengo

Luiz eduardo Baptista, known as Bap, has ushered in a transformative approach to player transfers since assuming the presidency of Flamengo. Under his leadership, the club now mandates upfront cash payments or robust bank guarantees for all player sales, a strategic move designed to shield the club from the pervasive issue of financial defaults that have plagued Brazilian football.

Bap’s Stance: Prioritizing Financial Duty

Bap’s frustration with the existing system is palpable. I find it curious that when you say, ‘Look, I’m not going to sell anymore if it’s not in sight, because clubs don’t honor what was agreed,’ people are surprised. People should be surprised with those who do not pay. This statement, made during an interview with Flamengo TV, underscores his commitment to holding other clubs accountable. He further questioned the logic of partnering with entities that consistently fail to meet their financial obligations.

Would you be a partner of someone who owes you $1,000, $2,000 in a transaction? Behavior lights yellow light for us.

Luiz Eduardo Baptista, President of Flamengo

Leveraging TV Rights as Collateral: A Novel Approach

One innovative solution proposed by Bap involves utilizing television broadcasting rights as a form of guarantee. He explained that clubs could pledge a portion of their TV revenue to cover potential debts, ensuring that Flamengo receives its due payments. this strategy aims to mitigate the risk associated with relying solely on promises and goodwill.

For example, if you had to receive 10 (millions) from Globo, for example, and you owe 2 (millions) for me, Globo will contingent 2 (millions) of its 10 (millions) to pay me. The day you pay me, it releases and it’s all right. Many people do not want to compromise these future lines of credit to past debt. It is an old habit of Brazilian football, to follow players without you fulfill your obligations.

Luiz Eduardo Baptista, president of Flamengo

This approach directly addresses what Bap describes as an old habit of Brazilian football, to follow players without you fulfill your obligations.

The Shadow of Corinthians‘ Debt: A Catalyst for Change

Bap specifically cited Corinthians’ outstanding debt to Cuiabá for the transfer of midfielder Raniele as a prime example of the financial mismanagement plaguing the league. the public complaint from Cuiabá’s president, Cristiano Dresch, resonated deeply with Bap, solidifying his resolve to implement stricter financial protocols.

Dresch’s lament – I sold the athlete because I needed money to reinforce me. I lost the athlete and the money. I ended up being penalized – highlights the devastating consequences of clubs failing to honor their financial commitments. This situation served as a wake-up call, prompting Bap to take decisive action.

Most clubs congratulated us, good relationship. Some,even by virtue of what Flamengo released,began to say,”There is also a long time that I don’t get.” Who caught me a lot of attention was the president of Cuiabá,who spoke of the case of Raniele. He said: “I sold the athlete because I needed money to reinforce me. I lost the athlete and the money. I ended up being penalized.” I solidated myself,he was the first to draw attention. At least six presidents commented with me spontaneously. Another two or three also externalized that it might vrey well be the embryo of the financial fair play process.

Luiz Eduardo Baptista, President of Flamengo

Early Success: The Fabrício Bruno Transfer

Flamengo’s commitment to its new financial strategy was immediately evident in the sale of Fabrício Bruno to Cruzeiro. The Minas Gerais club was required to pay the full €7 million (approximately R$44 million) upfront, demonstrating Flamengo’s unwavering stance.this transaction stands as the sole example of a domestic player sale under Bap’s stringent financial guidelines.

Implications for Brazilian Football

Flamengo’s proactive approach could potentially trigger a broader shift towards financial responsibility within Brazilian football. By demanding upfront payments or guarantees, the club is setting a new standard for player transfers and challenging the long-standing culture of debt and default. Whether other clubs will follow suit remains to be seen, but Flamengo’s actions have undoubtedly sparked a crucial conversation about the financial health of the sport in Brazil.