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The Paulistão 2018 final initiated a backstage war between Palmeiras and the São Paulo Football Federation (FPF) still far from its end.

In short, the sequence of events includes Palmeiras issuing a note, announcing the break with the Federation; the release of a video, showing the external influence in the game against Corinthians; and the club’s request for a formal investigation at the São Paulo Court of Justice for Sports (TJD-SP). The FPF responded by returning the box at the Federation’s disposal at the Allianz Parque.

For considerable time, Palmeiras supporters have demanded a firmer position from the Club concerning the frequent referee errors. Thus, in this case, they stand united, backing all decisions so far taken by the directors, including the no-show at SporTV’s Segunda Campeã after the game against Botafogo. On social media, it is common to see supporters advocating that the club do not dispute the 2019 São Paulo state Championship, or alternatively, line-up nothing but the U20 squad.

Opting out of the Paulistão would not be an easy decision. Even though most state championships are experiencing nothing short of a crisis, the São Paulo edition brings significant revenues to the clubs. Let us have a look at the numbers for 2018.

Broadcasting rights
The broadcasting rights of the Paulistão carry the highest price tag among all the state championships. In 2018, Rede Globo, through the PFP, distributed R$20 million to each of the big four (Palmeiras, Corinthians, São Paulo and, oh well, Santos) in the state.

Although the contract between the broadcaster and the Federation has never been disclosed in its entirety, it is considered “common knowledge” that clubs must play the championship with their main squad to receive their share.

Six of Palmeiras’ games were broadcasted on free-to-air television. In total, these games reached 187 rating points, as measured by IBOPE, corresponding to 13.4 million televisions tuned in. No Palmeiras sponsor would like give up such expressive brand exposure.
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Paulistao - table1

Rating points, Palmeiras games on free-to-air television

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Ticketing
Palmeiras had nine home games in the Paulistão 2018: eight at the Allianz Parque and one at the Pacaembu (semi-final against Santos). The Verdão headed both attendance and revenue rankings, with an average 31.399 supporters per game and a gross ticketing income of R$18 million and a net income of R$ 11.5 million.
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Paulistao - table2

Palmeiras gross ticketing revenues, Paulistão 2018

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Prize money
The Paulistão hands out the biggest prize among the state championships: R$5 million to the champions and R$1.6 million to the runners-up (Palmeiras, in this case).

Adding up the numbers
Palmeiras’ net revenues from this year’s edition of the Paulistão, comprised of broadcasting rights, ticketing and prize money, surpasses R$ 33 million. This corresponds to roughly 5% of Palmeiras’ annual gross income and would pay a full month’s worth of expenses generated by the club’s professional football department. Not at all negligible.

If opting out of the Paulistão, part of the revenues could be recovered through a pre-season tour, adding to the ticketing of the U20 team competing in the state championship. Still, Palmeiras would hardly reach the R$33 million mark.

What about the Federation?
From the Paulistão, the FPF receives 7% of gross ticketing revenues from the big 4 and 6% from the other 12 participating clubs. This arrangement brought the Federation a total of R$ 3.3 million this year. In the chart below, we can see that a whopping 38% of these revenues originate from Palmeiras; it would certainly be a hard blow to the Federation should it lose its primary source of ticketing income.
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Paulistao - table3

FPF ticketing revenues, 2018 São Paulo State championship

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Furthermore, add to this the damage to the Federation’s reputation, potentially reducing the value sponsors are willing to pay for the Paulistão. One of the biggest teams refusing to play the championship is not a minor issue and should not be underestimated. Palmeiras’ refusal could signal the beginning of the end of the Federation, as we know it today.

The hearing that took place last Tuesday is a clear indicator that Palmeiras are not bluffing. The club wishes to bring the truth out. The Federation should prepare for acknowledging its errors and aid in the quest for transparency. We have seen nothing of the sort so far and, to be frank, odds are small, very small.

With the backing of their supporters, Palmeiras are in a position to play hardball. Stay tuned.

– – – ooo – – –
by Augusto Anteghini Oazi

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TV Palmeiras
– the youtube channel – last week reached 300.000 subscribers, making it the 8th largest in the world and the only non-European football channel to reach the milestone. With more than 18 million views, it has rapidly become a prime source of information for Palmeiras supporters.

Yesterday, Palmeiras’ supporter membership programme Avanti reached the 110.000 mark, making it the 9th largest. Recently overtaking Internazionale and Manchester United, the next “victim” is Borussia Dortmund with roughly 120.000 members. 

“The Avanti is the primary reason behind our growing investments in football. The more members we have, the stronger Palmeiras become”, club president Paulo Nobre explains. Seems like the supporters are buying the argument: in Brazil, Palmeiras are second only to Internacional, the gaucho side computing some 130.000 members. If Avanti maintains the pace, it’s just a matter of time.

Not only the supporter programme boosts revenues: turnout at home games have generated impressive profit for the club so far in 2015. Palmeiras’ net revenue from the group stage of the Paulista championship totalled R$11.251.787, compared to the R$10.564.009 the other seven teams going through to the knockout phase managed to collect. Yes, that’s right: Palmeiras ALONE netted more than the other seven TOGETHER – some US$5 million. 

Palmeiras might be making big bucks, don’t think for a second it means entering spending mode. Valdivia can tell you more. The midfielder is unhappy with the current proposal for contract renovation, where Palmeiras offer a fixed salary roughly a third of his current, compensating with hefty sums each time he enters the pitch. Valdivia probably feels he is being punished for getting injured a lot. Palmeiras certainly feel they might finally get their money’s worth out of the player. With Mattos in the driver’s seat, we can assume the breaking point has been well defined and that Palmeiras won’t budge. Which is excellent.

Scoppia che la vittoria è nostra!

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21052013bspalmeirasdnovacamisa130063An outspoken and fervent defender of administrative virtues like professionalism and sound financial management, it came as a bit of a surprise when Palmeiras president Paulo Nobre last week announced that he avoids setting deadlines “in order not to be held hostage to them”. A rather peculiar statement from a man coming from the financial world.

Everything in life has a deadline; the ultimate, of course, being death. Deadlines keep us focused, set priorities, have team members pull in the same direction. They also help when difficult decisions need to be made.

Nobre tries to implement certain changes (paradigm changes, even) to the economic life of S.E. Palmeiras, and there are a few principles in play. He seems to be sticking to them like glue – and they do carry strong logic – but they are also doubled-edged swords.

One of the principles is that Palmeiras might currently be weaker than we’d want to, but that the club shouldn’t ever settle for second best when it comes to revenues. The absence of a master sponsor illustrates this better than anything else, as Nobre has refused to sign anything but a major sponsorship deal. In the end, that major deal never materialized in 2013, leaving Palmeiras’ jersey clean. The principle might be dignifying, but should have been not only constantly evaluated but subject to a deadline. Comes a time when one needs to face the music, cut one’s losses. Had Palmeiras at a certain point in time accepted a sponsor a little less major, millions and millions of reais would be fortifying the club’s cash flow right now. It’s very hard to know when that certain point in time has come. A pre-established deadline certainly helps.   

Same goes for athletes who are offered a new contract with remunerated based on performance and results. Nobre s trailing new ground, at least in Brazil, but seems to be facing considerable resistance. True, the transfer market has not quite reached momentum, but fact is Palmeiras had a month’s negotiating advantage that has gone up in smoke.

Former president Belluzzo dreamt of a strong Palmeiras on the pitch, dreamt of triumphs and titles. He gambled big, he brought in expensive players. And he failed. Nobre certainly shares the same dream, but his approach is rather the opposite. Too much the opposite? Before long Nobre might need to loosen up a bit, or risk ending up with the spoils as more merited players follow the money thrown at them from elsewhere. Hardly a dream scenario in the year of the centenary, with the Paulista championship kicking off against Linense on 19 January… We have a month.

Scoppia che la vittoria è nostra!

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A recent study conducted by auditing and consulting company BDO shows that Brazil’s National Championship – the Campeonato Brasileiro – could soon break into the top-five revenue generating leagues in world football.

The Soccerex football business site gives more details on the study, which analysed factors such as media rights, matchday revenue and merchandising sales. The report concludes that Brazil’s top 25 clubs generated US$860 million in revenue in 2011, making the Brasileirão currently rank sixth in the world behind England’s Premier League, Germany’s 1.Bundesliga, Spain’s La Liga, Italy’s Serie A and France’s Ligue 1. The Netherlands’ Eredivisie is found at seventh position.

BDO believes the impact of hosting the FIFA World Cup in 2014 could see the Campeonato Brasileiro displace Ligue 1 and break into the top-five.  BDO auditor Amir Somoggi stated that Brazil’s domestic league is likely to continue its climb as “while in Europe there are struggles to maintain budgets, Brazil is expanding.”

This is Brazil in a nutshell, if you ask me. Without doing much of an effort or being particularly professional about it, the Brazilian League is booming. Imagine if things were done correctly? And if clubs were managed as they should? The sky would be the limit. Now, why reach for the stars if a minimal effort is enough to satisfy the egos and fill the pockets of a few?

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Messeurs Steedman, Dezembro and Lima

This morning, at the construction site of the New Arena, WTorre announced the much awaited partnership with world-leading American sports and entertainment promoter AEG (more info here). The partnership not only raises the outlook for great revenues for Palmeiras, but also constitutes a major blow to rivals São Paulo and Corinthians as the New Arena will host many events that otherwise could have taken place at the Morumbi or the Itaqueirão stadium. This is not wishful thinking but a fact, an integrated part of AEG’s business concept of getting the exclusive rights to mega events – be they sports or entertainment – and have them tour the world, utilising the Stadiums that the company administrates. “The task is to transform the New Arena into one of the five most lucrative stadiums on the Planet” says Rogério Dezembro, one of the directors of WTorre, pointing toward the updated model on display (picture courtesy of Mr R. Spinelli). Chuck Steedman, vice-president of AEG, fills in: “It doesn’t matter where the music comes from, but I want it to be here. The priority will always be to generate new revenues for Palmeiras.”

AEG is already in partnership with Odebrecht – the company building Corinthians’ Itaqueirão Stadium – on the management of the Arena Pernambuco, where 2014 World Cup games will be played. There is however no risk that AEG will start laying its eggs in other baskets in São Paulo, as the deal signed with WTorre – ten years with the possibility of an additional 20 years extension – is exclusive: the contract bars AEG from exploring or managing any other stadium in the city of São Paulo while in partnership with WTorre.

It is clear that AEG has made an informed and strategic choice, opting for a long-term and exclusive partnership. For us palmeirenses the outlook is even more promising when considering that AEG has a tradition to invest in the teams linked to the stadiums they manage, although nothing of this has yet been discussed with Palmeiras.

During today’s event, a video with our very own “Saint Marcos” and David Beckham was screened. The star from Los Angeles Galaxy – a team managed by AEG – apologised for not being present in person, but congratulated WTorre and AEG and wished them and Palmeiras the best of luck.

Palmeiras president Tirone was nowhere to be seen, not even on video; a “conflicting agenda” was to blame for his absence. In fact, not one single Palmeiras director took part in the historic moment. Rogério Dezembro of WTorre was asked to comment on this, but he simply stated that Arnaldo Tirone was in fact unable to come and that the president instead had asked him to distribute Palmeiras jerseys to the executives of AEG and BlueBox – a company that will help AEG run the New Arena and today represented by CEO Beto Lima. What the AEG executives thought of this I have no idea, but in my humble opinion, it’s snafu beyond belief.

Today, Palmeiras took a gigantic step toward future glories. My heart is beating fast with excitement; an excitement only comparable to the despair I would feel if there was no New Arena being built, if there was no competent management being assigned to run it.

The Lord giveth and the Lord taketh away; let’s make sure we deserve this gift from above. Palmeiras need transparency, professionalism and democracy as of yesterday. Palmeirense: do your part and become a member, vote out the old, vote in the new.

AVANTI PALESTRA!

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Palmeiras' new Arena, scheduled for use by end of 2012

At any moment, the construction of Palmeiras’ new Arena will begin. The current and glorious Palestra Itália, the oldest stadium still in use in Brazil, will make way for the most modern sports complex in the whole of South America. In the words of Palmeiras’ president Luiz Gonzaga Belluzzo: “The Arena project is a gift to all generations of supporters of Palmeiras. It’s not the project of one president or one board of directors, but of all palmeirenses. We are very close of reaching a complete financial independence, having a modern stadium and a brand new club.”

The architect of the project is the Portuguese Tomás Taveira, responsible for among others the stadiums of Sporting, Leiria and Aveiro, all used during the 2004 Eurocup. The new Arena will have a capacity of 45.000 people: the lower ring holds 30.000; the two mid floors with roughly 250 cabins, restaurants and space for press and other professionals have a capacity for another 5.000; and a superior ring holds another 10.000 seats. In addition, the Arena will sport four new and modern dressing rooms, completely adapted to FIFA standards.

The construction is scheduled for completion by the end of 2012 (well ahead of the World Cup 2014, hosted by Brazil) with state of the art technology and moulded within the concept of sustainability, particularly in regard to the use of energy and the recycling of water. The Arena, budgeted at R$300 million (roughly €135 million) will however not be used exclusively for football: it will also be an important centre for cultural, musical and sports events in general. The localisation of the Arena is key in this aspect; closeness to the São Paulo city centre and several main avenues provide ease of access in the biggest city in South America and the economic centre of Brazil. For these kind of events, the spectator capacity could be expanded with an additional 15.000, holding up to 60.000 people.

Palmeiras will not need to chip in with any of the budgeted €135 million, as the project is entirely financed through a conglomerate of private investors, led by the constructor WTorre. WTorre will also cover all expenses for the running of the Arena (energy, water, security, cleaning, insurance, pitch care, etc – estimated at about €4 million yearly) for 30 years.

The revenues from home games will be 100% destined to Palmeiras. In addition, Palmeiras will have a cut in the revenues from other activities carried out on the Arena. This cut – today at 5%-20% depending on the type of revenue – will increase by 5% every five years. Thus, the Arena will provide Palmeiras with a new and secure revenue in a magnitude never before seen.

It’s with all the above in mind that president Belluzzo feels confident in stating that “We’re about to see a true revolution in our history.”

Check out the brilliant video presenting the Arena project here!

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