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globo_respeite

“Football is run by Globo; the Federation is just a meeting room” – Alex

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Hundreds of tiny cuts. Day in, day out. Took me some years to notice, partly due to innocence, partly due to my inability to pick up the finer strokes and the “in-between-the-lines” in a still to me very foreign language.

From those early stages of ignorance, I progressed to denial, considering a wide, orchestrated campaign a preposterous idea, driven by the passion that blinds the best of supporters of any club at any given time.

Patterns became more visible over time, and so did my knowledge of the society in which I find myself inserted. These and other things converted to a different insight, laying the foundation for what I am about to address: the multifaceted and deliberate attacks on the Sociedade Esportiva Palmeiras.

These attacks are partly rooted in decade-long feuds of both political and social order; the Italian origin of the club; the “enemy-of-the-state” sentiment flourishing during WWII, culminating in the forced name change from Palestra Italia to Palmeiras; the biased Superior Tribunal of Sports, based in Rio de Janeiro, always catering for the interests of carioca teams; the rotten to the bone Brazilian Football Federation (CBF); the equally pathetic Paulista Football Federation… These and other factors directly and indirectly contribute to direct and indirect attacks on Palmeiras, exemplified on numerous occasions over the years, as exposed here at AP.

Yet, we are still to address Palmeiras’ main foe, the true hydra. The Globo television network and its affiliates.

The power of Rede Globo is unrivalled, and on many fronts. For decades, this giant of the Brazilian media has called the shots concerning the Brazilian championship and the National Squad, a puppet master of sorts behind the CBF. The Network assigns time slots for games without regard to stadium attendance, only concerned about securing maximum revenues from their primary cash cows, the telenovelas. Weekday games finish close to midnight, spectators sometime left without public transport to get home by.

The Network has its darlings, Flamengo and Corinthians. “The Clubs of the People”. Little efforts sparred to award advantages to these two in the pursuit of a “Barcelona vs. Real Madrid of the Americas” setting. Flamengo and Corinthians receive about the double in broadcasting rights compared to other major clubs, including Palmeiras, without any numbers to justify the distortion. They get more airtime, without television ratings to back up the decision. The two frequently enjoy positive plot twists: a Flamengo draw is an “increased undefeated streak” while a Palmeiras draw is a “narrow escape from embarrassing defeat”. Would you believe the Globo network even sponsors the fabrication of banners and flags for the organised supporter groups of Flamengo and Corinthians?
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The inflated broadcasting revenues enjoyed by the aforementioned darlings roughly correspond to what Palmeiras receive through the club’s Master Sponsorship agreement with Crefisa/FAM. Indeed an important source of revenue, albeit only making up some 16% of Palmeiras’ total inflow. The club is however frequently criticized in the media for “having accepted being hostage to the capital” and dependent on the whims of a sponsor.

Last year, after lengthy negotiations, Palmeiras opted for selling their 2019-2024 cable TV transmission rights to newcomers Esporte Interativo, part of the Turner Broadcasting Company, the television arm of Time Warner. This has generated two immediate effects: for the Palmeiras games that Globo would retain the right to broadcast (open air and PPV), the Network has offered Palmeiras a deal 20% below that of previous year. Palmeiras have so far refused; if stalemate prevails, Globo will be without broadcasting rights to 1/10 of games in the 2019 Brazilian championship.

More seriously, and as former Globo employee Luiz Ademar confirmed a few weeks back, the Network has been instructing their sports journalists to trash-talk Palmeiras. And not only Palmeiras, but any team that signs with Esporte Interativo.

Palmeiras’ exposure has diminished on cable TV and even on the radio, with the CBN and Globo radio stations sometimes opting out from a transmission that seemed like a no-brainer.

Add to this the absurdities frequently seen on social media. I refuse to linger on this topic, but will provide you with one example: “How many goals will Teo Gutiérres score against Palmeiras?” is the question posed by Globo affiliate SporTV. One would think the Network would express support for a Brazilian representative in the Libertadores Cup. Think again.
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Isolated, the aforementioned examples are easily brushed aside. Compiled, they draw a different picture. A picture also subject to healthy scepticism, were it not for its perpetration over time. And its effect on the referees.

No, there is no orchestrated conspiracy among referees to benefit certain teams and make life harder for others. No need to: everyone knows what happens to the career of a referee who makes a crucial mistake or two against Flamengo or Corinthians. Referees in Brazil never talk, unless they have committed such a mistake. A few weeks back we had one actually crying to the press outside the locker rooms.

No wonder attendance is dropping all over the scale. Supporters in general are tired of the bias, the manipulation and the outright lies. Palmeiras supporters in particular, who last week launched a twitter campaign that within hours reached the worldwide trending topics with the hashtag “GloboRespeiteOPalmeiras”.

Unhappy costumers is normally not good for business. In this particular context, unhappy costumers might hurt the brands associating themselves with Rede Globo in general and with football in particular. Food for thought.

Scoppia che la vittoria è nostra!

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SEP_PUMA

PUMA Brazil president Fabio Espejo and Palmeiras president Marcelo Gagliotti officialising partnership (photo credit: Fábio Menotti/Ag.Palmeiras)

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As you learnt from here a little over a month ago, PUMA will be Palmeiras’ provider of sporting equipment as of 2019. The contract runs over three years and was officially announced today. Between fixed and royalty-based revenues, Palmeiras expect to receive an approximate R$ 25 million (US$ 7,5 million) yearly from the deal, which is a 25% increase compared to the current Adidas partnership.

In addition to increased revenues, a few other aspects of the PUMA partnership stand out, such as:

# Kits ready available during the Brazilian pre-season (not as now, only at the start of the Brazilian championship in mid-April);
# Palmeiras the only Brazilian club sponsored by PUMA during the length of the contract;
# A “Team Palmeiras” set up at PUMA, attending exclusively to the club’s needs;
# Palmeiras gear available at PUMA stores worldwide.

A big, hearty welcome to PUMA. Rest assured you will never encounter a more faithful consumer than the Palmeiras supporter. Treat us right, and you’re in for quite a ride!

Scoppia che la vittoria è nostra!

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It was a closer call than one would perhaps imagine, Topper in it until the very end, but PUMA stepped up their offer and, as expected, are Palmeiras’ new provider of kits as of 2019. The deal was sealed yesterday night and is valid for a so far undisclosed number of seasons. With this, in December, Palmeiras’ twelve-year-long partnership with Adidas comes to an end.

In regard to the current arrangement with Adidas, the PUMA deal entails a 20% raise in fixed revenues, from roughly R$ 10 million to R$ 12 million (US$ 3,1 million to US$ 3,7 million), in addition to royalties based on sales and performance bonuses. In Brazil, PUMA will exclusively sponsor S.E. Palmeiras. All dealings regarding the partnership, from development to distribution, has PUMA Brazil as counterpart, with the company HQ in Germany’s approval.

PUMA came close in 2014, but Palmeiras opted to renew with Adidas, in spite of the partnership showing clear signals of fatigue. Today’s breaking news are certain to excite most Palmeiras supporters, while simultaneously installing a bit of performance anxiety: after all, PUMA are known for their tight fits. Heading to the gym in 3… 2… 1…
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Adidas has been Palmeiras’ provider for twelve years, but the continuation of the relationship seems to be hanging by a thread. The reasons are multiple. Several of more recent models put out by the German giant have not been particularly well received by supporters. The poor international visibility, and a business model whereby Palmeiras receive a fixed annual sum and not a percentage according to sales (mind you Palmeiras are Adidas’ fifth highest selling football club brand in the world) are other factors.
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Rumours regarding a swap have been frequent for some years, but this time it seems more plausible than ever. Two other offers are on the table: Brazilian brand Topper – with teams like Botafogo and Atlético Mineiro in their portfolio – and PUMA.

Reportedly, Topper has presented the financially most lucrative bid of the three. PUMA is somewhere in the middle, with compatriot Adidas trailing behind. Now, of course, there is much more than numbers to consider when assessing these offers: marketing strategy, distribution channels and logistics, and consumer awareness are just a few of the variables.

PUMA have two things going for them in particular. They offer an exclusivity clause, meaning they would not sponsor any other Brazilian football team for as long as they are partnering with Palmeiras. They also promise (although this should be treated with a healthy dose of reality check) they will give Palmeiras their “global brand” status, levelling with the likes of AC Milan and Olympique de Marseille in 2019.

PUMA are also, indisputably, the brand of choice among Palmeiras supporters.

My sources are particularly vague on this one, not much is leaking from inside the club, which is good. That being said: I’d put my money on the feline.

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Palmeiras and Crefisa last week announced the renewal of their sponsorship agreement, securing the highest amount paid to any club in South America and the 10th highest in the world, pushing Juventus (US$ 19 million/year) from the list. Although figures were not disclosed by Crefisa president Leila Pereira and Palmeiras president Maurício Gagliotti at the announcement, they are known to sum approximately US$ 24 million/year, for two years, bonuses for championship titles not included.

In addition to the sponsorship deal, Crefisa continues to boost Palmeiras’ contracting power. The acquired outstanding 50% of Dudu’s economic rights is an example, the recent signing of Miguel Borja, at a US$ 10.5 million price tag, another.

In 2016, Crefisa saw a record profit, some US$ 325 million. It is hard to calculate the impact of Crefisa’s increased visibility on its profits, but without doubt the deal with Palmeiras brought the company into the spotlights. Some sports journalists insinuate money laundering to explain the relatively high sponsorship deal, ignoring the splendid results Crefisa presents. It is rather revolting how a well-established private financial institution suffers accusations, while state-run companies like Petrobras and Caixa use public funds to sponsor many a team in Brazil, little questions asked.  

Below, a list of the ten biggest sponsorship deals worldwide in football (according to Forbes).

#1 Manchester United (Chevrolet) – US$ 80 million/year

#2 Chelsea (Yokahoma Rubber) – US$ 57 million/year

#3 Manchester City (Etihad) – US$ 57 million/year (including stadium naming rights)

#4 Liverpool (Standard Chartered) – US$ 43 million/year

#5 Arsenal (Emirates) – US$ 43 million/year (including stadium naming rights)

#6 Barcelona (Qatar Airways) – US$ 41 million/year

#7 Bayern Munchen (Deutche Telecom) – US$ 34 million/year

#8 Real Madrid (Emirates) – US$ 34 million/year

#9 Paris Saint-Germain (Emirates) – US$ 28 million/year

#10 Palmeiras (Crefisa) – US$ 24 million/year
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Palmeiras v Internacional - Brasileirao Series A 2016

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by Douglas Monaco*
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A likely, eminent mixing of football sponsorship with club politics frightens some and leads others to, tentatively, pull legitimacy from a late XX century example. Clarification is in order.

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Concerns about Palmeiras and Crefisa/FAM
On these early days of 2017, one theme has drawn the attention of Brazilian football followers in general and Palmeiras supporters in particular: the recent growth in prominence of Crefisa/FAM both in their role as sponsors of the team and in their political aspirations within the club.

The sponsorship contract is about to be renewed: a rumoured R$ 80-100 million (US$ 25-31) per year for the next two years, with additional bonuses for titles. If numbers are correct, it is by far the most valued sponsorship contract in today’s Brazilian football scene.

In the political realm, it is a given fact that the sponsor’s owner – Mrs. Pereira – is running for a seat in the club’s Deliberative Council with, some say, the ultimate goal to one day become club president.

This likely enmeshing of sponsorship with sharing in the club’s governance has made some – supporters, members etc. – worry because, as it stands today, there is no clarity about the configuration such a mixture of roles would end up having.

Another contentious point is the uncertainty about Mrs. Pereira having or not complied with all membership requisites to run for the Council, let alone to aspire becoming the president. Membership time needed to run for council is 8 years and then another 8 years as counsellor to be an eligible presidency candidate.

So, was she to be successful in these elections, her political involvement would be marred both by controversy in its functioning and by a possible breach of the club’s bylaws in its beginning.

Not good omens.

Some try to assuage these concerns, primarily eyeing the growth in cash injection that the renewed sponsorship contract would bring – however politically fuelled. They do so by citing the Parmalat Era as a precedent in this kind of arrangement in the club; a precedent that would legitimize the current situation.

In their 1992-2000 Partnership, Parmalat not only contributed millions of US dollars but was also involved in Palmeiras’ management. Why not allow Crefisa/FAM the same freedom now? the argument goes.

This article does not seek to question nor validate any current or future arrangement: after all, we do not know what it will look like if, and when, it comes into existence. This is simply an attempt to provide an accurate point of comparison. Those wanting to validate the present by quoting the past, must have a clear picture of what the past looked like.
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Description of the Partnership

Below, the general characteristics of the Palmeiras/Parmalat partnership:

1. Per the contract, Parmalat paid Palmeiras a monthly standard sponsorship fee and, simultaneously it bought highly qualified players and made them available to the club, without charging for it.

2. When these players were to be sold, Palmeiras had the right to a percentage in the profit – 20% – as a “showcase fee”.

3. The basic advertising spaces granted by Palmeiras were connected to the football team and, for some time, to the volleyball team: the company’s brand was printed alone in the chest-side of these sports’ uniforms.

4. There were also advertising spaces in the stadium: during a lengthy period, Parmalat’s brand was the only one in the placards around the pitch. Later, other brands were re-allowed.

5. The agreement also established co-management of the football department. Decisions about organizing, planning, directing and controlling of the football department were always to be shared among participants of the club and of the company, two each.

6. The figures were astronomical for the Brazilian market that, at the beginning of the Partnership, was still suffering hyperinflation:

  • The “standard sponsorship” raised a relatively reasonable monthly income to Palmeiras: 750,000 cruzeiros (the Brazilian currency at that time)
  • The player signings were outstanding: in 1992, Sorato, Cuca, Maurilio, Zinho and Mazinho; in 1993, Roberto Carlos, Antonio Carlos, Edilson, Edmundo and Cleber; in 1994, Rincon, Rivaldo, Alex Alves and Paulo Isidoro; in 1995, Cafu, Mancuso, Muller, Nilson, Djalminha and Luisão; in 1996, Junior, Sandro, Viola and the return of Rincon; in 1997, Oseas, Euller, Alex and the return of Zinho; in 1998, Arce, Paulo Nunes and Junior Baiano; in 1999, the return of Cesar Sampaio and of Evair, Asprilla… it’s a lengthy list of excellent players.
  • The average cost per signing varied between 700k and 3.5 million US dollars. Zino and Roberto Carlos cost around 700 thousand each, Antonio Carlos 1.4 million, Edilson 1.3 million, Edmundo 1.8 million, Rivaldo 2.5 million, Cafu 3.5 million (plus a fine imposed by a restrictive clause SPFC added to Cafu’s sale contract that forbade him to sign with Palmeiras for at least 1 year), Djalminha and Luisão cost together 5,5 million, Paulo Nunes a little above 3 million etc.

7. The results were remarkable: 3 State League wins, 2 National League wins, 2 Rio-São Paulo cups, 1 Brazil Cup, 1 Mercosur Cup, 1 Libertadores Cup; 10 titles in 8 years!
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Analysis and theoretical foundations

Beyond the facts and figures, it is important to retrieve the meaning of the agreement for the Partners, i.e. which benefit they derived from the relationship.

For Parmalat, Palmeiras meant:

1. Quick visibility: a conventional sponsorship contract – one in which no players are lent by the sponsor to the sponsored – would have brought a degree of exposure significantly lower than the incandescent visibility the Partnership generated at the time. The media agency then in charge of tracking citations, said the number of spontaneous media was equivalent to 20 times paid ads in the same media outlets.

2. Brand positioning: the Parmalat logo and its attributes were perceived in a qualified way by the consumers’ market in general and also by media companies.

3. Impact on general growth of the company: the massive growth in Parmalat’s buying of milk in the primary market and the acquisition of factories were viable due to the rapidly increased visibility and brand positioning experienced by the company.

4. Impact on sales: milk and dairy products had tremendous expansion in sales.

5. Football as a profit centre: sometime down the line, the transactions with players generated net cash for the company. Sources at the time stated that parts of this net cash were reinvested in the Partnership.

For Palmeiras, Parmalat meant:

1. Human resources: quality players that Palmeiras could only dream of signing in those days.

2. Direct income: the sponsorship fee plus the showcase fee.

3. Impact of the other income sources: tickets, TV broadcasting and general football income were enhanced due to the technical level reached by the team – proportional to Palmeiras’ tradition – and made possible by the Partnership.

4. Managerial capacity: Parmalat’s expertise in managing sports was much more qualified than Palmeiras’ at the time. In the context of the Partnership, that competence was made available to the club.

5. Football administration was segregated from other activities in the club: the Partnership allowed the segregation and that alone mitigated the impact of the club’s politics on the management of the football team.

6. The presence of a blockholder:

  • In business, it is generally accepted that a blockholder is seen as a potentially positive factor in corporate governance.
  • The colloquial expression that portrays this situation says “the eyes of the master fattens his cattle”.
  • For club football, a blockholder is not a usual character because managers have a mandate and even the highest-level directors are not “owners of the club” (though some seem to believe they are….).
  • The system of co-management emulated the blockholder situation, thus making the decisions more aligned to football’s utmost purpose: convincingly wining.

This reciprocity in gains between the partners is recognized by the Economics of Contracts – a research line – as a bilateral dependency, a situation in which partners, by means of a contract, can extract continuous gains in a relationship without the need to a formal integration between the parties.
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Conclusion
As seen above, the Palmeiras/Parmalat Partnership was constituted by a series of explicit rights and obligations between the parties, kept intact their legal constitution, had solid theoretical foundations, and produced concrete results for both participants.

Any comparison between that Partnership and the current situation involving Palmeiras and Crefisa/FAM must depart from the above-mentioned characteristics.
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CAMPEONATO BRASILEIRO DE 1994.
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*Douglas Monaco is 57 years old, Brazilian, and the biological child of an Italian man and a Brazilian women. Early in life, Erasmo was adopted by a family of Italian descent: becoming a passionate palmeirense was definitely his destiny. Holding two university degrees (Economics and Administration), he works as project auditor for a Dutch humanitarian entity.

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This text is a slightly modified version of the one originally posted, in Portuguese, at the Verdazzo! website.

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From time to time, you will find contributions from guest writers, on a variety of topics, here at Anything Palmeiras. Feel free to leave your feedback – either directly in the comments field or contacting the author.

And if you yourself would like to contribute to Anything Palmeiras, enter in contact through anything.palmeiras (at) gmail.com.

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Palmeiras, together with financial institute Crefisa and the Faculdade das Américas (FAM) today announced they are renewing their partnership for one more year. This was expected. After all, the owner of Crefisa and FAM, José Roberto Lamacchia, and his wife/director/president Leila Pereira have never hidden they are palmeirenses, dreaming of seeing Palmeiras a champion with their brand logos on the uniform. That dream came true a little more than a month ago, with the 2015 Brazil Cup title.

While the renewal was expected, the numbers were not. Palmeiras are landing nothing short of the largest uniform sponsorship in the history of Brazilian football. Crefisa and FAM are, together, scooping up every available space on the garments, pushing out Prevent Senior and TIM in the process: R$ 58 million for the jersey and R$ 8 million for shorts and socks, totalling R$ 66 million (US$ 16 million).
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Absolutely brilliant, of course. But looking at the pictures, I keep wondering if it hadn’t been wiser of Crefisa/FAM to reign supreme not by covering up every single square centimetre of fabric they are entitled to, but rather on the contrary, by keeping the jersey uniquely clean.

The current layout guarantees the logos are exposed at whatever angle, close cropped or far. Maximisation, in the most rudimentary understanding of the concept. But sometimes, or rather often, less is more. And as humans, we are prone to take in what pleases the eye. This is no less true for sports jerseys, where supporters will treasure brand logos that become one with the jersey and that harmonises in style, colour and positioning. Logos that becomes part of the identity of the team for a certain era, of certain trophies and glories.

Certainly studies have been made, expensive consulting firms have given advice. Nevertheless, my gut feeling – and I know I’m not the only one – is for Crefisa/FAM to reconsider their “occupy every space” approach for a clean and stylish look. A look that will please the eye of the beholder. Evoke positive feelings among the millions of Palmeiras supporters who acknowledgedly go out and buy heaps of jerseys. Now THAT is visibility, merchandising, money well spent.

Speaking of money: supporters of rival clubs are everywhere on social media, questioning Palmeiras’ signings and where “all that money” is coming from. The math is simple: R$ 66 million for the uniform, R$ 19 million from Adidas, R$ 45 million from the Avanti supporter programme (2015 figures), R$ 50 million from ticketing (idem), R$ 137 million in TV rights. That’s R$ 317 million (USD 77 million) right there.

Palmeiras have been doing the right thing – financially speaking – ever since Paulo Nobre assumed control in 2013. After years of hardship, Palmeiras are today one fat, happy pig. Albeit a bit patched.

Scoppia che la vittoria è nostra!

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