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The proposed Brazilian soccer breakaway league project Liga Forte Futebol (LFF) has agreed to a conditional investment of BR$4.85 billion (US$932 million) from venture capital firm Life Capital Partners and US investment group Serengeti Asset Management for a 20 per cent stake in the competition.
Confirmed:
- Investment dependent on the league comprising of all 40 first and second-tier clubs
- Amount of money invested to decrease to BR$2.3 billion (US$442 million) if only LFF members are involved
- Clubs still need to approve the proposed deal
- Project wants new revenue sharing model, with 45 per cent of income to be evenly distributed. 30 per cent will also be decided on sporting performance, while 25 per cent will be allocated based on commercial appeal
- Proposal vows to not have a financial difference between the first and last teams that exceeds 3.5 times
Context:
LFF is currently competing with the proposed Brazilian Football League (Libra) to launch a new domestic soccer competition. As of last month, 16 clubs were behind the Libra project, and it was confirmed last November that the league was in talks to sell a stake worth a reported BR$4.75 billion (US$912 million) to United Arab Emirates (UAE) state investment firm Mubadala Capital.
Unlike the LFF’s model of 45-30-25, Libra is advocating for a 40-30-30 split, with 40 per cent to be allocated equally and 30 per cent to be shared based on performance and engagement. The remaining 30 per cent would be divided based on five criteria, including fanbase size, average match attendance and social media following.
Comment:
“The major leagues in world football have shown that, by having a balanced and meritocratic division of resources, the championship’s competitiveness grows, generating a more attractive product,” said Alessandro Barcellos, president of Brazilian top-flight club Internacional.
“With a more attractive product, the revenues from the media and technology groups, national and international markets, expand strongly. With greater revenues, we will have more stars in Brazil and we will enter a virtuous circle for Brazilian football, with the objective of having a league among the three largest leagues in the world.”
Coming next:
With the LFF securing investment, all eyes will turn to the Libra project and whether it can land a deal of its own. The LFF has maintained an interest in having all 40 first and second-tier clubs involved, so those behind the Libra project will need to weigh up whether to abandon the project in favour of joining its rival.
