beyondbrics

By Andrew Downie in São Paulo

The Brazilian football club Flamengo has done well to capture the fading AC Milan star Ronaldinho. But without help from Brazil’s advertisers and sports marketers it would not have been remotely possible.

Although Brazilian football teams are in a better financial state they were a few years ago they can’t – on their own – afford to pay salaries like Ronaldinho’s, reported at R$900,000-1.4m (US$ 530,000-830,000) monthly. But with the Brazilian economy booming, the sponsors are ready to put up the money.
Although the details were not made public when the deal was announced on Tuesday, 30-year-old Ronaldinho’s three-and-a-half-year agreement probably mirrors similar deals by the rival Corinthians club to lure Ronaldo and Roberto Carlos back home, as well as recent accords that brought World Cup stars Robinho to Santos and Adriano and Vagner Love to Flamengo.

In those cases, multinationals like Nike played a part, and local Brazilian firms such as Batavo, a brand of milk; pharmaceutical company Neo Quimica; and processed meats firm Seara have shown their newfound clout by chipping in.

Brazilian companies have more money as the country’s economy grows and more and more people enter the consuming classes. Some 31 million people have joined Brazil’s middle class last since 2003, according to government figures.

Under such deals, sponsors pay part of the player’s salary and future performance bonuses. They chip in with freebies such as executive boxes for the player’s family. Players get a cut of image rights and merchandising such as shirt sales.
The sports daily Marca reported that Flamengo’s kit manufacturer Olympikus expects to sell 200,000 shirts with Ronaldinho’s name on them and that he would get around US$3 for each one.

The stars’ also presence allow their clubs to hike up entrance fees, as well as offer themselves abroad for lucrative friendlies. The revenue of Brazil’s first division clubs rose 12 per cent in 2009, according to a study by Crowe Horwath RCS. With their deal with Batavo about to end, Flamengo are already banking on increased sponsorship money thanks to Ronaldinho.

Clubs are sometimes ambivalent about big-name signings. Adriano was often posted AWOL while at Flamengo and the bored-looking Ronaldo only played in about half Corinthians’ games last season. The clubs, though, refused to publicly criticise them because they raised money and column inches even when sitting in the stands.

The directors at Flamengo would be wise to take the same pragmatic approach with the mercurial Ronaldinho. The former Barcelona star was once untouchable, as his FIFA World Player of the Year titles in 2004 and 2005 attest.

But for several years now he has performed fitfully. His value to Flamengo might not be in midfield, but on the balance sheet.

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