Understanding the Valuation of Brazilian Football Clubs: Insights from Amir Somoggi
The Importance of Stadium Ownership
Amir Somoggi, founding partner of Sports Value, recently shared his insights on the valuation dynamics of Brazilian football clubs during an appearance on CNN Esportes S/A. He highlighted a striking trend: teams with smaller fan bases are often placed higher in valuation rankings than traditional giants. A central factor in this phenomenon, Somoggi argues, is the ownership of a stadium.
“Not having a stadium doesn’t make any sense, in my opinion, being such a rich club and not having its own home,” Somoggi stated, emphasizing the essential nature of having a dedicated venue. In Brazil’s competitive football landscape, the ability to control one’s stadium is perceived not just as a logistical advantage, but as a fundamental pillar of economic viability.
International Comparisons
When comparing Brazilian clubs to their international counterparts, Somoggi pointed to a clear pattern: top clubs worldwide prioritize owning their stadiums. “I don’t see any intelligence in you not owning a stadium. You will be the only rich club in the world that doesn’t have its own home,” he reflected. This observation serves as a warning to clubs that are considering future investments. The implications of not having a stadium extend beyond immediate financial considerations; they can affect a club’s long-term strategic positioning.
Viability Over Ambition in New Projects
Somoggi stressed the need for viability in new projects. “It has to be viable. There’s no point in going crazy.” This straightforward advice encapsulates the delicate balance clubs must strike between ambition and practicality. While grand plans for new stadiums and facilities are exciting, they must be grounded in financial reality to yield lasting benefits.
The discussion extended beyond games, as Somoggi noted that owning a stadium opens opportunities for various commercial activities. “When you open your arena for entertainment—shows, you can better explore boxes, bars, restaurants, and commercial spaces,” he explained. This diversification of income sources significantly enhances the club’s valuation.
Brazilian Examples of Successful Asset Management
Somoggi provided notable Brazilian examples to illustrate the impact of effective asset management on club valuation. Atlético Paranaense stands out as a leading case. He praised their modern training facilities and well-organized budget, pointing out that despite a relatively smaller fan base, their infrastructure significantly bolsters their market value.
“Even if Atlético Paranaense fans are not that big and the brand is not worth that much, you have other factors that end up having a positive impact, and this weighs heavily on the valuation,” he noted. The same principles apply to Red Bull Bragantino, a club often underestimated due to its geographical location. However, strong investment in both the squad and infrastructure has propelled it into the spotlight.
Clubs Struggling to Keep Up
Conversely, some legendary clubs have fallen behind, particularly due to outdated facilities. Somoggi brought attention to Vasco and Santos, stating, “Santos and Vasco are the two clubs that fell behind in the issue of their own stadium.” He explained that their older arenas restrict revenue-generating potential, creating a competitive disadvantage in an era where infrastructure matters immensely.
“Santos plays in Vila, which is very small. São Januário is also very shy,” he analyzed, emphasizing how these structural limitations significantly hamper growth. Moreover, Somoggi remarked, “Valuation is cruel in this sense. Who was left behind, the numbers clearly show.”
The Role of CNN Esportes S/A
The conversation on stadium ownership and club valuation was part of the broader themes discussed on CNN Esportes S/A, where Somoggi’s expertise sheds light on a market that operates on billions and is known for its profitability. Hosted by João Vitor Xavier, the program delves into the economics and business of football, providing viewers with valuable insights on the growing intersection between sports and finance.
By unraveling the intricate web of infrastructure, asset management, and financial strategies, Somoggi’s commentary reveals the multifaceted dynamics at play in the world of Brazilian football, illustrating how modern clubs can leverage smart investments for sustainable success.