Bahia opens City’s proposal: investment of R$ 1 billion by 90% of the company that will manage football | sport business

Guilherme Bellintani, president of Bahia, presents to club advisors, on Friday night, details of the proposal made by City Football Group to buy the company that will manage tricolor football.

Leonardo Martinez, Guilherme Bellintani and Vitor Ferraz, managers of Bahia — Photo: Felipe Oliveira / EC Bahia / Publicity

City undertakes to invest R$ 1 billion in the SAF to be set up by Bahia, in exchange for the acquisition of 90% of its capital, which gives it control over it. The money is divided into three purposes:

  • R$ 500 million for the purchase of players;
  • R$ 300 million for the payment of debts;
  • R$ 200 million for infrastructure, basic categories, working capital, among others.

The contractual term for City to fulfill these financial obligations is 15 years. Managers have most of the investment, especially in hiring athletes, in five years.

In order to stimulate the competitiveness of football under the new command, in case the administration passes to the foreign group, there will be a contractual obligation to maintain the company’s payroll at the highest:

  • 60% of SAF’s gross revenue, excluding player transfers.

Civil association debts will be paid in full. Instead of entering into a judicial reorganization process or the centralized execution regime, Bahia will negotiate debts directly with creditors. The contract provides that all existing debt will be paid off by City.

According to the proposal, the brand will remain the property of the civil association. Its use in the SAF, for the practice of soccer, is conditioned to the payment of R$ 2.5 million per year in royalties.

By keeping items linked to the brand, the association has power over issues such as anthem, coat of arms, shield, symbols, nicknames and colors. Any change can only occur by decision of the association.

Programs that had been running by the association will be maintained by the company. Some examples are the “Popular Shirt”, with a cheaper game uniform; the “Bermuda and T-shirt”, a membership plan for those earning up to R$1,500 per month; and “Dignity to Idols”, which gives out grants to former players in need.

If it has the approval of its partners, Bahia will repeat the process carried out by opponents such as Botafogo, Cruzeiro and Vasco. Professional and grassroots football, male and female, will be transferred to a company, to be incorporated in the form of Sociedade Anônima do Futebol (SAF).

The acquisition takes place in this company. City Football Group intends to buy 90% of the capital, a percentage high enough to give it control over football. The civil association Esporte Clube Bahia would remain in the company with a minority interest, through its 10%.

SAF would be managed through a Board of Directors, composed of six people. Five would be nominated by City; one by the association. All the company’s professionals would report to this body, which would assemble the strategy and make the main decisions.

In this structure, it is the role of Esporte Clube Bahia to monitor the company’s management, including through financial statements, and ensure that contract clauses are fulfilled.

If it takes over Bahia’s football, City will implement in Brazil the methodology for football management and training of athletes that it uses in the rest of the world, in the clubs that make up the group. This includes its own technology and the inclusion of Bahians in the network to attract talent.

Ferran Soriano is the global CEO and mentor of this model. With a successful spell at Barcelona between 2003 and 2008, also author of the book “The ball does not enter by chance”, the executive envisioned the exchange of information and players within a football multinational.

There was an intention to buy a club in South America to make it a flagship on the continent. There were conversations with other Brazilian leaders – for example, from Atlético-MG –, but they did not progress.

The negotiation with Bahia began in September last year. Club officials approached City representatives with the help of Paulo Pitombeira, the player’s manager – among them Gabriel Jesus, then still at Manchester City, and Gabriel Pereira, from New York City FC. Pitombeira worked as an intermediary in the purchase and sale operation.

If it is really bought, Bahia will be in second place in the group’s investment scale, behind only Manchester City. Internally, City Football Group organizes its clubs along three lines:

  • Flagship (“flagship”);
  • Talent;
  • Partnership.

The flagships are located in markets with great socioeconomic relevance, but not necessarily football tradition. New York City (United States), Melbourne City (Australia), Mumbai City (India) and Sichuan Jiuniu (China) fall into this category.

Some branches were acquired with the aim of training young talents and supplying the chain. Montevideo City Torque (Uruguay), Troyes (France) and Lommel (Belgium) are examples of this subgroup.

Partnerships were signed for the exchange of information and players, but not always with the purchase of part of the club’s capital. The group holds a minority stake in Yokohama Marinos (Japan), while it has no ownership in Bolivar (Bolivia).

Ferran Soriano, CEO of City Football Group, and Txiki Begiristain, director of football at Manchester City — Photo: Alex Livesey/Getty Images

City Football Group has its capital divided between three companies:

  • Abu Dhabi United Group – 77.22%
  • Silver Lake – 14.54%
  • China Media Capital – 8.24%

Abu Dhabi United is owned by Sheikh Mansour bin Zayed Al Nahyan, a member of the UAE’s royal family. Leaks of internal documents indicate that the company is managed by the country, but the group claims to be independent from the government.

After the purchase of Manchester City, in 2008, and the expansion around the world through the acquisitions of other clubs, throughout the 2010s, the group had shares sold to Americans and Chinese. Decisions continue to be made by the representatives of the Arab sheikh.

Guardiola and Sheikh Mansour bin Zayed Al Nahyan — Photo: Getty Images

About Abhishek Pratap

Food maven. Unapologetic travel fanatic. MCU's fan. Infuriatingly humble creator. Award-winning pop culture ninja.

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