During Saturday, it was announced that SAF (Sociedade Anônima do Futebol) Cruzeiro had been bought by a company owned by former player Ronaldo. The disclosed value was R$400 million. But there are still a number of questions about the business model of this pioneering deal in Brazilian football. Therefore, in this post, we will reveal what is already known about the process and how it will shape the future of the club.
First, let’s remember that Cruzeiro founded SAF last week. I have already notified the Brazilian Football Confederation to transfer competition rights and player contracts from the union club to the company. It is the first club to implement this process under the new law of Sociedade Anônima do Futebol, which was approved this year.
Last Friday, club authorities agreed to sell up to 90% of SAF do Cruzeiro. The sale of Ronaldo was announced the day after this endorsement, directly with Cruzeiro president, Sergio Rodriguez, and Ronaldo. There was a statement from XP Investimentos, the broker of the deal, with some information about the deal.
He stated in the document that there will be investments of 400 million Brazilian riyals “over the next few years” through Tara Sports. The stated goal is “to restore the financial and operational balance of the club’s football division”.
What happened between Ronaldo and Cruzeiro?
The parties signed the Protocol of Intent. This is an important step for the transaction, but it does not mean that it is complete. Basically, there was an agreement on the negotiation terms (values, conditions), but it still had to be ratified with the verification of documents from both parties.
The next verification process is called “due diligence” where both parties perform some kind of check on the future partner. Ronaldo confirmed in a statement on his channel that this type of measure will be implemented. The XP statement states that “the completion of the transaction is subject to the completion of a series of pre-existing conditions.” Audits usually take a few months. As for ESPN, Sergio Rodriguez said he only found out about Ronaldo’s proposal in early December.
What is the Ronaldo company that will buy Cruzeiro?
Tara Sports is a company founded in Madrid to acquire and manage Real Valladolid – a Spanish club that Ronaldo bought. The partner and only responsible is Ronaldo Nazario himself through the Spanish commercial registers. Its purpose is to provide consultancy and advisory services in the technical and sports environment. The main office is located in the Plaza de Lealtad in Madrid.
The company’s capital is 21.157 million euros (135 million Brazilian riyals). Tara Sports was founded in 2018, and its initial capital was 3000 euros. But in 2019, Ronaldo increased the investment. It was exactly the period in which the former player increased his participation in the Spanish club.
What is the interaction between Cruzeiro and Valladolid?
The two teams would, in theory, be part of the same group. It remains unclear whether Ronaldo will establish a subsidiary of Tara Sports in Brazil or whether the Spanish company will simply acquire shares of SAF do Cruzeiro.
Under FIFA rules, there is no obstacle for a business group to participate in more than one club around the world as long as they do not compete in the same competitions. The City group, for example, has clubs across the UK, Uruguay, USA and Spain, among others.
How is Dion Cruzeiro?
Cruzeiro’s net debt is approximately R$1 billion. The debt remains with the bond club, but the SAF is obligated to transfer 20% of its income, and 50% of its dividends, to pay off the debt, under the provisions of the new Companies Act. In other words, Ronaldo’s company will receive about 80% of the free revenue to finance the club’s football.
In the first half of 2021, Cruzeiro generated revenue of R$69 million. There are TV leases in effect until the end of 2022 due to advances from previous administrations. Therefore, there was a delay in wages.
Ronaldo is expected to inject money to solve pressing problems, Cruzeiro president said. In a recent interview with the Flow podcast, Ronaldo said: “Football is profitable. A database like Cruzeiro is a money-making machine. You don’t need to be a genius, it works well.”
How is Cruz rated?
Prior to its sale, Cruzeiro carried out an evaluation procedure for its brand. She had a target amount to be collected, which was not disclosed. According to Sergio Santos Rodriguez, for ESPN, there were other proposals, and Ronaldo was the best.
How will Ronaldo’s management be?
So far, only Ronaldo has appeared as a partner in the purchase of Cruzeiro. He bought Real Valladolid for 30 million euros – then helped pay off a debt of 25 million euros. The following year 2019 it took another share until it reached 70%. In an interview with the same Flow podcast, he stated that he did not buy a club in the US because the franchise cost alone was US$70 million.
Cruzeiro’s president, Sergio Rodriguez, has stated that the total amount of R$400 million will be invested in five years of operation. He informed that the priority would be to pay off the debts that led to the transfer ban in FIFA – Veto Recruitment.
Ronaldo stated on his channel that he would use European management expertise, including financial controls. In Spain, La Liga has the most restrictive administrative rules on the continent, limiting payroll to a percentage of revenue. This is verified by a control body. The former player talked about a sustainable cruise.
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