Santos in crisis

Unable to pay their players and with no revenue coming in, could this be the end of Santos as we know it?


This is the third in a series of previews of the 2015 Brazilian football season. The first, covering the league’s chronic calendar problems and looking at the prospects of Cruzeiro and Atlético Mineiro, can be found here. The second, detailing the restructuring effort currently being made at Palmeiras, can be found here.

On the evening of the 14th April 1912, somewhere in the Atlantic Ocean, the RMS Titanic struck an iceberg and sank. At the same time, in the Brazilian port city of Santos, a group of sportsmen gathered at their local athletics club to create a new football team – Santos Futebol Clube. They would go on to become one of the most important clubs in football history, helping to spread the sport worldwide during the 1960s and 70s.

Santos, however, have hit hard times. They are mired in a financial crisis that is undoubtedly the most severe in their long and proud history. Over a century after setting sail, the club are running a genuine risk of capsizing.

Nearly all major clubs in Brazil are in a ludicrous amount of debt. There are several explanations for this, but most stem from the fact clubs in Brazil are not businesses with shareholders, they are social clubs, where presidents are elected every two years by members. This system removes any personal responsibility that regular chief executives have, leading to irresponsible financial management and widespread short-termism.

For the past seven years, BDO Consulting have conducted an annual survey to calculate exactly how much Brazilian clubs owe. In their last study, covering the 2013 season, Flamengo retained the unwanted crown of being the most indebted club in Brazil, with a total bill of nearly R$ 760 million (around £190m). Santos, owing a comparatively modest R$ 297m, would appear to be some way away from Flamengo. However, the rubro-negro from Rio de Janeiro are the most popular club in the country, with a fan base countable in the tens of millions; Santos, on the other hand, do not have the structure to make a recovery any time soon.

Though they are one of the best-known Brazilian teams around the world, at home Santos are considered a small- to medium-sized club. The city of Santos is not particularly large, with a population comparable to that of Edinburgh, and it lies only 77km from the vast metropolitan area of São Paulo, which is over 40 times larger than Santos.

São Paulo’s three giant clubs: Corinthians, São Paulo FC and Palmeiras, are such institutions that there is little space left for Santos. Even in their own city, with less than half a million inhabitants, it is common to see people walking around with the shirts of either one of the state capital’s trio de ferro (iron trio).

Santos’ stadium, the Estádio Urbano Caldeira (commonly known as Vila Belmiro), is a charming but cramped venue, with its capacity of 16,798 making it the smallest in Brazil’s top flight. Not only is it undersized, it is rarely over half-full. Brazilian football has a problem with low attendances, one that hits clubs such as Santos harder than anyone else.

In the 2014 national championship, Santos’ average attendance at home matches was a paltry 8,560. Unsurprisingly, of all 20 top-flight clubs, Santos made the least profit from match-day income last year: an insignificant R$ 813k (just over £200k). To compare, rivals Corinthians raised almost R$ 17m of match-day profit over the same time period.

Then there is the television money. Under the current broadcasting rights agreement, Brazilian clubs receive an annual payment that varies from club to club according to their popularity: those who draw the bigger audiences command more money. Therefore, the country’s two largest teams, Flamengo and Corinthians, each receive R$ 110m per year from television behemoths Rede Globo. São Paulo and Palmeiras collect R$ 80m and R$ 70m respectively, while Santos get R$ 40m.

With a smaller fan base, less TV money and a tiny stadium, Santos have always been at a disadvantage when compared to their big-city neighbours. Crucially, they have always been aware of this and have conducted their business accordingly. Like many other South American clubs, Santos stay afloat by producing and selling talented young footballers.

In 2002, the last time Santos found themselves in financial trouble, they decided to promote a number of their youth players to the first team, notably Diego, Robinho and Elano. The youngsters were so effective that they ended up winning the national championship of that year, and the eventual sales of the trio helped the club regain financial stability.

Robinho (L) and Diego, the “Vila boys”, proved in 2002 that in Brazilian football, you can win things with kids. Photograph: Ari Ferreira
Robinho (L) and Diego, the “Vila boys”, proved in 2002 that in Brazilian football, you can win things with kids. Photograph: Ari Ferreira

In the late 2000s however, Brazil’s economy was booming and there were sponsors and investors aplenty, prompting Brazilian clubs to start spending money. Santos, with Neymar on their books, saw what they thought was a golden opportunity and decided to abandon their usual business model. They won the Copa Libertadores of 2011 and spent a fortune holding on to Neymar despite interest from Europe’s giants.

However, the subsequent success that Santos had banked on was very short-lived. In 2012, Neymar spent an inordinate amount of time out of the country playing for the national team, managing to miss over half of the Brazilian championship season. Without their key player, Santos struggled and finished the year in mid-table, missing out on continental qualification.

Neymar eventually signed for Barcelona in May of 2013 in what was meant to be Santos’ big pay day. However, of the €57.1m paid by Barcelona for the player, only €17m went to Santos. A sizable chunk of money for a Brazilian club, but hardly sufficient to cover the massive investment made to keep him at the club during 2012. That same year, Brazil’s economy began to slow down, bursting domestic football’s financial bubble. Sponsorships and investments disappeared and Santos’ future was thrust into uncertainty.

Their situation became so desperate that without a main sponsor and next to no match-day revenue, the entire R$ 40m Santos were due to receive later this month for 2015’s television rights was already spent in September of last year. The club asked Rede Globo for an advance in order for them to pay their wage bill.

Since then, the club have failed to pay players for the months of October, November and December, with Christmas bonuses (equivalent of one month’s wages, prescribed by Brazilian law) also going unpaid. Several of Santos’ key players have taken the club to court, as three months of unpaid salaries is considered grounds for contract termination.

One of the suing players in question is centre-forward Leandro Damião, whose transfer to the club in early 2014 could yet turn out to be a deathblow. Santos have yet to pay for Damião, having struck a deal with investors Doyen Sports to bring the striker to Vila Belmiro. Doyen paid R$ 42m to Internacional, Damião’s former club, for ownership of his contract, passing on his rights to Santos.

The plan was for the player to attract a move to Europe for a fee larger than R$ 42m, with Santos retaining any profit made. In practice, the transfer failed miserably. In 44 games for the club, he scored only 11 goals and fell out of favour with the fans. He was loaned out to Cruzeiro earlier this month.

In normal circumstances, it would be very difficult for Santos to get out of this deal without making a significant loss. With this court case, however, the club stand to lose an incredible amount of money. If the judge rules in favour of Damião, he will no longer be a Santos player, the club will be unable to make anything back on his transfer, they will owe Doyen Sports the entire R$ 42m fee as well as paying Damião the remainder of his contract and a sizable sum in compensation.

The paradox is that amid this woeful financial situation that only looks to be getting worse, Santos are aware that they still need to build a competitive football squad in order to stay in Brazil’s top division. They may have lost the spine of their first team to the courts: goalkeeper Aranha, veteran centre-back Edu Dracena, full-back Eugenio Mena, defensive midfielder Arouca and Leandro Damião, without receiving any compensation for their transfers, but what they really cannot afford is to be relegated.

Big clubs who have been relegated recently, Palmeiras and Vasco da Gama, received plenty of television and media coverage in the second division, they still did fairly well with their gate receipts and had enough quality to come straight back up. With Santos, this is less likely, they would run the risk of staying there.

However, it seems they will have enough quality to survive for this season at least. The current administration, elected in January when the damage was already done, have scoured the market for some affordable signings. Three players have come in on loans that involved no extra fees for the club: Grêmio centre-back Werley and wingers Marquinhos Gabriel and Chiquinho, while Fluminense midfielder Edwin Valencia, former AC Milan forward Ricardo Oliveira and returning favourite Elano have all joined on short-term deals.

Ignoring the severity of Santos’ situation would be unwise. Brazilian clubs have an air of invincibility surrounding them, regarding themselves as too big to fail. For the most part, this is true, even if a club such as Flamengo were to see their debts double over the next 12 months, they would be unlikely to run any palpable risk of collapse. Santos, however, are not in that tier. They are taking on water, some of the crew have jumped ship. Hopefully it’s not too late to keep them from sinking.

Next time: They say you should never return to a club where you have already had success, obviously no-one told Tite. After becoming world champions in his first spell, where can he take Corinthians second time around?

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The football season that never ends

Brazilian football is hamstrung by its calendar, while Minas Gerais duo remain favourites for silverware in 2015


Exactly one month after the 2014 season came to a close, the majority of Brazil’s big football clubs got together last week to begin their pre-season training. In under 20 days, these teams will play their first competitive match of the Brazilian season, one of the longest and most demanding campaigns in the sport, comprising several competitions and precious little rest.

São Paulo FC, as an example, will play a bare minimum of 62 competitive matches in 2015. If they advance beyond the first round of the bloated São Paulo state championships, the Copa do Brasil and the Copa Libertadores (all of which are extremely likely), that figure would surpass 70 matches. Were they to reach the finals in all competitions (unlikely, but not impossible), they would have contested 81 games over the space of 44 weeks.

This obvious overkill of football has a predictably high number of negative consequences for the game in Brazil. The most important of these is the detrimental effect this calendar has on the quality of football being played. The hectic schedule allows a minimal amount of time for squads to train together, with players spending the days between matches catching their collective breaths rather than developing tactical strategy or working on their skills. As a result, Brazilian league matches are often turgid events, littered with fouls and misplaced passes, with results usually decided by goals from set-piece situations.

The spectacle is disappearing, fans are put off by the lack of quality and scandalous ticket prices, pitches are ravaged due to not having sufficient time to recover and even with the golden opportunity of having the World Cup in their back yard last year, the popularity of the Brazilian domestic game has not increased overseas. For those of us left behind, the devoted fans, regardless of how tedious the league may be, all that remains is the hope of a brighter future.

Things move quickly in Brazilian football. One week away from the game and you are likely to miss a manager losing his job, a high-profile falling out, a headline transfer move and the birth of a new craque. During the off-season, this is intensified, with clubs trying to pack months’ worth of rebuilding into the space of a few weeks.

Brazil’s anticlimactic state championships all but destroy the magical pre-season anticipation found in other leagues around the world, but with so many changes and question marks, there is still plenty to fill the pages of Brazilian sport pull-outs in the month of January.

Over the next few weeks, I shall be posting a series of blogs looking forward to the Brazilian football in 2015, focusing on several big clubs and the questions surrounding them going into this new season, beginning with a trip to the south-eastern state of Minas Gerais.

For the last two years, Cruzeiro and Atlético Mineiro, Minas’ big two from the state capital of Belo Horizonte, have ruled the roost in domestic Brazilian football. The former, with their iconic ocean blue shirts, have won the national championship two years in a row and should be the favourites to clinch a third successive title in 2015, a feat only achieved once previously, by Muricy Ramalho’s São Paulo side of 2006-2008.

Cruzeiro’s secret has been in their stability, which has in turn bred consistency. For the last decade, while under the presidency of the “Perrela brothers”, the club had a reputation for being mismanaged, with woeful transfer policy and rumours of shady behind-the-scenes activities. When Zezé Perrela (now a Senator for the State of Minas Gerais) left the club in 2011, he did so on the back of a disastrous season in which Cruzeiro avoided relegation by only two points.

His successor, Gilvan Tavares, has managed to successfully transform Cruzeiro into one of the best run clubs in the country. As opposed to the “savage capitalism” approach adopted by the Perrelas, the transfer policy of Tavares’ Cruzeiro is far more intelligent. There is no annual rush to cash in on every remotely talented footballer in the squad as would happen under the previous regime, instead the club look to maintain the spine of their team year on year, only selling when the time (and price) is judged to be right.

Another key factor to their recent success has been coach Marcelo Oliveira. In his time at Cruzeiro he has been able to form an effective tactical system, but far more important has been his ability to manage his squad.

In recent years, Cruzeiro have had one of the deepest rosters in Brazilian football, with several talented options available in key positions, as well as promising youngsters pushing the senior players for places. Generally, the more the merrier when it comes to personnel in Brazil, especially considering the gruelling calendar, but this pressure cooker of egos so often ends up exploding all over the manager’s face. Where Oliveira has succeeded is in keeping his entire squad happy, rotating and substituting at the right time, making sure everyone feels valued.

marcelo-oliveira
Cruzeiro head coach Marcelo Oliveira is hoping to lead his side to a third consecutive national championship in 2015. Photograph: Washington Alves/Vipcomm

In these last few victorious seasons, Cruzeiro have always had some form of rebuilding to do, but thanks to being able to hold on to most of their first team year on year, it has been minimal. This off-season, however, could be the exception. Marcelo Moreno, their long-haired Bolivian goal-getter, has left Cruzeiro after a season-long loan, returning to parent club Grêmio. In an attempt to replace him, the club has moved for Santos’ Leandro Damião, generally regarded as one of the biggest flops in Brazilian football in 2015.

There is no doubt that Cruzeiro is a better fit for Damião than Santos – the champions focus a lot of their attacks on high balls into the penalty area, where the 17-times capped striker excels – but Cruzeiro’s system requires their No 9 to be a lot more than just an aerial threat. The reason Marcelo Moreno was so successful at Cruzeiro was his off-the-ball movement, creating space for the attacking midfield trio to infiltrate the area and score goals. Leandro Damião is far more cumbersome than the Bolivian, and may struggle to fulfil the role asked of him.

Elsewhere, last year’s star player Ricardo Goulart seems set to sign for Chinese side Guangzhou Evergrande, reliable left-back Egídio is on his way to Ukraine to play for Dnipro, while talented midfielder Lucas Silva is likely to join Real Madrid at some point during Europe’s winter transfer window. Cruzeiro have recruited Chilean midfielder Felipe Seymour to fill Silva’s shoes, and although it will be interesting to see how he gets on in Brazil, it certainly feels like the Foxes will go into 2015 with a considerably weaker side than in previous years.

While Cruzeiro have been the gold standard in consistency, the best side over the course of a 38-game season, their city rivals Atlético Mineiro have proved themselves to be the knockout specialists. When the stakes are high and the chips are down, there are few teams capable of getting past Atlético, including Cruzeiro.

After going through a transformation not too dissimilar to Cruzeiro’s in 2011 (albeit with the same president, the outspoken Alexandre Kalil), Atlético managed to build a team that dazzled spectators, led by attacking coach Cuca and his number 10: Ronaldinho Gaúcho. In a campaign that had several last-minute winners, incredulous comebacks and saved penalties, Atlético were crowned the best in South America after winning the 2013 Copa Libertadores, the first time the club had lifted the continent’s grand prize. Even with the odds stacked against them, Atlético always pulled through, playing an extremely fast tempo brand of football which constantly forced their opponents into making mistakes and became known as estilo galo doido, or “crazy rooster style”, a play on the club’s nickname, Galo.

Earlier last year, however, many thought the Galo bubble had burst. They had embarrassed themselves at the 2013 Club World Cup, not reaching the anticipated final against Bayern Munich and losing to Raja Casablanca in the semi-finals; coach Cuca had gone to China; nippy winger Bernard was sold to Shakhtar Donetsk; Ronaldinho was playing poorly and on his way out and new coach Levir Culpi seemed unable to control his squad.

The 2014 Copa do Brasil dispelled those doubts and marked the return of the galo doido. Curly-haired Luan took Bernard’s old role on the flank, Argentine midfielder Jesús Dátolo, who had gotten off to a slow start to his Atlético career the previous year, became a critical part of the team, scoring seven goals and laying on 20 assists in all competitions, while Diego Tardelli seemed to be playing in five positions at once in attack, capping a superb return to form with a call-up to the Brazilian national team. The dramatic turnarounds returned, and Atlético marched on to the Copa do Brasil title, playing their rivals Cruzeiro off the park in the two-legged final.

This January the doubts have returned, all revolving around one issue: Diego Tardelli, will he stay, or will he go? The forward seems set on securing a transfer to Chinese football, the announcement of which could happen any day now. If he is to leave, Atlético will soon reach the harsh conclusion that he is irreplaceable. That is not to say that Galo are destined to fall short of expectations without Tardelli, however his departure would force a style change at the club, as there is no-one available on the market that would be capable of performing his function.

Striker Lucas Pratto has arrived from Argentinian club Vélez Sarsfield, where he has been elected player of the year for the past two seasons, but he offers the team a different threat, more physical and able to lead the line, with a touch of flair and creativity thrown in. If Tardelli stays, they could form a very formidable partnership; if he leaves, Culpi’s reshuffle will no doubt be designed around his new Argentinian striker.

Next time, Palmeiras and São Paulo: a dispute that goes back more than 70 years resurfaces – football loses.

Cover image: Bruno Cantini / Atlético-MG

Menezes’ Seleção take a huge leap towards Olympic success

The appointment of Mano Menezes as Brazil head coach didn’t really blow anyone away. He took the job in 2010 after the Seleção’s disappointing World Cup display, and was the CBF’s official second choice to take the reins behind Muricy Ramalho, who had just signed a lengthy contract with Fluminense (and unofficially the third choice behind Luiz Felipe Scolari, who signed an equally long contract with Palmeiras).

Right away, he emphasised the need for a change in the Seleção’s style, correctly identifying that as hosts in 2014, they would not be able to rely on counter-attacking football to earn results. Menezes – always well-spoken and thoughtful in his press conferences – talked about Brazil needing to “take the game to their opponents” and often repeated the importance of being “the game’s protagonist”. Continue reading Menezes’ Seleção take a huge leap towards Olympic success

Mano opts for progressive Brazil squad for Ghana friendly

This Thursday, Brazil national team boss Mano Menezes announced his 24-man squad for the Seleção‘s friendly against Ghana in London on the 5th of September. There were considerable changes from the squad that lost to Germany recently, with some particularly popular inclusions.

Here are five quick talking points regarding this recent squad: Continue reading Mano opts for progressive Brazil squad for Ghana friendly