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From Member Associations to Market Actors:Football Club Ownership Regulation in Brazil and the Impact of the SAF Model

  • Writer: Mark O'Neill
    Mark O'Neill
  • Jan 1
  • 9 min read
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Shutterstock

For much of its modern history, Brazilian football has been known as one of the great footballing nations on the planet. Winning 5 World Cups, 9 Copa Americas, and giving the game some of the greatest players to have ever graced a football pitch in Pele, Ronaldo (the original one), and Romario.


Off the field, ownership of their football clubs has been characterized by an associational ownership model, in which clubs operate as non-profit civil associations controlled by member-elected directors allowed for clubs to feel closer to the fans and the community. However, chronic indebtedness, weak governance, and restricted access to capital markets prompted increasing calls for reform. These culminated in the enactment of Law No. 14,193/2021, which introduced the Sociedade Anônima do Futebol (SAF) as a dedicated corporate vehicle for professional football activity.


This article examines the historical regulatory framework governing football club ownership in Brazil, outlines the legal architecture of the SAF regime, and assesses its early effects on governance, investment, competitive balance, and creditor protection. It argues that while the SAF represents the most significant structural reform in Brazilian football governance in decades, its success remains contingent on effective regulation, transparency, and the alignment of commercial incentives with sporting integrity.


1. Introduction

Brazilian football occupies a paradoxical position within the global game. Despite unparalleled cultural significance and status as the world’s largest producer of elite playing talent, Brazilian clubs have historically generated a disproportionately small share of global football revenues. Structural weaknesses in club governance and ownership have been widely identified as a significant cause of this imbalance.


Until recently, the overwhelming majority of Brazilian clubs were organized as non-profit civil associations, a model that limited access to equity investment, encouraged short-termism, and insulated administrators from meaningful financial accountability. The passing of Law No. 14,193/2021 marked a decisive shift, allowing clubs to separate football operations into for-profit corporate entities (SAFs) capable of attracting domestic and foreign private capital.


2. Historical Framework: The Associational Model

2.1 Legal Status of Clubs Prior to 2021

Traditionally, Brazilian football clubs were constituted under the Civil Code (Law No. 10.406/2002) as non-profit associations. Although the Pelé Law in 1998 (Law No. 9.615/1998) started the process by permitting clubs to operate as companies, uptake was minimal; by 2019, fewer than 10% of clubs had adopted a corporate form.


Under the associational model, clubs were governed by elected presidents and boards, typically serving short electoral mandates of two to four years. This structure often incentivized populist spending policies, weak financial discipline, and limited long-term planning, contributing to endemic insolvency across the professional game, as club leaders focussed on seeking re-election rather than sensible long term planning.


2.2 Financial Crisis and Regulatory Intervention

By the mid-2010s, Brazilian clubs had accumulated billions of Reais in tax, labour, and commercial debt, with the federal government emerging as their principal creditor. For example, In April 2015, less than a year after the country hosted the FIFA World Cup, eight of the top 12 Brazilian clubs were behind on the payment of salaries. In 2014, only one club, Flamengo, revealed that it had earned enough to service its debts and its taxes obligations. By April 2015, the government was the Brazilian clubs’ largest creditor, with around US$1.3 billion in unpaid taxes[1]. Legislative responses such as the PROFUT regime (Law No. 13.155/2015) sought to promote fiscal discipline but stopped short of transforming ownership structures. PROFUT enabled clubs to restructure their tax debts while ensuring the taxpayer was not left out of pocket.


3. The SAF Regime: Legal Architecture

Creation and Purpose of the SAF

Law No. 14,193/2021 instituted the SAF Regime, a specialized form of public limited company governed primarily by Brazilian corporate law (Law No. 6.404/1976) but adapted to the curiosities of football.


The SAF may be formed through:

1.      Transformation of an existing club;

2.      Spin-off of football assets into a new corporate entity; or

3.      Conversion of a pre-existing football company into the SAF format.

 

Ownership and Control

The SAF model allows full or majority private ownership, including by foreign investors. There are no statutory nationality restrictions on shareholders, nor on the size of the stakes they may hold, subject to general Brazilian investment law. Importantly, the original club association may retain a minority stake or special veto rights, depending on the transaction structure, but this is not mandated. The SAF takes typically control of sporting assets, which the association retains control of the non-football assets, and the SAF becomes the sole sporting operation. Additionally, the association often retains legal responsibility for historic liabilities, and shields investors from legacy debts, which is unusual in merger and acquisition activity, as the acquiring company often assumes control of all of the assets and liabilities of the acquired company.


Governance and Transparency

The law mandates corporate governance mechanisms uncommon in the traditional club model, including:

·         Boards of directors and statutory officers;

·         Enhanced accounting and disclosure obligations;

·         Personal liability for managers in cases of mismanagement or fraud.

 

Debt Treatment and the Regime Centralizado de Execuções (RCE)

One of the SAF’s most distinctive features is the RCE, allowing clubs to reorganize legacy debts while protecting the SAF from historical liabilities not expressly transferred. Creditors are paid through a centralized mechanism, typically over a period of up to ten years. It functions as a debt‑stabilisation device rather than outright debt forgiveness. It is designed to keep clubs operating and attract investment, rather than forcing liquidation or allowing creditors to pursue claims separately. If managed well, it can bring financial stability; if mismanaged, it may simply delay insolvency rather than resolve it.

 

4. Effects of Allowing Private Ownership

Investment Inflows and Market Entry

The SAF regime has enabled unprecedented levels of inward investment into the Brazilian leagues, similar in principle to the Premier League model in England, which is free market in spirit, with both domestic and foreign investors acquiring controlling stakes in historic clubs.


High-profile acquisitions include:

  • Cruzeiro (initially by Ronaldo Nazário);

  • Botafogo (John Textor via Eagle Football Group);

  • Bahia (City Football Group);

  • Coritiba (Treecorp private equity).


By late 2025, more than 120 SAFs had been registered nationwide, spanning all four national divisions.


Governance Professionalisation

Research and legal commentary suggest that SAFs have usually led to better financial reporting, clearer long‑term planning, and stronger compliance, especially when investors have experience in international football.

 

However, results are uneven, and cases such as Vasco da Gama, who were acquired by 777 Partners, who have now been forced to relinquish control of the club by the Brazilian courts due to severe liquidity issues (see The Esk[2] for more detailed reporting on this), show the problems that can arise when investors lack sufficient funds or are already financially troubled.

 

Competitive Balance and Integrity Concerns

The entry of wealthy investors has raised concerns regarding competitive imbalance and the absence of a robust domestic financial fair play regime. While some SAFs have rapidly improved on-field performance, others remain financially and sporting fragile.

Additionally, the rise of multi-club ownership structures involving Brazilian SAFs has prompted regulatory scrutiny at both domestic and international levels.


5. Case Study: Botafogo de Futebol e Regatas and the SAF Model

Background and Transaction Structure

Botafogo de Futebol e Regatas (“Botafogo”), one of Brazil’s most traditional clubs, was among the first major institutions to adopt the SAF model following the enactment of Law No. 14,193/2021. In March 2022, the club transferred its professional football activities to Botafogo SAF, selling approximately 90% of the share capital to John Textor, a United States-based investor and principal of Eagle Holdings [3] [4].


AI generated image of a Botafogo player
AI generated image of a Botafogo player

The transaction required minimal upfront valuation and was driven primarily by the club’s acute financial distress. At the time of conversion, Botafogo reportedly carried debts exceeding R$1 billion, including tax, labour, and commercial obligations. The SAF structure allowed historic liabilities to remain largely with the association, subject to repayment under the RCE regime, while the new corporate entity received the club’s sporting licenses, player contracts, and intellectual property [5] [6].


Governance and Multi‑Club Ownership Dynamics

Botafogo’s SAF is controlled by Eagle Holdings, which also owns or controls clubs in Europe, including Crystal Palace (England) (until June 2025), Olympique Lyonnais (France), and RWD Molenbeek (Belgium). This made Botafogo one of the most visible examples of multi‑club ownership (MCO) within the Brazilian SAF system [7].

 

From a governance perspective, the SAF introduced a professional board structure, centralized executive authority, and formal accountability mechanisms aligned with Brazilian corporate law. However, the concentration of control in a single foreign investor raised concerns among experts and regulators regarding:

  • conflicts of interest within multi‑club networks;

  • sporting integrity (particularly in continental competitions); and

  • limited residual influence of the original association [8] [9].


Notably, Brazilian law does not prohibit MCO, relying instead on general competition law and football federation regulations. This places Brazil closer to permissive jurisdictions such as England than to more restrictive continental European models.


Sporting and Financial Outcomes

In sporting terms, Botafogo’s experience is frequently cited as an early example of competitive success under the SAF regime. Following sustained investment in playing staff, analytics, and infrastructure, the club:

  • returned to domestic prominence; and

  • achieved major continental success, including winning the Copa Libertadores in 2024, generating substantial prize money and commercial revenues [10] [11].


Financially, the SAF reportedly reduced a significant portion of legacy debt through structured repayment and improved cash flow. Revenue growth was driven by international exposure, player trading, and integration within the Eagle multi‑club ecosystem [12] [13].


In 2025–26, Eagle Football Holdings faced a major financial crisis after taking on heavy debt to buy Olympique Lyonnais, leading to defaults and the appointment of administrators at its UK holding company. John Textor lost control at group level but remained involved in Botafogo’s daily operations.

 

Although Botafogo SAF is legally separate, Brazilian courts found financial links between the clubs and froze Eagle’s shares in Botafogo to protect creditors and sporting stability. The resulting disputes have made Botafogo a key test of whether the SAF model can protect clubs from financial problems spreading within heavily indebted multi‑club ownership groups.

 

Emerging Legal and Regulatory Tensions

Despite these successes, Botafogo’s SAF has also highlighted systemic vulnerabilities within the new regulatory framework. By 2024–2025, disputes emerged between the club association and the controlling shareholder concerning investment obligations, governance autonomy, and asset protection. Litigation and judicial oversight were invoked to safeguard the association’s residual interests and ensure compliance with contractual commitments [14] [15].


These developments underscore two broader regulatory challenges:

  1. Asymmetry of bargaining power in SAF transactions concluded under severe financial distress; and

  2. The absence of standardized investor suitability tests, minimum capitalization rules, or sector‑specific financial fair play mechanisms at the national level [16] [17].


Assessment

Botafogo illustrates both the transformational potential and the regulatory fragility of the SAF model. The case demonstrates how private ownership can rapidly restore competitiveness and commercial relevance, while simultaneously exposing clubs to new forms of dependency on individual investors and transnational ownership structures.


As an empirical reference point, Botafogo suggests that:

  • the SAF is highly effective as a financial rescue and investment vehicle;

  • but remains incomplete as a sports governance framework without complementary regulation on ownership concentration, investor obligations, and long‑term financial sustainability.


6. Conclusion

The SAF model introduced by Law No. 14,193/2021 is the biggest change to football club ownership and governance in Brazil since the sport became professional. It allows clubs to separate football activities from member‑run associations and to bring in private owners. This has helped address long‑standing problems such as limited access to investment, high debt, and weak management accountability. Legally, the model brings Brazilian football closer to international corporate standards, while still keeping rules that reflect the specific economic and cultural features of the sport.


The Botafogo case shows both the benefits and the risks of the new SAF system. On the positive side, Botafogo SAF shows how private ownership, combined with good management and investment, can quickly improve results on the field and stabilize finances. The club’s return to success in domestic and continental competitions highlights the SAF’s value as a way to rescue struggling clubs and reconnect them with global football markets. From a governance point of view, the move to a company structure also brought greater transparency, professionalism, and long‑term planning than was possible under the old member‑run model.


Botafogo also shows where the SAF system still falls short. Control concentrated in a single investor within a global multi‑club network has led to governance disputes, court cases, and concerns about regulation, investor responsibility, and the protection of the original club. These problems reflect the imbalance of power when financially distressed clubs convert to SAFs, as well as the lack of clear rules on investor suitability, minimum funding, and long‑term financial sustainability.


More generally, Brazil’s experience shows that the SAF is not a complete fix for long‑standing problems, but a framework that needs stronger supporting rules. Without proper financial oversight, competition controls, and clear limits on multi‑club ownership, clubs remain vulnerable to financial instability and competitive imbalance. Botafogo illustrates both the potential of the SAF system and how weak regulation can quickly undermine it. The SAF regime is therefore still an experiment, and its future will depend on whether lawmakers and football authorities can balance private investment with sporting integrity, fair competition, and long‑term financial stability. 


 
 
 

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