Find out how a Club-Company works and why it's such a popular form of management in the football world today.
Much has been said about the various managements and boards that exist in the world of football, and some say that Europeans have far superior management compared to teams in Brazil, but is this really true?
The way a club is managed is often the key to its success. Good management can bring many titles, victories and even greater visibility to a football team. And more wins is also synonymous with more profit for the club. In other words, everything revolves around good club management.
One of the most talked about models, and currently one of the most successful in the world of football, is the Club-Company concept. This model is nothing more than an association of companies that decide to invest collectively and the club's management decides how to allocate these resources.
The aim of the Club-Company management model is to maximise financial returns and diversify risks through a joint investment strategy.
Unlike the traditional model, which relies on just one or a few managers, the Club Company model is managed by a board made up of representatives from all the investing companies.
To find out more about the difference between the conventional management adopted by Brazilian teams and the Club-Company model, we've put together some important comparative information to clear up some doubts about these different management models.
How does the management of a Brazilian Conventional Club work?
In the context of the Brazilian management model, we are very familiar with the club structure, which basically functions as a non-profit civil association. However, it is important to emphasise that this nature does not prevent these entities from making a profit.
Clubs are made up of a community of members who elect a president and a board to manage the team, with the length of their term varying according to internal rules.
In Europe, only a handful of elite football clubs have adopted this system, including the Barcelona and Real Madrid. This raises the question: why don't Brazilian teams adopt the corporate club model on a large scale? Why don't they follow the example of English football?
How does the management of a Club-Company work?
Basically, a corporate club is a profit-focused entity, different from traditional non-profit sports clubs. The idea of turning all Brazilian teams into company clubs has been discussed before, but there are several points to consider before a decision is made.
In theory, converting a club into a club-company by going public would allow shareholders to invest in the team, generating more resources to resolve large debts and providing other benefits, such as ease in refinancing debts and support in judicial recovery processes.
On the other hand, by becoming a corporation or limited company, a corporate club is obliged to make a profit to satisfy its shareholders, which means paying more tax than a non-profit club.
In addition, managers would have to regularly disclose financial data and could be punished for irregularities, which may not appeal to Brazilian managers.
This radical change in management also implies a series of other demands and sanctions that clubs would have to face in order to adapt to the new model. Given the often delicate financial situation of Brazilian clubs, this transition could represent a significant challenge.
Although the idea of a club-company may seem promising in the future, perhaps Brazilian clubs are not yet ready to face this transformation, especially considering the dependence on factors such as structure, innovation and sporting results to generate profit.
Read also: European teams on the stock exchange
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