Brazil soccer clubs poised for gold rush to reduce gap to Europe's elite

SAO PAULO : A new law allowing soccer clubs in Brazil to seek outside investment is attracting hundreds of millions of dollars to a country renowned as football's biggest source of talent, a change that could see Brazilian teams rival Europe's top tier.

The surge of fresh, mostly foreign, cash coincides with an agreement last May by Brazil's largest clubs to create a league modeled on Britain's Premier League that will centralize talks to sell transmission rights and marketing contracts.

Together, the recent developments have spawned a funding bonanza for the Brazilian teams, which have long been fan-owned operations closed to outside investors.

That may allow Brazil - the world's largest exporter of footballers - to keep its best players in the country longer and charge higher fees for talent that does move overseas.

The biggest deal in the works is for a 51 per cent stake in Brazilian league champion Atletico Mineiro, according to two people with knowledge of the matter, who said the club had met with dozens of investors. The deal could fetch 1 billion reais ($200 million), one of the people said.

The people requested anonymity to disclose private discussions. The club did not respond to a request for comment.

Guilherme Avila, sports investment banking partner at XP, a Brazilian broker, predicted that at least 10 fan-owned Brazilian soccer clubs will become investor-owned companies over the next two years.

In December, the sale of second-division club Cruzeiro to retired Real Madrid and Brazil striker Ronaldo became the first deal to take advantage of the law, approved roughly a year ago.

Deal for Rio de Janeiro's cash-strapped Botafogo followed earlier this year. Its crosstown rival Vasco da Gama was sold this month.