How important are state-owned companies to Brazilian cultural investments?

. Feb 08, 2019
petrobras brazilian culture Rio's Film Festival

Besides being a symbol of national enterprise, state-owned oil giant Petrobras is also seen as an important cultural patron in Brazil, supporting initiatives related to performing arts, music and audiovisual art. But, according to President Jair Bolsonaro, who has ordered a review of the company’s sponsorship program, the state has “higher priorities” and sponsoring cultural ventures should not be the responsibility of state-owned companies. The question is: who is going to fulfill this role now?

On Wednesday, Mr. Bolsonaro took to Twitter to say that he ordered a “review of sponsorship contracts,” adding that investments in the last few years have reached over than BRL 3 billion, without naming Petrobras directly. He also defended that investments must happen in a “fair, streamlined, clear and responsible way”.

</span></p> <p><span style="font-weight: 400;">Petrobras is not the only company in the country to provide cultural sponsorship. The biggest programs are run by other state-owned enterprises as well, such as national post office company Correios, and public banks Caixa Econômica Federal and Banco do Brasil. The latter has four cultural centers in major Brazilian capitals, including one in Brasília, where Mr. Bolsonaro installed his transitional cabinet. </span></p> <p><span style="font-weight: 400;">Petrobras alone has been responsible for sponsoring more than 4,000 cultural initiatives since it created the Petrobras Cultural program in 2003, as recalls newspaper </span><a href=",petrobras-avalia-cortar-patrocinios-culturais,70002711112"><i><span style="font-weight: 400;">Estadão</span></i></a><span style="font-weight: 400;">. </span><span style="font-weight: 400;"><br /> </span><span style="font-weight: 400;"><br /> </span><span style="font-weight: 400;">Currently, it sponsors three of the main Cinema Festivals in Brazil, as well a Symphonic Orchestra and the Deborah Colker dance studio, among other projects related to environmental actions and sports. In January, Petrobras had a total of BRL 453 million tied up in sponsorship contracts valid until 2021. Consulted by </span><b>The Brazilian Report</b><span style="font-weight: 400;">, Petrobras did not answer if whether it would keep or change these contracts.</span></p> <h2>Political influence</h2> <p><span style="font-weight: 400;">But critics claim that there were many political influences directing the funds and little actual gain for the sponsoring companies. A 2017 </span><a href=""><span style="font-weight: 400;">study</span></a><span style="font-weight: 400;"> by weekly magazine </span><i><span style="font-weight: 400;">Época</span></i><span style="font-weight: 400;"> shows that, between 2012 and 2016, state-owned companies spent BRL 1.86 billion on sports sponsorships; only two out of seven conducted some kind of monitoring to see if they were receiving a return on investment.</span></p> <p><span style="font-weight: 400;">Currently, public bank Caixa Econômica Federal is the shirt sponsor of a whopping 24 Brazilian football clubs. In early 2017, the bank&#8217;s logo was emblazoned on the kits of no less than 17 of the country&#8217;s 20 top-flight clubs. These sponsorship contracts — worth BRL 192 million in 2018 alone — are not expected to be renewed, and the bank has already requested clubs remove the Caixa logo from their jerseys.</span></p> <div id="attachment_13956" style="width: 710px" class="wp-caption alignnone"><img aria-describedby="caption-attachment-13956" loading="lazy" class="size-full wp-image-13956" src="" alt="caixa petrobras futebol" width="700" height="448" srcset=" 700w, 300w, 610w" sizes="(max-width: 700px) 100vw, 700px" /><p id="caption-attachment-13956" class="wp-caption-text">Flamengo (red) and Corinthians (white)</p></div> <p><span style="font-weight: 400;">Data from the most recent Petrobras’ balance sheet shows a total of BRL 490 million spent on institutional relations and cultural projects between January and September of 2018. The amount hovered around BRL 800 million for 2017 and 2016. </span></p> <p><span style="font-weight: 400;">Since the election campaign, the president has been promising a </span><a href=""><span style="font-weight: 400;">review of cultural management in the country</span></a><span style="font-weight: 400;">, and although saying that the culture must be valued, he did not immediately present alternatives to continue supporting cultural projects. As a matter or a fact, he is a fierce critic of </span><a href=""><span style="font-weight: 400;">another possible source of cultural financing in Brazil, the Rouanet Law</span></a><span style="font-weight: 400;">. The bill was passed in 1991 to encourage private support for the arts by providing tax incentives for companies who invest in cultural projects.</span></p> <p><span style="font-weight: 400;">The new government did not include specific actions for culture on its list </span><a href=""><span style="font-weight: 400;">35 goals for its first 100 days in power</span></a><span style="font-weight: 400;">. The culture department has lost the status of cabinet ministry under Jair Bolsonaro’s government. The agency is currently conducting a public consultation to elaborate a new decree regarding the national council of cultural policy (CNPC), responsible for proposing public policies to develop cultural activities in the country.

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Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Before joining The Brazilian Report, she worked as an editor for Trading News, the information division from the TradersClub investor community.

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