Brazilian football faces crisis as sponsors cut and run

Hello, and welcome back to the Brazil Sports newsletter. Isolation continues, and new developments with sponsors and broadcasters but the survival of a number of Brazilian football clubs at even more risk. Plus, with sports channels replaying classic matches to fill airtime, we take our own trip down memory lane and recount the tale of the 1970 World Cup Final.

Can Brazilian football survive the Covid-19 pandemic?

We mentioned in recent weeks that only a handful of Brazilian clubs had the cashflow necessary to weather the Covid-19 storm and the loss of revenue it will cause. The outlook has gotten even worse, however, with news that sponsors and broadcasters are planning on pulling funding.

TV money. Brazilian broadcasting giant TV Globo has announced it has indefinitely suspended payments of broadcasting rights money for the country’s state championships, which have been interrupted and may go unfinished. Even for Brazil’s biggest sides, TV money represents a massive proportion of overall revenue, particularly at a time when gate receipts are nonexistent. For smaller sides, it is practically their only source of income.

TV money 2. Beyond Globo, competitor Turner has sent a letter out to the eight clubs with which it has individual broadcasting agreements for the Brazilian championship, stating that negotiations will get underway to terminate these contracts. In 2019, Turner broadcast matches from the national championship on its digital channels Esporte Interativo, TNT, and Space. Reportedly, however, the American company is no longer satisfied with its viewing figures and revenue.

Cut and run. Beyond broadcasting rights, football clubs in Brazil rely on the support of myriad sponsors, each paying for a little scrape on teams’ increasingly overcrowded jerseys, and often doing so in short-term contracts. For the vast majority of these companies, the only way they will see a return from these investments is from exposure on television. Without games, there is no reason for them to pump money into sponsorships.

Crying over spilled oil. A report from newspaper Estadão shows that olive oil company Azeite Royal is planning to ditch its sponsorship contracts of Rio de Janeiro’s big four sides, while Corinthians and Santos have also lost investment from firms affected by the Covid-19 pandemic.

Amazon. The coronavirus outbreak may also have nixed a potentially huge sponsorship deal between e-commerce giant Amazon and Brazilian champions Flamengo. Globoesporte reported in March that the two parties were close to signing a...