Brazilian Football Law 14.193/2021 and the SAF Model
For decades, the structural foundation of football in Brazil remained largely unchanged, with most clubs operating as non-profit civil associations. While this model provided tax exemptions, it created significant barriers to professional investment and financial modernization. This changed with the enactment of Law 14.193/2021, a landmark piece of legislation designed to transform the business of Brazilian football.
The Transition from Associations to Companies
Prior to 2021, the non-profit status of Brazilian clubs meant they could not be sold to investors. Law 14.193/2021 introduced a legal framework allowing these clubs to transition into companies, specifically through the SAF (Sociedade Anônima do Futebol) model. This shift allows clubs to attract new investments and issue securities regulated by the CVM (Comissão de Valores Mobiliários), Brazil's securities and exchange commission.
Beyond attracting capital, the law provides a centralized regime for indebted clubs. This mechanism allows clubs to organize and pay their creditors more effectively, offering a path toward financial sustainability.
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Historical Context and Pre-existing Models
While the SAF model is now the primary vehicle for corporate transition, some clubs had already adopted corporate structures. For example, Red Bull Bragantino opted to remain as a public limited company, and Cuiabá Esporte Clube operated as one before eventually transitioning to a SAF.
The Intellectual Origins of the Law
The legal framework was not created in a vacuum. It was based on a comprehensive study by lawyers Rodrigo Monteiro de Castro and José Francisco Manssur. Their 2016 book, Futebol, Mercado e Estado (Football, Market and State), analyzed the business structures of Brazilian football and compared them with international models to identify necessary improvements.
The Legislative Journey
The path from a theoretical study to national law involved several key political figures and legislative steps:
- 2019: Senator Rodrigo Pacheco presented the study to the National Congress, leading to the creation of Bill 5.516/2019.
- June 10, 2021: The bill was reported to the Federal Senate by senator Carlos Portinho and approved.
- July 14, 2021: Following a report by congressman Fred Costa, the Chamber of Deputies approved the bill with a decisive 429–7 vote.
- August 9, 2021: President Jair Bolsonaro sanctioned the bill, officially establishing Law 14.193/2021.
Key Facts
- Law 14.193/2021 allows Brazilian football clubs to transition from non-profit associations to corporate entities.
- The law enables clubs to issue CVM-regulated securities to attract investment.
- It establishes a centralized regime to help indebted clubs settle payments with creditors.
- The legislation was based on the 2016 book Futebol, Mercado e Estado.
- The bill passed the Chamber of Deputies with an overwhelming 429–7 vote.
| Milestone | Detail | Date/Reference |
|---|---|---|
| Foundational Study | Futebol, Mercado e Estado | 2016 |
| Bill Introduction | Bill 5.516/2019 (Rodrigo Pacheco) | 2019 |
| Senate Approval | Reported by Carlos Portinho | June 10, 2021 |
| Chamber Approval | Reported by Fred Costa (429-7 vote) | July 14, 2021 |
| Sanction | Signed by President Jair Bolsonaro | August 9, 2021 |
Frequently Asked Questions
What was the status of Brazilian football clubs before 2021?
Most clubs were structured as non-profit civil associations, which meant they were exempt from certain taxes but could not be sold to private investors.
What is the primary purpose of Law 14.193/2021?
The law provides a legal framework for clubs to transition into companies (SAF), allowing them to attract new investments, issue regulated securities, and manage debts through a centralized regime.
Who were the primary authors of the study that influenced this law?
The law was based on a study by lawyers Rodrigo Monteiro de Castro and José Francisco Manssur, published in their 2016 book Futebol, Mercado e Estado.
Did any clubs use a corporate model before the SAF law?
Yes, some clubs like Red Bull Bragantino and Cuiabá Esporte Clube were structured as public limited companies prior to the introduction of the SAF model.
How was the bill received in the Chamber of Deputies?
The bill received strong support, passing with a vote of 429 in favor and only 7 against on July 14, 2021.