Believing is magic!

This is an extended version of two editions of FLUCONOMiCS on associative models in football, initially posted in September and October of 2021. The editions were condensed, and I made some adjustments, including new content in this current version (December 2022).

Despite using my vast experience with football clubs in Brazil to create this analogy, everything written throughout this post applies to clubs worldwide.

“Michael Caine”

Let’s imagine that at birth, I was breastfed with Coca-Cola. 

All of my birthdays have had Coca-Cola as a theme!

I spent my entire childhood and adolescence drinking Coca-Cola, getting together, and playing with other friends who only loved Coca-Cola.

I always dreamed of having a Coca-Cola machine at home. I thought it was pure magic during my childhood, deluding myself that it was an endless supply of Coke. After visiting the US and seeing that they had several other products worldwide, I dream of having that machine with different flavors from the World of Coca-Cola.

Now I have become an adult, drinking almost three liters of Coca-Cola 24/7, three hundred sixty-five days a year.

I love it when Coca-Cola has special sales on the market.

I collect the old glass bottles. I have some cans —special editions related to the Star Wars saga.

I drink all the different flavors, Vanilla Coke, Cherry Coke, Lemon Coke, Zero, Diet, Light, Double Zero, caffeine-free, more caffeine, custom Coca-Cola from Universal Studios Florida, etc. Even the first version of Coke Zero, which was horrible, I loved it passionately.

I love it even more, when they sell Coca-Cola on the market with freebies: t-shirts, glasses, cups, and caps. I participate in all the drawings to win anything with the Coca-Cola logo. When I travel and pass by one of the shops that sell Coca-Cola clothes, I want to buy everything, and I keep thinking that I should get it for free because of the high volume I consume and my love for it. 

I became a Coca-Cola influencer on social media. Now I have my product line exploring drinking Coca-Cola, hugging the polar bear, and creating the catchphrase “I breathe Coca-Cola 24/7”. I’m producing t-shirts with this very creative slogan. Coca-Cola dominates my life!

My friends and I decided that we needed to seize power. After all, we are the Coca-Cola Co. Some of them have made entire web pages about everything related to Coca-Cola. I think it’s excellent, even though some of these websites take years to upload because they’re filled with Google ads. 

We are now a virtual organization with members from all walks of life. We have an email group, a WhatsApp group, and a Telegram group (sometimes WhatsApp is down, and we can’t stop a minute from talking about Coca-Cola). We also created a committee of elected representatives. Everyone dreams of becoming the company’s CEO, and we are running a campaign: every three years, Coca-Cola elects a different president among its genuine and loyal consumers. According to our strict assessment, they can be reelected for another three years if they perform very well, or in other words, pleases the actual authentic and reliable consumers. It is necessary to democratize power, and everyone has the right to access their share of the billions in revenue that Coca-Cola collects. For this, it is just required to keep regular consumption and not default at the supermarket.

Down to Earth…

What would happen if Coca-Cola listened to these incredible demands and exchanged all its governance, controls, staff recruitment, and evaluation criteria for supposed selfless consumers? It would be a mere matter of time before we were doomed to consume Pepsi. It would be better to hope for a meteor to destroy life on Earth than live without Coca-Cola.

Without forgetting, of course, those who would die to drink Coca-Cola in heaven.

This story sounds like complete nonsense. It?

But that’s what happens in football clubs with associative models.

Eventually, someone selfless may appear who won’t break Coca-Cola, but that would be a point entirely off the curve.

Associative models were born together with football in Brazil and around the world. They prevail for so long as a result of a multitude of factors. It is utopian to think that they will cease to exist someday and that every football club will be a company. Some corporate football companies are the associative model’s wolf in sheep’s clothing, in this case, executives from the soccer market or renowned executives who have dedicated part of their time or fully migrated to football. In practice, it is the same, a kind of redesigned associative model, subject to elections, political groups, unpaid work, etc.

There are also cubs with owners, which function as a company in certain aspects and as associative models with patronage in others. Football is a highly peculiar line of business. Believing that it can be managed the same way as a corporation as it is an elementary mistake.

More pop culture…

The full professionalization of football has numerous barriers. The main one is the insertion of business models within these federations. 

A good analogy for federations is the elders of the 300s movie. Leonidas tries to do everything right. Based on his convictions, he has the best warriors and ends up pierced and killed with his 300 guys, betrayed and sabotaged by these dammed elders and related corrupts.

If behaving like a Spartan sounds pejorative in today’s world, the concept has been distorted and conflicted with the demand for a more flexible posture and a greater propensity to adapt to the environment in which you live. 

Leonidas, in football, would be compared to a nun in the brothel. And there would be no shortage of people to say he was playing the role of a nun. After all, this is a common expedient among the leaders of associative models: creating images of perfect and fair managers.

Amateurs and passion “management” as fuel to the attractiveness

In a way, associative models guarantee the beauty of football. 

If we talk about a professional structure, it is already highly complex to maintain a football club’s performance and recurring achievements. Through the associative models, we can ensure that every holy team will have its ups and downs, being systematically sabotaged by its amateur managers in some management cycle.

Of course, the ideal scenario would be a football club with well-defined owners and solid governance structures, with lucrative leagues and tournaments. The dispute is limited to details. But this is far from happening anywhere on the planet.

On the other hand, the bill for amateurism has already arrived in the most messed up associative models in more flawed markets. And it was aggravated by the pandemic.

The symbiosis

Brazilian football has always been a kind of symbiosis: the beauty and attractiveness of the sport are linked to associative models and their various aspects. It has always been mutually beneficial as clubs have lived in a parallel reality for decades. They did not undergo inspections, were not appropriately taxed, evaded, and did not fulfill their obligations, and all this mess did not result in any significant problems.

Making football was relatively cheap until the 70s, and with the lack of control and supervision, no elements put Brazilian football at risk. Brazilian football dominated the industry in several aspects, with the best players, winning more cups than other countries, and having very competitive teams and a strong and feared National team.

Almost all experts in the football industry in Brazil attribute the Pelé Law to the inflection point of Brazilian football regarding its domain and the beginning of the club’s insolvency process.

They think that the end of the infinite control over the rights of athletes has completely changed the distribution of power, impoverishing clubs and making them hostage to players and agents, putting them at the mercy of the economic power of European teams. A good part of this submission to European teams is due to the exchange rate, which persists until now with the Real super devalued.

I consider this, at best, myopia. 

I suspect this narrative is used as a smokescreen to take the focus off countless activities outside of football that consume millions and millions and bring no return. 

In Brazil, we express this: “putting a goat in the living room.” I searched for the English equivalent but didn’t find anything suitable. The central idea is the absurdity of having a goat in the middle of your living room, diverting the focus from all the real problems around you.

My reading of the decline of Brazilian football is quite different and contradicts the version propagated by associative models and their experts. 

Football began to get more expensive in that first wave of purchases from players worldwide for Italian football. Much more money began to enter Brazilian clubs, and expenses grew.

Sales are extraordinary income. In most cases, recurring expenses are tied to medium and long-term contracts.

The acquisition boom spread to other leagues even before the enactment of the Pelé Law in 1998. It’s okay that the Law implodes the abusive ballast that clubs had on players’ federative and economic rights, but this leads us to think that it is just the icing on the cake that had already been deflated.

We also created the “Clube dos 13” in 1987, positively impacting TV rights. Again, more money coming in, more spending. It always works like this in 99.9% of clubs. 

The TV rights are current income, but as more was spent than was collected, we started to observe the infamous advance of this revenue. It was a snowball, with many sinister behind-the-scenes stories, like currency indexing, abusive interest rates, and weird debt confessions.

Before the Pelé Law, clubs had already built their time bombs. This Law is that an unlucky guy in a slapstick movie will try to defuse the bomb and ends up accelerating the countdown. But the Law has great merit, and as it ended an extremely abusive control over athletes’ rights, it was no exaggeration to compare it to a modern form of slavery.

Collecting data on the club’s financials and balance sheets from that era is useless. And deadly for anyone suffering from any allergy.

The financial statements of football clubs began to be audited on a mandatory basis only in 2006 if memory serves me correctly. As a result, the clubs go through the first significant program to redeem their debts, at times predominantly in public affairs. We have the adhesion to TIMEMANIA and absolute proof that all those balance sheets, and annual reports, informed, voted, and approved by associative models and their councils, had millions and millions in omitted liabilities (not recognized/recorded in the balance sheets). 

Just consult the debt consolidation statements at adhesion, composed of taxes and fiscal years of origin, to see how this process of calculating balances, results, and approvals never served any purpose.

Relying on these audited balance sheets as of 2006 is also highly complicated.

At this point, much more was spent than collected. And the expense was not even entirely aimed at football. Social and Olympic activities consumed much of the surplus generated in the soccer market. Backoffice expenses were still developing, even though few managers were already paid well above the market average.

The wave of “professionalization” of management, with an increase of millions a year in Backoffice activities, comes in the wake of the implosion of “Clube dos 13”. TV rights and sign-in bonuses show a colossal growth in the clubs’ revenues. As I’ve been writing, more money, more spending. Much more money? Total financial mess regarding operational deficits.

Game-change: the parasitism.

Thus, the symbiosis changed the relationship between football and the model. We started to observe parasitism. Associative models that are increasingly greedy and costly are increasingly withdrawing resources from football.

It’s not much use just talking about this topic. You must come up with numbers, compare clubs, and show what’s happening worldwide. Associative models are harmful to any football club anywhere on the planet.

About Coca-Cola

I like Coca-Cola a lot, but it was only used to illustrate the absurd situation of associative models in football clubs, especially in Brazil. I hope they won’t be upset about it. Coca-Cola did not pay a penny for all my love in this issue; they don’t need to!