Flamengo presents a financial fair play proposal to the Brazilian Confederation. Vasco believes that the measures that make the clubs’ recovery unviable

Flamengo is actively involved in the construction and submitted its restriction points, which were already announced on the eve of the meeting. It focuses on governance and transparency in football, as well as the punitive aspects of clubs that do not adhere to the rules.

The Deputy Head of Administration, Marcos Motta, is responsible for taking the red and black interests and discussing them in the working group. Among the topics discussed are the proposed restrictions on clubs subject to judicial recovery. Vasco, in one, didn’t like it.

According to Flamengo, the remedy aims to prevent clubs from exploiting the period of non-payment of debts (between the RJ/REJ decree and the approval of the agreement) as a competitive advantage, preventing the registration of new athletes during this period and the possible loss of points.

In Vasco, the understanding is that the proposal does not value the recovery of Brazilian football. Sources from the Sao Januario club state that Flamengo also used judicial procedures when it was in the financial recovery phase, and paid off debts through labor law.

The model allowed debts to be renegotiated with players, such as Ronaldinho Gaucho. In Vasco, judicial recovery by the list of creditors was also approved through the courts. A renegotiation model has also been discussed recently at Corinthians, who were subject to a FIFA transfer ban for failing to make payments for a series of signings this year.

Transition and control period

The Brazilian Confederation will present the model that has been developed so far, through the leadership of Vice President Ricardo Gluck Paul. The conclusion of the document will be presented at the summit to be held on November 26 in Sao Paulo. There have been face-to-face and remote meetings and questionnaires, and this document will continue to be analyzed and refined by the clubs.

Among the CBF’s proposals, there will be a system for clubs to inform the entity about salary payments and transactions, to prove the club’s authenticity. Anyone not on this path may receive a penalty. Which ranges from a transfer ban to a loss of points and, at the maximum, relegation from the Brazilian Primera Division.

The idea of ​​the Brazilian Football Confederation is not specifically intended to promote collapse. Therefore, there will be a transitional phase that takes into account the current situation of the clubs. After a period of adjustment, they will be subject to the demands and therefore penalties of the financial regulatory system.

Check out some suggestions from Flamingo:

•Treatment of clubs in RJ/REJ: Preventing clubs from using the period of non-payment of debts (between the RJ/REJ decree and the approval of the agreement) as a competitive advantage, and preventing new athletes from registering during this period and losing points.

• Broad definition of costs: Control not only the “salary bill” (CLT), but also the total cost of actors, including image rights, gloves, bonuses, agent commissions and taxes.

• Closing accounting loopholes: Prevent costs of men’s professional football from being “fake” as investments in youth teams or women’s football through fictitious distributions.

•Minimum cash control: Implement leading indicators, such as the need for sound working capital, to prevent liquidity crises.

• Related party transactions: Ignoring or restricting transactions between related parties (eg a club and a company with the same owner) that may inflate revenues or hide costs. For example, capital contributions should not be counted as recurring revenue.

•Use of rankings: Adopting a ranking system (such as that used by specialist consulting firms), where better-managed clubs (higher rankings) have more room to manoeuvre, creating an incentive for good governance.

• Effective penalties: Focus penalties on restricting transfer periods, and adhere to them in full, even if the reason for the penalty has been remedied, to discourage procrastination.

•Implement the “Owners and Managers Test”: Create an assessment consisting of rules and criteria to determine whether the new (or potential) owners and managers of the club are suitable for the position. The aim is to protect the image and integrity of the competition and the clubs, and to ensure that the individuals who manage or own the clubs are trustworthy and have proven financial capabilities.

• Feasibility of an effective system: Implement governance equipped to implement automatic sanctions, based on factual and financial data, including the application of sanctions and restrictions.