A new model of football clubs, SAF is starting to become reality – Senado Noticias

Senate advisers clarify aspects of SAF law

JOSE CARLOS SILVERA BARBOSA Jr.

Economic and business nature In general terms, Article 14,193 of August 6, 2021, invented the legal system by treating football not only as a sporting activity but also as an economic component. Other legislation has already attempted to add this business role to football (Lee Giko and Lee Peele), but none has proposed an institutional framework – clear rulesCompliance

Governance and Private Financing – Clubs are capable of generating enough incentive to view themselves as sporting associations (companion model), but as a true tool in circulation of wealth and social development (business model).

Sanitary security of the old club

The idea is to give the SAF a debt-free legal personality to make capital more accessible. In other words, the loan does not belong to the SAF, but to the person who created it – in this case, the former club. However, legal procedures have been enacted to facilitate and accelerate the performance of these obligations, including: a) the receipt of 20% of current monthly income and 50% shareholder remuneration (interest on dividends and equity) along with other proceeds from established SAF contracts; B) the possibility of centralized governance of civil and labor executions, which is a negotiation of unnecessary judicial restrictions and unsurpassed advantages; C) access to judicial or illegal recovery, previously only provided to companies; And d) the possibility of proposing a business of tax liabilities.

Basic Club Management

Law 14.193 of August 6, 2021, deals largely with the Sociedade Anonyma do Futebol. SAF can be created through transformation (for example, it ceases to be civil society and becomes SAF); From the Football Division Division (assets related to football activity are transferred to the SAF); Anyone or in an investment fund initiative; And for the transfer of the club’s assets to pay in SAF’s share capital. It is only later that the club’s participation in the SAF is maintained. In this case, the administration of the club continues as before, the management of social activities, if any. There is no need to talk about bankruptcy or the club’s extinction. The club will continue to bear revenue from its members, contracts and SAF. Governance rules will continue to be provided in the legislation.

Other sports or recreational activities of the original club

According to Art § 2. 1, which provides for the corporate purpose that the SAF must have, not include other sports. Therefore, they continue under the club’s social activities.

A supportive member

The category of member-supporters must not be confused with the members of the club (“associate” should be the correct terminology), or with the shareholder or quotas (business companies). The nature of member-support is highly correlated with joining the incentive program.

Veto on mandatory disclosure of shareholder names

When thinking about providing information to SAF Microsystems, Law 14,193 establishes that any legal entity holding more than 5% or more of SAF’s capital stock must exercise natural control over the data of the natural beneficiary. The concern here lies with the health of a clearly created microsystem. In many economic sectors, there are concerns about who is “the owner of the money” because power relations and decisions are often linked to it. In football, the relationship of power becomes even clearer. The justification for a presidential veto is based on the argument that if the rule is not vetoed, it drives money to invest resources in football. The veto rule provided in SAF is stricter than that provided in corporation law. The norm seems to be in harmony with the microsystem, which seeks to improve transparency and governance in the new corporate genre. However, the lack of transparency does not seem to tarnish the information system that was created, as there is no information about the shareholders of the investment fund, but the SAF must inform the fund’s participation and the data of those who manage it.

Protection against harmful actions by investors

One of the inventions of Act 14,193 of the Law of August 6, 2021, is the issuance of Class A shares, which give the club exclusive, exclusive, non-transferable and irrevocable rights, modified at a minimum of 10%. Capital total or voting membership. In other words, the club will have the final say on matters relating to corporate reorganization, real estate sales and political rights such as intellectual property rights, liquidation, liquidation and extinction. Perhaps this is why 90% of the SAF is sold to Ronaldo Phenomeno. When the club has a lawsuit, issues related to the club’s culture and tradition, such as the change of name, headquarters, and distinction, depend on its decision. In this way, there are procedures to protect the club’s culture and tradition from possible decisions by “new owners”.

Another factor that needs to be addressed is the barriers created to prevent conflicts of interest. One of them, the regulatory shareholders of the SAF, is prohibited from participating in another SAF. Regulated shareholders are understood to have the power to elect the majority of members of management, direct social activities, and guide the operations of company firms. Therefore, Ronaldo, the regulator of Cruziro SAF, will not be able to have a stake, for example, in the Botafogo SAF. If it is not a regulator, only 10% or more holders of capital, it can participate in another SAF, but without voice or voting rights. The idea is to allow investors in more than one SAF to not influence the sporting aspect.

Now, what if Cruziro disputed the championship against Real Valladolid (another club belonging to Ronaldo), or Botafogo against Crystal Palace (another club invested by John Texter)? Brazilian law does not control these situations, as foreign clubs are not SAFs, but provide legal directions. The debate will certainly return to the surface, but everything suggests that the pendulum will turn to competitive protection as it harms regulators ’rights.

Issuing shares on the stock exchange

There is no restriction on the placement of shares in the stock exchange. By the way, clubs have always been able to form corporations, but now the law deals with a particular type of society – SAF. With SAFs, the issue of shares is no different, although some governance restrictions, such as the need for boards of directors and boards of finance, may imply higher costs for smaller clubs – if they are SA, they may not. First, it seems to us that the focus is on cleaning up the management and improving the sources of private financing, in the second moment, it is possible to enter the open market with a more organized and transparent structure. And it should be kept in mind that in governance models such as the SAF, shareholder preference is more common in managing broader and more direct control of clubs rather than crushing capital.

Women’s Football

Title of art. 1 does not explicitly consider the constitution of the women’s team mandatory, but provides that the SAF can organize men’s and women’s football. In item I of item 2, it is clear that the promotion and development of activities related to football practice must take place in both male and female ways. In other words, the need to create a women’s team for each and every SAF indicates the costs of making a small SAF financially ineffective, for example, competing for sectors with less available financial resources. The sector is looking to regulate it and has started with clubs with greater financial and economic potential. By 2019, all 20 participants in the A Series of the Brazilian Championships will have to comply with the Brazilian Football Confederation’s club licensing criteria and maintain a compulsory, women’s football team – adults and youth. As with Rule 14,193, the attention given to women should be highlighted, especially given the priority given to pregnant women in the focus of the death penalty administration and access to the educational and social development program for students enrolled in the public school system.

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