Coritiba takeover by Treecorp Partners continues Brazilian soccer investment momentum

Jun 13, 2023

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Private equity firm Treecorp Partners has agreed to buy Brazilian top-flight soccer club Coritiba in a deal valued at about BR$1.3 billion (US$260 million).

The acquisition will see Sao Paulo-headquartered Treecorp own 90 per cent of the Campeonato Brasileiro Série A outfit.

Of the enterprise value of BR$1.3 billion, BR$270 million (US$54.1 million) will be used to pay off Coritiba's debts and BR$100 million (US$20.1 million) will be spent on renovating the team's training centre. BR$450 million (US$90.2 million) has also been allocated for day-today operations and BR$500 million (US$100 million) has been set aside to modernise the club's stadium.

Treecorp's takeover follows City Football Group's (CFG) acquisition of Esporte Clube Bahia earlier this month. The Manchester City owner has reportedly taken a 90 per cent stake in Bahia in a deal worth BR$1 billion (US$200 million). February 2022 also saw Miami-based alternative investment firm 777 Partners buy into Brazilian soccer when it took a controlling stake in Vasco da Gama.

Treecorp's deal is the latest in a wave of recent investments into what is by far and away Brazil's most popular sport.

There have been several reasons for the surge in interest. New laws have been introduced enabling domestic clubs to be run as limited liability companies controlled by external investors, opening the door for new financial backing.

Brazilian soccer also boasts massive, iconic teams and an ardent fanbase, providing ample commercial opportunity. Clubs also regularly produce top talent which can be sold on to European sides for mammoth fees. For example, Vinícius Júnior joined Spanish giants Real Madrid from Flamengo in 2018 for a reported fee of €46 million (US$50.4 million).

Beyond that, clubs in South America, including Brazil, are generally cheaper to operate than in Europe's ‘big five’ leagues thanks to more modest wages and lower administrative costs. The market is also underdeveloped compared to European top tiers, meaning there is plenty of growth potential.

The Brazilian top flight is at critical juncture. The Liga Forte Futebol (LFF) project is going up against the Brazilian Football League (Libra) to launch a new domestic soccer competition. The former is backed by US investment group Serengeti Asset Management and venture capital firm Life Capital Partners. United Arab Emirates (UAE) investors, meanwhile, have been linked with a deal for a stake in Libra.

More money than ever is flowing into Brazilian soccer. It is not a guaranteed winner, though, in part due to the country's volatile economy. Even so, the domestic game is bracing itself for seismic change.

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