Cruzeiro was contacted by Cade for information about the club’s sale

CADE (Administrative Council for Economic Defense) asked Cruzeiro for information about the sale of the clubs and could fine them up to R $ 60 million for executing the transaction without previously notifying the antitrust agency. The same criteria applies to Botafogo.

Vasco was also sent a letter with a request for clarification, even if the transaction involving the carioca team has not yet been finalized. The three clubs will have to submit the information early next week.

According to antitrust legislation, so -called mergers, acquisitions, mergers, associative contracts and other operations must be submitted to a prior board review in which at least one of the groups involved has gross annual revenue or business volume. country equal. of or more than R $ 750 million.

In addition, the other business party must have registered revenues or transactions equal to or greater than R $ 75 million.

Failure to comply with the prior notification requirement means penalties such as fines, ranging from R $ 60,000 to R $ 60 million. An administrative proceeding to investigate violations of economic order could also be initiated, and the operation is in danger of being annulled.

Despite the law being applied to companies, there is debate as to whether football clubs should comply with this rule.

Currently, teams are mostly non-profit associations. A law passed last year by Congress and approved by President Jair Bolsonaro (PL), however, now allows the conversion of a club to the SAF (Sociedade Anônima do Futebol)-also known as company-club.

In the migration process, SAFs have owners or investment partners. Cruzeiro and Botafogo have already adopted the model, allowing for the sale of control to the teams.

Cruzeiro sold SAF to the club in a group led by former player Ronaldo. American businessman John Textor, a partner of Crystal Palace (ING), bought 90% of SAF do Botafogo, with the promise of making a R $ 400 million investment.

In Vasco’s case, the club closed a deal with the United States for the sale of 70% of its future SAF. The change is not yet complete. For R $ 700 million, the percentage will have to be negotiated with the American fund 777 Partners.

In the understanding of the competition authorities, who were interviewed privately in the report of Folha de S.Paulo, a literal interpretation of the law may exclude clubs from antitrust rules. However, CADE can make a more flexible analysis of competition law.

Preliminarily, it can be verified that, upon becoming an SAF, a club can be automatically notified to CADE. However, since this is a new topic, the issue still needs to be analyzed to establish an understanding of the body.

According to one of the authorities, it should be considered that clubs are exploring an important economic activity for society, where millionaire transactions are made. Even if SAF law has a provision prohibiting the controlling shareholder of a club company from having a stake in another company-club, this authority says, the risk of competition cannot be completely eliminated.

The central question is: what if control of an SAF was sold to a business group that had shares in another team? In this case, CADE consultants assess, barriers to competition can be created in the sport market, reducing competition and bringing losses to the consumer.

There are also concerns about cross-sponsorships between clubs.

From the three clubs, CADE requested copies of contracts and detailed transaction information, such as who the buyers were and the corporate structure of the SAF, before and after the transaction. The body also wants the list of direct and indirect shareholders and quotaholders.

Among other data, the list of companies in which the SAF has a stake of more than 20% in Brazil, the gross income of all involved in the country, in addition to all the product lines and services offered by the club where they can be there. overlaps with the buyer group.

Refusing, deleting or delaying the data requested by CADE may result in a penalty with a daily fine of R $ 5 thousand, which can be increased up to 20 times.

the report on THE TIME SPORTS contacted Cruzeiro, who confirmed Cade’s notice and responded to the agency’s request and answered questions.

Asked about the Folha report, Botafogo said Cade was looking for it and that it would provide answers within the set deadline.

Vasco said he was still on time to respond and negotiations to sell the SAF were still ongoing.

What is the problem that Cade is investigating?

According to competition defense legislation, so -called concentration acts (such as acquisitions or mergers) in which at least one of the groups involved has annual gross sales or business volume in the country equal to or greater than R $ 750 million. The clubs have not previously notified the antitrust body of negotiations to create SAFs.

Should clubs notify Cade?

Even if the law applies to companies, there is a discussion about clubs having to follow this rule.

Are clubs companies?

Teams are usually non-profit associations. A law passed last year by Congress and approved by President Jair Bolsonaro (PL), however, now allows the conversion of a club into a Sociedad Anónima do Futebol (SAF).

Which of the teams reviewed the SAFs?

Cruzeiro and Botafogo became SAF, allowing for the sale of control of the teams.

What are the possible consequences of this first analysis by Cade?

Failure to comply with the prior notification requirement means penalties such as fines, ranging from R $ 60,000 to R $ 60 million. An administrative proceeding to investigate violations of economic order may also be initiated, and the operation is in danger of being annulled. (Folhapress)

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