Vinicius Paiva of Flamengorj
All about Flamengo's new and best partnership ever
I'm late, but it's worth it. Incidentally, confirmation of Flamengo's split with Nike (something I've been campaigning for for months) only came last Friday, minutes after I'd already published my column here. Which didn't mention a single line about marketing for lack of anything to talk about, just imagine. On Sunday, Mengão played with the "intermediate" jersey between the old and new supplier, featuring three question marks in the space intended for the supplier's logo, a reference to the three arches of Olympikus, our new sportswear manufacturer. The feeling is that Olympikus itself could barely contain its joy. Well, guess what: that same Sunday, in the sports section of the newspaper "O Globo," the supplier bought a full page, illustrating it with the red-and-black horizontal stripes, the aforementioned "three question marks," and a phrase that said something like "which Brazilian company will outfit the Biggest Club in Brazil?" The goal is to generate doubt, anxiety, even though everyone already knows the lucky winner's name. The numbers for the new deal are impressive, and I'd venture to say it was Flamengo's best ever. Am I exaggerating? Well, maybe. The best in recent years, without a doubt. But even though Flamengo has made sensational moves in the past, I believe it would have been easier to do so when we were, by far and away, the biggest Brazilian club in terms of exposure, returns, and the like. But since the reversal of fortune in the 90s established São Paulo clubs as the golden goose of Brazilian business, dethroning them (especially with such a large margin) has become a feat. In short, within the context I've outlined, the partnership takes on the appearance of a "Chinese deal." Let's look at the (already well-known) numbers: R$20,6 million annually, plus sports equipment (which would bring the partnership to around R$31 million annually – R$173 million at the end of the five-year contract), 10 Fla-Olympikus stores throughout Brazil, and a 2.400-square-meter museum in Gávea. This is what I call "red-and-black social responsibility": doing business while also promoting the most important history in world football! To give you an idea of the scale of the deal, Flamengo has surpassed São Paulo, which, as a two-time Brazilian champion, receives R$15 million annually from Reebok. The difference compared to third-place Corinthians is even starker: they receive only R$5 million annually from the same Nike that once supplied us. Since then, all the other major Brazilian clubs have earned less than R$4 million per year. And this partnership of ours has already begun to revolutionize market values. Palmeiras, jealous, has already announced that it will hold a competition to choose a new supplier (http://maquinadoesporte.uol.com.br/v2/noticias.asp?id=9432)\
The board's bet is that one of Olympikus's greatest strengths, being part of a 100% Brazilian group (Vulcabrás, which also manages Reebok here), is its expertise in Brazil. It's a company whose penetration and reach in the national market are truly impressive. Want to try it out? Go to the company's website (www.olympikus.com.br) and look for the "Where to Buy" section. Unbelievably, a map of Brazil will appear, where you can choose your state, city, and, believe it or not, your neighborhood. It will list every corner store that sells Olympikus. In my city alone (Volta Redonda, with only 300 inhabitants), eight neighborhoods were listed, and many stores I've never actually heard of... which is good. We'll be able to sell everything from the most sophisticated shopping mall stores (or even our own stores that will be built) to the simplest shops close to the people. This is Flamengo, after all.\ Back in the Nike days, I was irritated by the poor navigation and excessive "fireworks" on the official website. I could never find anything there, no stores, no products, no Flamengo references. Those who make too many jokes end up losing sight of the main focus, which is SELLING. And what's more: according to the Máquina do Esporte website, Nike's contract with the CBF earns the confederation US$12 million annually, which at today's exchange rate doesn't even reach R$20 million per season. We've surpassed the national team itself! No wonder our national team remains stuck with this sponsor, who pays them almost as much as Saudi Arabia (!!!!) receives from its unknown supplier... (http://maquinadoesporte.uol.com.br/v2/noticias.asp?id=8409)\ Welcome, Olympikus!\ And know that from now on, it's OLK in the spotlight! And not just in terms of Flamengo merchandise! For example, I really needed a new pair of sneakers, and I wasn't sure which ones to buy. This week, that doubt disappeared. Even before the guys officially debuted as our suppliers, I'm already wearing a beautiful (and affordable, compared to other brands) pair of Olympikus sneakers!
And the split with Nike led Flamengo to reconnect with Warner Bros. to sign a product licensing agreement similar to the one the American company had with São Paulo. With the São Paulo club, the partnership yielded a R$2,9 million initial bonus, plus royalties. At this rate, Flamengo would have added over R$15 million to the club's 2008 budget, despite the projected revenue at the beginning of the year of R$100 million (in 2007, they took in R$90 million). This easily surpasses the century mark and comes very close to the top of the Brazilian rankings for revenue among soccer clubs, which belongs to São Paulo (R$120 million in 2007). However, much of São Paulo's revenue came from player sales (Breno left for US$20 million, if I'm not mistaken). Disregarding this, Flamengo is by far the richest club in Brazil. Even with R$250 million in debt. How ironic, right?
It was in the media this week: “Pelé cites Flamengo as a bad example of administration.”
But it also appeared in Ancelmo Góis’ column, “O Globo” newspaper, 04/06/2008:
“Fla 1 x 0 Pelé
Pelé has been spitting fire at Flamengo's management. In fact, Pelé Sports has just lost a lawsuit against the club over broadcast rights to the former Mercosul Cup, worth R$26 million.
The 18th Civil Chamber of Rio accepted the thesis of Michel Assef Filho, Fla's lawyer, that the club did not owe the King”.
What was the deal, Romário? "Pelé, quiet, is a poet?"
And isn't it true that the team whose fans eat slop and belch caviar made it to the Libertadores final? I've never seen such a shitty team in my entire life. Everything could have gone right for Fluminense. Everything could have gone wrong for Boca Juniors. But everything went right for Fluminense AND everything went wrong for Boca Juniors, simultaneously. Unbelievable. Anyway, on the bright side, if they lose the Libertadores final to LDU at Maracanã, it'll be a Maracanazzo to erase any trace of our Cabañazzo. And it's a Libertadores final, folks! LDU has a team! Besides, Once Caldas already beat Boca Juniors in the final of the same championship... But getting to where they are isn't enough to be treated like a big team. It's a nickname that often transcends results. Just look at what happens to being a small team. Statements from the president of the famous Liga Deportiva Universitária, Rodrigo Paz: "I would have preferred Boca to win. They're a team with tradition, a world-class team." For him, the Argentine team deserved the victory at Maracanã because "they attacked more, dominated the match, and created scoring chances." "But I'm content with Fluminense's qualification, especially because I think Boca is the better team." I'm with you and I'm not giving up. It's Fla-LDU!
Corinthians x Sport\ Attendance: 63.871 paying spectators\ Revenue: R$ 2.256.630,00\
Fluminense x Boca Juniors\ Attendance: 78.856 paying spectators\ Revenue: R$ 1.729.117,50\
It can't be, right? I've expressed my opinion here several times. The box office does need to be a significant source of revenue. It's the same in Europe. But common sense is needed. Cheap tickets when they need to be cheap (and not the absurd 40 reais for a Flamengo vs. Cardoso Moreira match, as in this year's depleted State Championship). And expensive tickets when they need to be expensive. In this sense, the ticket price for the Fluminense game should have been more expensive than the one for the Corinthians game. More revenue should have been raised. First, because there were more people, and second, because it was a Libertadores semifinal, against Boca Juniors, which is worth more than any Copa do Brasil final! In my opinion, football is a spectacle, just like any other form of entertainment, so there's no such thing as "it's unfair to the people." If demand exceeds supply, prices should rise to the equilibrium point where there's no idle capacity in the stadium, nor kilometer-long lines where thousands and thousands of fans can't buy tickets (because they're sold out). After all, we're in a country where big rock and pop concerts cost between 200 and 300 reais, and that doesn't stop them from selling out. Often, they even fill the Maracanã stadium...
vinicius.paiva@flamengorj.com.br