Romario Says Plan to Fix Brazilian Soccer Team Debt Won’t Work

Romario, the World Cup winner who’s now a Brazilian lawmaker, said a proposal by the country’s soccer governing body to penalize teams that default on tax debt is unworkable.

Brazil’s government is discussing the creation of a structure for the management of soccer teams after clubs amassed 3.5 billion reais ($1.6 billion) in unpaid taxes, according to the sports ministry. The Confederacao Brasileira de Futebol, or CBF, suggested the government agree long-term repayment schedules and in return the soccer body would bar teams that fail to keep up from competing.

Romario, the top scorer on Brazil’s 1994 World Cup-winning squad, said the influence of the country’s biggest clubs makes any such penalty unlikely. The CBF also is proposing points penalties for teams that delay wage payments to players or staff, a regular occurrence in Brazilian soccer.

“Do you really think that the CBF has the moral courage and ability to make Vasco, Flamengo or Corinthians fall because they did not pay the debts?” Romario, a deputy in Brazil’s lower house, said yesterday, according to comments published on the parliament’s website. “That’s a lie. This won’t happen. This is a utopia and will not exist.”

While income from sponsors and broadcasters has boosted the revenue of teams in the elite Brazilian championship, the government has been forced to intervene to support clubs in a country where soccer is the most-popular sport, and where next year’s World Cup will be staged.

Millions Owed

Among the biggest debtors are Rio de Janeiro-based teams including Brazil’s best-supported club Flamengo, which owes about 750 million reais, according to the club’s accounts. Its local rivals Fluminense and Botafogo owe a combined 1 billion reais, their accounts say.

Getting teams to improve corporate governance is a priority, with soccer officials warning that some mismanaged clubs could go out of business. Last year, the brother of two-time World Player of the Year Ronaldinho took items from Flamengo’s club shop after the team failed to pay the striker’s salary.

The sports ministry has said it supports reorganizing club debt and introducing penalties for teams that fail to meet the requirements. From this year, European soccer’s governing body UEFA can ban teams from competitions, including the elite Champions League, if they fail to keep losses within a target range.

Vilson de Andrade, a CBF representative who attended yesterday’s sport and leisure commission hearing into soccer debt, said several clubs “won’t open their doors” when the new season starts in January unless a solution is found.

“This is the reality of Brazilian football,” de Andrade told lawmakers. “I have absolutely no shame admitting that.”

To contact the reporters on this story: Tariq Panja in Rio de Janeiro at tpanja@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net.

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