100-year-old store, South American crisis: South American football has fallen into the "globalization trap"
In the 16 Club World Cups from 2007 to the present, the South American team (Corinthians) has only won the championship in 2012, and the rest have been won by European teams, completely losing the meaning of the confrontation between the two continents. At the level of professional football, South America has been beaten by Europe, and the reason behind it is precisely the process of "globalization". Of course, in this process, South America has been "colonized" again by much more than the "gadget" of football.
Twenty years ago, South American football was able to continue its traditional advantages for more than 70 years, relying on the talent advantage of savage growth to compete with European football with a developed economy and a complete league system. From the World Cup at the national team level to the Intercontinental Cup at the club level, South American football competes with European football and maintains an equal balance of power. But this balance began to be upset in the 1990s, when the Boseman Act widened the gap between South American and European football. In 2002, the era of globalization of football marked by the World Cup in South Korea and Japan began, and the gap between South American football and European football became more and more insurmountable.
Last year, Messi led the Argentine team and let South America win the World Cup again after 20 years. But this is a testament to the decline of South American football: Messi, the superstar who created an era, was almost entirely trained by the European football system and achieved great success in Europe. Of the 26 players of the championship team, only one substitute goalkeeper Armani plays in South America, and the entire South America has long been reduced to the talent "raw material" market of European football.
In the past 20 years, few of Europe's top five leagues have been relegated due to the economic crisis and the withering of talent. But in South America, even River Plate, Santos, Palmeiras, Gremio, Cruzeiro, da Gama and other Copa Libertadores winners are not immune, which shows the poor living environment of South American football.
The Havelange Intercontinental Cup began in 1960, but as early as 1957, Champions League champions Real Madrid played a European and American club competition against Copa Libertadores winners Vasco da Gama in Paris. It was the first time Real Madrid lost to a team outside Europe since winning the Champions League for the first time in 1956. Coupled with Brazil's strong victory in the 1958 World Cup, it aroused the ambition of European football to compete with South America. The Intercontinental Cup was created in 1960 until 2005, when it was completely replaced by the Club World Cup, which represents globalization. It can be said that the Intercontinental Cup is the best witness to South American football being gradually thrown away by the wheel of history.
In the 1960s and 1980s, South American football competed with Europe in both the Intercontinental Cup and the World Cup, and even had a slight advantage. The World Cup winners are evenly split between the two continents, and the Intercontinental Cup South American football team won seven consecutive championships from 1977 to 1984. However, after the Boseman Act in 1995, European football has risen significantly, winning seven of the eight Intercontinental Cups from 1995 to 2002. If the Intercontinental Cup is followed by the Club World Cup, the 2006 edition of the Brazilian international team marks the end of the rivalry between South American football and European football.
In the 16 Club World Cups since 2007, the South American team (Corinthians) only defeated Chelsea in 2012 to win the championship, and the rest were won by European teams, completely losing the meaning of the confrontation between the two continents. South American teams have even failed to reach the Club World Cup final on six occasions – they have been knocked out in the semi-finals by the African, Asian and North American champions. In the last 7 editions, South American teams have been defeated by Asian teams 3 times, losing face.
In the past, the Intercontinental Cup has often become a platform for South American stars to become famous overnight and then land in Europe. Zico, Rai, Ortega, Riquelme, and Pato all opened the door to join the top five leagues because of the Intercontinental Cup. But since Neymar in 2011, no player from the South American champions has made it to the European giants through a strong performance in the Club World Cup. That is, on the stage of the Intercontinental Cup-Club World Cup, the South American championship has turned from prosperity to decline, and there are two important time nodes in 1995 and 2007 respectively, and there are socio-economic events that have caused heavy damage to South American football. The former is the Bosman Act, which affected the development of world football, and the latter is the global financial crisis caused by the subprime mortgage crisis.
Corinthians became the last South American team to beat the European champions in the Club World Cup in 2012, fueled by a brief boom in the Brazilian economy. From 2004 to 2013, the Brazilian economy had a so-called "golden decade". The Brazilian league also grew rapidly during this period, with sponsors flocking in, with Corinthians becoming the first non-European club to enter the top 30 of the Deloitte World Football Wealth List in 2012 and 2013. At the same time, Corinthians are among the top 10 in the world in terms of jersey sponsorship for football clubs. But the good times did not last long, and then the Brazilian economy entered a recession, and the Brazilian league, which was once ambitious to become the "sixth largest league in the world", never recovered.
After the epidemic, the collapse of international bulk raw material prices and inflation, the South American economy led by Brazil and Argentina is in a depression. According to a survey by Ernst & Young, the external debt of major Brazilian clubs increased by 900 million Brazilian reais from 2021 to 2022, and the total debt exceeded 11 billion Brazilian reais (about 2.2 billion US dollars) for the second time in history, with an average debt of more than 110 million US dollars per club!
Of course, because of the size of Brazil's economy, the income of some of the Brazilian giants seems to be good. Although Corinthians have debts of almost BRL 1 billion, they also have revenues of BRL 777 million, behind Palmeiras (867 million) and Flamengo (1.17 billion). However, Botafogo and Cruzeiro are very bad, with the Rio giants earning only 163 million Brazilian reais a year and external debt 6.38 times their income. Cruzeiro has an annual income of 189 million, and his external debt is 6.25 times his income. The gap between external debt and income is the largest in Guarani, which is a staggering 8.49 times!
Heavy debt forced the Brazilian government to bail out the market, allowing the club to be privatized and the club bought by foreign capital to solve the debt crisis. Heavy debt has also led Brazilian clubs to sell players more unbridled to cash in to pay off their debts, and the involution of the ball market has led to lower and lower selling prices, forming a vicious circle. Compared to the five major leagues, which recovered quickly and even more prosperously after the pandemic, South American football has been completely defeated economically. With an annual income of around 220 million euros, Flamengo, Brazil's richest player, is among the middle of the four major European leagues, but its debt is far greater than that of European clubs. The broadcast fee of the A-League is only 48 million euros per year, which is only 1/15 of the lowest in Ligue 1 of the five major leagues, and less than 1/3 of the broadcast income of these 1 clubs in Paris!