The Reform of the SAF Law: Part III

Article 1 of Bill 2,978/23 (“Bill 2,978”), which awaits presidential approval for its integration into legislation, modified, in addition to the league's theme – presented in Part II of this series – the activities that can be the object of a SAF (Sociedade Anônima do Futebol – Football Corporation).

The SAF law, before the reform, stipulated in §2, item IV, of Article 1, that the SAF could exploit “intellectual property rights of third parties related to football”.

The wording was poor. It only referred to third-party rights, without reference to the SAF's own rights, and expressly mentioned football activity, something that other items do not mention.

It is true that, in most operations involving SAFs, at least in the most economically relevant ones, intellectual property rights have, until now, been maintained within the patrimonial sphere of the clubs, which have entered into licensing or assignment of use contracts, for long-term, generally renewable, fixed terms, with the SAF. The exploitation of intellectual property, in these cases, effectively involves the situation described in the law, that is, third-party rights related to football. However, there are exceptions, including among teams with large fan bases, such as Santa Cruz.

In addition to the rights ceded or licensed, it is possible (or probable) that the SAF (Sociedade Anônima do Futebol - Football Corporation) will develop its own trademarks or other intellectual property rights, which will coexist with the main ones, ceded or licensed by the club, used, for example, on the jerseys. To avoid any doubt about this possibility, the clause was modified. So that the authorized exploitation expressly involves its own rights or those of third parties.

Thus, item IV, in combination with item III2, which does not mention football, becomes part of the activities that can be exploited by the SAF (Sociedade Anônima do Futebol - Football Corporation), involving intellectual property.

The other change concerns item VII, which originally provided for the possibility of the SAF participating in "another company, as a partner or shareholder, within the national territory, whose purpose is one or more of the activities mentioned in the items of this paragraph, with the exception of item II".

The text contained two problems. First, the prohibition of participation in another company outside the country. The second, consisting of the exception in item II ("the training of professional football players, in both female and male categories, and the obtaining of revenue from the transaction of their sporting rights").

The prohibition was unjustified; on the contrary, it imposed barriers to the expansion of Brazilian SAFs into other countries, including the formation of multi-clubs of national origin.

Worse: it encouraged the modeling of complex and costly structures to enable eventual external participation or international investment, which, it is argued, can be part of efficient SAF (Sustainable Agricultural Production) models.

Imagine, for example, that an existing SAF (Sociedade Anônima do Futebol - Football Corporation) decides to acquire a stake in a team in Portugal or another country, or in more than one country, so that its players, before international negotiations, can acclimate to the continent. This is a scenario that SAFs could consider if it generates cash flow.

Under the previous wording, direct participation could not be structured. The SAF would have to form a public limited company or a private limited company in Brazil, which are not subject to the restriction, and this company would then make the investment. The table below illustrates the structure:

With the reform, the impossibility of direct participation by SAFs in foreign business companies was removed, expressly providing for "participation in other companies, as a quota holder or shareholder, whose purpose is one or more of the activities mentioned in this paragraph".

Therefore, the investment can be materialized according to the following design:

This structure is, however, rightly limited by the purpose of the SAF (Sociedade Anônima do Futebol - Football Corporation). If the SAF has a restricted purpose, comprised of the hypotheses foreseen in Article 1 of the SAF law, its investee companies must also have equally restricted purposes, so that an unauthorized activity is not carried out indirectly. If there is no coincidence, the investment will not be authorized.

Finally, the purpose of the investee company may encompass all those listed in Article 1, including that contained in item II, referring to "the training of professional football athletes, in both female and male categories, and the obtaining of revenues resulting from the transaction of their sporting rights".

There was no reason for exclusion, locally or internationally. Potential situations of conflict of interest, such as participation in the same competition or control of another SAF (Sociedade Anônima do Futebol - Football Corporation), are already addressed in laws and regulations. It is up to the investing SAF to assess whether, at some point, the restrictive factual hypothesis may materialize and, if so, how to resolve the conflict.

But this possibility should not prevent an SAF from having a stake in another company that trains athletes, whether located in Brazil or elsewhere.

Thus, the legislator is correct in promoting the change, which broadens the scope of the SAF's activities.

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1. Available here. Accessed on 1.6.26.

2. “III - the exploitation, in any form, of intellectual property rights held by it or of which it is the assignee, including those assigned by the club or original legal entity that constituted it”.