Bloomberg — 777 Partners LLC bought a controlling stake in Vasco da Gama in one of the highest-profile takeovers of a Brazilian football team since the country’s national sport opened up to foreign investors.
The Miami-based investment firm signed a memorandum of understanding to acquire 70% of Vasco in a deal that will value the club at about $330 million, including debt, according to an official statement from both sides released Monday. Talks were first reported by Bloomberg News in January.
“This will be the starting point of a new future, victorious, sustainable and with no debts, everything that our huge crowd craves,” Jorge Salgado, president of Vasco, said in the statement.
The deal comes after legislation passed last year allowing Brazil’s clubs, which have historically been run as non-profit associations, to restructure as limited liability companies, overhaul ownership and modernize finances.
Rio de Janeiro-based Vasco da Gama is one of Brazil’s best-supported clubs, where some of country’s best players, including World Cup winner Romario de Souza Faria and English Premier League star Philippe Coutinho, have played.
Like many teams in Brazil, it’s saddled with sizable debt. 777 is betting that new management and a fresh injection of cash can help make the storied club profitable again.
The agreement is non-binding and set to be finalized in 90 days after due diligence, but will immediately provide Vasco with a $13.7 million bridge loan that will be converted to equity upon closing.
From afar, Latin America’s most populous nation is a football paradise, with passionate fans and some of the world’s best players. The country has brought home five World Cup titles, making Brazil the most successful international team in history.
But the country’s professional clubs have been run poorly and taken on too much debt, problems exacerbated by the financial impact of the Covid-19 pandemic.
777 isn’t the only investor trying to turn things around.
In January, Florida-based digital entrepreneur John Textor bought Botafogo, another Rio club, for some $330 million. The previous month, legendary Brazilian striker Ronaldo Luis Nazario de Lima took a controlling stake in Belo Horizonte’s Cruzeiro, where he started his professional career.
777, which has built a portfolio of sports assets that includes streaming services and investments in British basketball, targets undervalued businesses with deep connections to fan bases, according to its website.
Its football stable already includes two of Europe’s most historic clubs: Genoa Cricket and Football Club in Italy and Spain’s Sevilla FC.