Marcos Motta (Brazil) Zurich - 7 November 2011

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Population (2010): 185,712,713 people Estimated no. of football fans: 100 million Gross Domestic Product (GDP) in 2010:

US$2,087,889,553,822 49mi people have entered the middle

and upper classes since 2003 Projections made by the government

show that the economy of Brazil shall have 5% growth per year until 2014

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-5%

0%

5%

10%

2006 2007 2008 2009 2010

4%

6.10%

5.20%

-0.60%

7.50%

Evolution of Brazilian

Economy

Brazil USA EU

Brazilian football clubs total revenue increased 34,4% during the last year and 300% in the last 8 years.

Great impact of TV Rights and new features of advertising and sponsorship

Reduction of revenues generated by the transfers for the third consecutive year

Tickets;

12% Social and

Amateur;

14%

Sponsorship

and

Advertising;

17% Other; 14%

Transfers;

15%

TV Rights;

28%

Percentage of Revenue Sources

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2003 2004 2005 2006 2007 2008 2009 2010

235.6 278.3 436.4 447.9

613.6 652.7 701.6

942.8

Total Revenues – in million Euros

Corinthians (25.8 million supporters): 80% increase from 2007 until 2010

Internacional (4.8 million supporters): 47% increase from 2007 until 2010

São Paulo (16.8 million supporters): 18% increase from 2007 until 2010

Flamengo (33.2 million supporters): 64% increase from 2007 until 2010

Santos (5.2 million supporters): 151% increase from 2007 until 2010

0 20 40 60 80 100

Santos F.C

C.R. Flamengo

São Paulo F.C.

S.C. Internacional

S.C. Corinthians

20

33.7

71.5

58.7

50.7

50.2

55.3

84.3

86.5

91.6

Total Income – in million Euros

2010 2007

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Clubs sponsorship revenues increased

24% from 2008 until 2009 and 371% in

these 7 years, followed by the growth of

the clubs’ value

CLUB 2009 VAR. % 2011

S.C. Corinthians 225 68% 377.7

C.R. Flamengo 226 33% 300.4

São Paulo F.C. 221 31% 289.3

S.C. Internacional 92 31% 121

Santos F.C. 54 84% 99.3

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0

20

40

60

80

100

2003 2004 2005 2006 2007 2008 2009

20.8 30.6

60.9 71.6 73.8

79.3

98.1

Evolution of Sponsorship

Revenues – in million Euros

Value of the clubs – in million Euros

Flamengo was the biggest pay-per-view seller in 2008 and in 2009, with 13.8% and 12.6% of the total sold respectively, followed by Corinthians (9.7% and 11.8%)

It is reported that as of 2012, Flamengo may receive €43mi as TV Rights

Clube dos 13 | collective agreement.

CLUB 2008 VAR. % 2010

1 S.C. Corinthians €9.7 144% €23.7

2 São Paulo F.C. €11.6 83% €21.2

3 C.R. Flamengo €11.9 59% €19.1

4 S.E. Palmeiras €13 43% €18.6

5 S.C. Internacional €9.3 70% €15.8

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Major TV Rights Revenues in 2010

(million Euros)

In 2010, 71% of CBF revenues

was generated by sponsorship

agreements and 14% by Seleção

matches.

In 1994, a Seleção friendly match

worth US$200,000, while in 2010 it

amounts app. US$2.5mi;

From 2006 until 2010, CBF

sponsorship revenues increased

320%, while the total revenues raised

218%, with a total profit amounting

€35.7mi.

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-30

0

30

60

90

120

2006 2007 2008 2009 2010

19.8 24.5

39.5

60

83.3

36.7 45.1

57.6

84.5

116.8

-8.1

3.9 12

26.3 35.7

CBF Revenues – in million Euros

Sponsorship Revenues Total Revenues Profit/Loss

In four years, 183% increase in revenues generated by sponsorship and advertising and 169% in revenues generated by TV Rights

Club centenary

New marketing strategies

Ronaldo signing in 2009

Result: Corinthians' jersey revenue is currently the fifth largest in the world, behind Barcelona, Manchester United, Liverpool and Real Madrid.

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Sponsorship and

Advertising

TV Rights

7.2 8.8 9.3 9.7 13.7 14.7

20.4 23.7

Corinthians Revenues – in

million Euros

2007 2008 2009 2010

1-4) Hypermarcas: €16,700,000 for 2

years of contract (2010/2011)

€11,400,000 for Neo-Química

Genéricos

€4,100,000 for Bozzano, Assim and

Avanço

€1,200,000 for other advertising

campaigns

5) FISK: €3,000,000 for 8 months

contract (2011)

6) Nike: €6,700,000 per year in a 5-

year deal (2009/2014)

Total Per Year: €18,250,000 www.rbmf.com.br

In the last years, some of the most important Brazilian starlets returned to Brasileirão: Ronaldo, Ronaldinho, Roberto Carlos, Robinho, Rivaldo, Deco, Scolari, Luis Fabiano, Adriano, Fred and Elano;

In 2011, only 23 players were transferred from the 1st Division of Brazilian National Championship to foreign clubs (45 | 2010, 46 | 2009, 52 | 2008, 64 | 2007, 50 | 2006, 58 | 2005 and 65 | 2004);

Differently from previous years, in 2011 none of the main young starlets left Brazil, such as

Neymar, Paulo Henrique Ganso, Lucas, Leandro Damião and Dedé;

Club’s acquisition spending shot up 63% to US$79m in 2010, while in Europe decreased 29%.

Reasons: raise of salaries, proper exploitation of players’ image rights, new sponsorship and advertising strategies/agreements, increase of TV rights and the participation of investment funds in players rights.

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2009: Debut as a professional footballer in Santos F.C.

Remuneration: €169,000 p/a

Contract Length: 2013

2010: São Paulo State Championship and Brazilian Cup winner. Debut as an

International Player for Brazilian National Squad

Remuneration: €415,000 p/a

Contract Length: until December 2015

2011: Libertadores Cup and São Paulo State Championship winner for Santos F.C.

Remuneration: €847,000 p/a as salaries + €4.170m p/a as image rights (70% of any image rights agreement entered by Santos F.C.) = approximately €5mi p/a

Contract Length: until December 2015

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Age/Year 19 years old / 2011 21 years old / 2003 21 years old / 2004

Salary €5m p/a (total rem) €452,000 p/a €910,000 p/a

Transfer Fee €45,000,000 €8,500,000 €24,000,000

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Remuneration in Flamengo: €5mi p/a (75% paid by Vent. Cap. and 25% paid by Flamengo) + 50% of any sponsorship agreement entered by Flamengo over the amount €12,5mi (minimum sponsorship revenue exclusively guaranteed to Flamengo);

In 2010, two sponsorship agreements guaranteed around €12,5mi to Flamengo. When signing Ronaldinho, Flamengo expectations was to double such amount of sponsorship revenue;

Any amounts that exceeding €12,5mi shall be divided in the following proportion: 50% to Ronaldinho, 30% to Vent. Cap. and 20% to Flamengo.

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Venture Cap.

Best Scenario

Annual remuneration of

€5,000,000 + 50% of the

exceeding sponsorship

revenues (about €6,250,000

according to Flamengo

projections)

Increases the sponsorship

revenues, amount sufficient

to pay the player’s salary +

increase in the ticketing,

merchandising, sporting

gains and global brand

Invests €3,750,000 annually

as salaries and receives 30%

of the exceeding

sponsorship revenues

Worst Scenario €5,000,000 per year as

remuneration

Increase in the ticketing,

merchandising, and global

headlines

Invests €3,750,000 annually

as remuneration

Booming national economy;

Stronger currency;

2014 FIFA World Cup and 2016 Olympic Games in Rio de Janeiro;

The influence of the investment funds (2009-2011);

New middle and upper classes | Rising living standards | more money to spend;

Corporate model for clubs | more professional and long term approach;

New TV deal worth USD550m per year (2012-2015).

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