CADE requests additional information on football leagues

The Administrative Council for Economic Defense (CADE) requested additional information in two administrative procedures related to the creation of the Liga do Futebol Brasileiro (LIBRA) and Liga Forte União do Futebol Brasileiro (LFU). The cases were launched to investigate mergers that were not previously notified to CADE, practice known as gun jumping.

Commissioner Victor Oliveira Fernandes, rapporteur of the cases, issued orders that made the cases public, summoned the respondents, and requested further fact-finding investigations. Decisions established that the leagues and investors must submit, within 5 days, detailed documents and information about the constitution, corporate evolution, governance structure, and contracts signed within the scope of the two leagues. 

Starting in 2023, the Office of the Superintendent General at CADE (SG) investigates practices such as collective bargaining for commercial rights, and the broadcasting of Brazilian football championships through associations formed by the two leagues.  The SG concluded that there was evidence of gun jumping, stating that LFU and LIBRA carry out joint management of assets, such as broadcasting rights, and constitute joint ventures, which requires a mandatory notification. 

In the decisions that determined the additional investigation, the rapporteur emphasised that, as covered by the press, after the leagues were formed, their statutory structures and contractual arrangements had significant changes, without any prior notification to CADE. Mr Fernandes also noted proximity between LIBRA and LFU, with discussions about a possible unification of the entities, which reinforces the need for further analysis by the agency. 

Mergers subject to mandatory notification without prior clearance from CADE may result in penalties ranging from fines to the declaration of nullity of all acts performed. 

According to the rapporteur, the absence of prior submission of legal transactions to the agency for review exposes the risk of nullity of the entire contractual framework of the leagues. This scenario affects not only football clubs, investors, and investment vehicles, but may also impact the stability of commercial relations in the Brazilian professional football. 

Access Cases: 

Liga Forte União Case no.: 08700.005511/2023-37 

LIBRA Case no.: 08700.007461/2023-22