Will Argentina’s football lose its kick if clubs are privatised?

In recent weeks, Argentina's far-right President Javier Milei has tried to put into action his election promise of deregulating South America's second-largest economy by opening it up to the private sector..

One of his measures could radically alter the country's footballing landscape by allowing big money to flow into football clubs, which have until now been run as non-profits.

The move has kickstarted intense debate in football-crazy Argentina with some fans supporting it while others fear it could drastically damage the game.

Milei wants to repeal the 'Companies Law' which governs the sports clubs.

This will potentially allow clubs to become privately owned 'Public Limited Sports Companies' - known legally in Argentina as 'Sociedades Anónimas Deportivas' (SADs).

Argentina is positioned at the "epicentre of sport, marketing and business" due to its global fame of "certain brands" that include prominent footballing clubs Boca Juniors and River Plate, says Carlos Adolfo Garcia, a lawyer and member of the editorial committee overseeing the Centre of Sports Studies' newsletter at the Austral University in Buenos Aires.

However, Milei's push to bring more capital into Argentina's domestic football game would fundamentally alter the club's non-profit model of being 'civil associations.'

David Ibarrola, of the Gino Germani Research Institute at the University of Buenos Aires, says it is difficult to measure whether most of Argentina's passionate football fans back the move.

"In Argentina, there is currently a love affair with the proposals made by the new government. In principle, most of the important figures at the clubs would reject this change," he tells TRT World.

Community roots

For some fans, Argentina's football history starkly contrasts the money-making motives being mooted by the government.

Research by Ibarrola underscores how, in the late 19th century, immigrant communities introduced football to Argentina, leading to the formation of English clubs tied to educational institutions.

The game became popular among the local working classes as they formed their own leagues - after all, 22 players need only one ball to get on with the game on the field.

By the 20th century, amid the reduction of the working week duration and mass media's promotion of the game, a plethora of football clubs emerged. It led to the spread of fan culture, as local supporters in the community began to attend their club's games across Argentina.

The Argentine Football Association (AFA) says the clubs have historically supported children and adolescents from the streets. Under the current club model, such marginalised sectors of society receive access to services, including education, healthcare and recreational activities.

Ibarrola says Milei’s proposal would entail wholesale legal changes, undoing the “sporting and social activities” that have provided long-standing community value but are considered economically "unviable."

AFA has come out against privatisation in full force, saying Argentine domestic clubs "were not born to generate business and profits for people" but instead "to provide society with services that cannot be found in other sectors".

Under the current club model, Ibarrola says the institution's lucrative activities, which come largely from men's professional football, are redistributed into their social activities.

AFA insists such endeavours are carried out "by building from the initial foundations of the institutions: not to profit but to generate contributions to society."

The AFA President Claudio 'Chiqui' Tapia has also lent his weight to the non-profit club model, congratulating domestic clubs who recently revalidated their positions as non-profits.

Among Argentine clubs, the bid has received strong pushback from bitter rivals, including Boca Juniors, River Plate, San Lorenzo, Independiente and Racing.

But Milei’s proposal is a voluntary option for sports clubs in Argentina, explains Garcia.

"The decree is in force but must be approved by one of the Chambers of the National Congress and gain the approval of the Permanent Bicameral Commission," Garcia tells TRT World.

A year's deadline has been set for the initiative. It would allow the various sports authorities to modify their charters, paving the way for clubs to compete as companies.

Clubs wishing to become companies would have to submit their requests in writing to Argentina's Football Association's (AFA) general secretariat.

Who supports it?

Some Argentines have warmly welcomed the move to liberalise the club model. Former President Mauricio Macri is one of them.

Macri has deep and well established footballing ties, heading Boca Juniors as the club President from 1994 to 2007, when Diego Maradona returned to the Bombonera stadium

Even before Milei came up with his radical libertarian economic model, Macri had been calling for private investment in football clubs. "In a world where we all aim to choose freely, let the members of each club choose," he told local media in 2016.

But Ibarrola sees the move as a wider trend within football that he says will make clubs vulnerable to acquisition.

In Argentina, supporters typically become members who run and administer clubs or 'socios' in Spanish. They would have to "cede ground" to shareholders, likely stripping the fans of the power to influence their beloved clubs, he says.

A way to make money

Such a departure, Ibarrola says, adheres to a commercial logic driven by profit.

The region has already experienced a similar drive towards a private model. Some clubs in Chile and Uruguay have become private companies.

In 2021, Brazil, Argentina's biggest sporting rival and often regarded as the spiritual home of football, also introduced a bill allowing clubs to become private companies.

In South America, Garcia says Brazil is potentially the biggest exponent of “economic growth” at the club and league level, bringing in money from TV rights and franchising.

Brazilian clubs have not faced any serious setback to the club’s “cultural values” since going private, he says.

But he admits each country would experience such a tectonic sporting shift differently.

After Brazil liberalised its club model, Middle Eastern and North American capital flowed into some of the country's domestic clubs as investors have pushed to tap into new revenue streams.

Similarly, in Argentina, Milei has floated the potential of increasing foreign direct investment (FDI) in the country's domestic game.

Organisations such as 777 Partners from Miami - are involved in international distribution rights for the Argentine domestic leagues. BC.GAME, a prominent crypto casino platform in September 2022 reached a global sponsorship deal with AFA that Garcia says can boost the brand of the Argentine national football team internationally.

Milei has highlighted the interest of overseas investors, insisting there could shortly be investment bids of more than $1 billion.

"There are many international football clubs that want to invest in Argentina because it goes without saying that this country is a cradle of stars," said Milei.

Argentina, the current FIFA World Cup Champions, have a long-standing and prestigious footballing heritage.

Many prominent Argentine coaches, such as Marcelo Bielsa and Jose Pekerman, have left an indelible mark on football culture overseas.

Notable Argentine players, such as Diego Maradona, Gabriel Batistuta, and Pablo Aimar have helped cement Argentina's footprint around the globe. But all left the country at a young age for European clubs. Experts point to the higher salaries from overseas as a driving force, as clubs cash in on players considered assets to balance their books.

Today, Argentina's domestic league is ranked 9th globally, while arguably, the investment could boost clubs' finances, including their ability to retain players for longer.

Milei has said the English club Chelsea, owned by US consortium BlueCo since 2022 and with an Argentine manager Mauricio Pochettino at the helm, is interested in investing in Argentina's local football club. Local press have reported private interest in several clubs, including powerhouses Boca Juniors, Racing Club, Estudiantes de La Plata, Newell's Old Boys, Banfield y Lanus.

Like BlueCo, Garcia also draws comparisons to huge sports companies like City Football Group, owners of the 2023 Champions League Winners Manchester City, which have a footprint in 11 countries, including Brazil.

However, experts say such ownership models can potentially impact the club's identity. They describe them as becoming subsidiaries and not clubs in their own right, damaging the whole culture at the club.

A Pan-America club competition

Some say recent sports history is a testimony to the belief that private companies don't offer much to the clubs, which, for loyal fans, are longstanding focal points of the local communities and distinguished identities.

Ibarrola says such issues as the attempt to relocate stadia in Argentina can endanger the cultural heritage of the clubs, which, for supporters, have been forged over a long time.

In the future, he says, "a tough economic cycle is projected for Argentina, with stagnant economic activity, which will harm the economy of the clubs and their associates."

Garcia describes Argentina's political instability, citing strict legal regulations and fluctuating governmental policies among some potential issues.

He also sees the situation of the "barras bravas", similar to ultras that provide passionate support in stadia despite cases of alleged violence amid alleged ties to the darker side of the game.

Many in Argentina consider them to be a negative force, with alleged political ties who make money as an organised network while wielding power over the clubs.

Garcia says they could "hinder the harmonious development of the sports organisations."

More broadly, he believes organising clubs under a commercial model will likely attract investment in infrastructure and technology.

He believes Latin America and Argentina have "great potential" to develop their business model, considering the value of each league and club.

Amid the prospect of more investment in the region, the idea of Pan-American club competition akin to the Champions League is gaining weight. Reports suggest it would meld the heritage of Latin American football and the financial muscle of North America.

Ibarrola says the idea existed before the possibility of clubs becoming private companies gained traction in Argentina.

Next year, a new tournament has already been confirmed between the finalists of the Copa Libertadores and the Confederation of North, Central America and Caribbean Association Football (CONCACAF).

With Argentina's national hero at the 2022 World Cup, Lionel Messi, donning the number 10 jersey of Inter Miami FC, a big change could be afoot.

"Rumours were heard in recent years concerning a "Copa Libertadores" with CONCACAF teams. This could accelerate with the arrival of Messi in the US," says Ibarrola.