Bloomberg News

Brazil’s Olympians May Stay Around for Rio 2016 on Tax Break

July 30, 2012

Brazil’s Olympians May Stay Around for Rio 2016 on Tax Break

Yamaguchi Falcao Florentino of Brazil leaves the ring following his close 15-14 points decision over Sumit Sangwan of India (out of frame) in their first round Light-heavyweight (81kg) match of the London 2012 Olymipic Games on July 30, 2012 at the Excel Arena in London. Photographer: Jack Guez/AFP/Getty Images

Forget emulating Muhammad Ali: Yamaguchi Falcao says he gets enough public money as an Olympic boxer to avoid turning professional.

Falcao, who won his first-round bout at the London games today, gets a living allowance from Brazilian state oil company Petroleo Brasileiro SA. (PETR4) He said he may also box at the 2016 Olympics in Rio de Janeiro. Ali turned pro after winning gold as a teenager in Rome in 1960 and went on to become world heavyweight champion.

“We live better as Olympic athletes than as pros,” Falcao, 24, said in an interview.

Falcao beat India’s Sumit Sangwan 15-14 in the light- heavyweight round of 32. One of 18 children of a free-style fighter, he is among athletes benefiting as companies including Petrobras, Banco Bradesco SA (BBDC4) and Grupo Safra SA divert up to 1 percent of their tax bill to sponsor Olympic athletes under a 2006 Brazilian law to promote sports. In return, their brands get an image boost.

The backing of elite sports may deprive worthier social projects, according to Carlos Giannazi, a school director turned deputy in the Sao Paulo state government. He filed an objection in March after former Formula One champion Emerson Fittipaldi used the sports incentive law to bankroll the auto racing career of his 15-year-old grandson Pietro with 1 million reais ($489,000) of his tax bill.

Orange Grove

Fittipaldi’s business interests include limited-edition helicopters and a plantation of 500,000 orange trees outside Sao Paulo. Sueli Gomes, a spokeswoman for Fittipaldi’s group of companies, didn’t respond to a telephone call and e-mail requesting comment.

“He’s a rich man,” Giannazi said. “There are a lot of teenagers in Sao Paulo who don’t have any chance at all to play sports.”

Bradesco, Brazil’s second-biggest bank by market value, is using more than 3 million reais to back Olympic sports from synchronized swimming to sailing, according to Brazilian Sports Ministry data. One beneficiary, Ricardo Winicki, an Olympic windsurfer from Rio, said it has helped him get access to a sports psychologist and meteorologist, according to a federation news release.

“For the first time in 20 years of career, I have an entire team by my side,” Winicki, 32, said.

Fencing in Venice

Olympic fencer Guilherme Amaral, a 19-year-old biology student from the southern city of Porto Alegre, said by telephone he traveled to tournaments in Venice and Paris to prepare for the London games thanks to Petrobras tax money. Petrobras is bankrolling 196 athletes and coaches in Olympic sports with 18 million reais this year.

The tax receipts of Safra Vide e Previdencia, an insurance unit of billionaire Joseph Safra’s banking group, helped fund triathlete Juraci Moreira’s Olympic training with 100,000 reais in 2010, according to Sports Ministry data. Moreira failed to qualify.

The Brazilian Confederation of Ice Sports is seeking more than 484,000 reais to back a Brazilian Olympic bobsled team, the data shows.

More companies are using tax money to support Olympic athletes since 2009, when Rio won the right to host the summer games after London, Daniel Varsano, a spokesman for the Brazilian Olympic Committee, said.

“It’s an easy way for companies to link themselves with the games” Ferran Brunet, a professor at the Center for Olympic Studies in Barcelona, said.

Government Bureaucracy

The drawback is dealing with bureaucracy involved with government agencies, according to Lamartine DaCosta, professor of sports management at Rio’s University Gama Filho. Funding has to be approved by the Sports Ministry and reviewed by state courts, he said.

Brazil may not boost its medal count until after the Rio games because it takes years to develop athletes, DaCosta said. Brazil, which won 15 medals at the 2008 Beijing games, expects 13 to 18 in London, Varsano said.

Falcao, dripping with sweat in a blue singlet and shorts after his match, said Brazil could get its first boxing medal since 1968 thanks to Petrobras support. His brother, Esquiva, is competing in the middleweight division at the games with the oil company’s support.

Promotes Company

To be sure, neither brother is enriching himself with tax money. Petrobras caps the living allowance of each athlete it supports to 3,100 reais per month, matching the federal government’s own maximum grant.

Still, Yamaguchi, named after his father’s Japanese judo instructor, has a team including a nutritionist and physiotherapist that’s the envy of some pros. In return, he helps promote the oil company, appearing on television in June in a polo shirt bearing its logo.

“In Brazil, pros don’t have any support,” Falcao said. “Thanks to God, with Petrobras we have all kind of support.”

To contact the reporters on this story: Alex Duff in Madrid at aduff4@bloomberg.net; Rodrigo Orihuela in Rio de Janeiro at rorihuela@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at at celser@bloomberg.net


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