Argentine footballer Enzo Fernández, after his contract with Chelsea FC from England, Chelsea Football Club
Enzo Fernández went from making his debut in the first division to becoming world champion in just two years. At 22, he is the most expensive player in Argentine football history. Last week, England’s Chelsea announced their signing for $121m, to be split between Portugal’s Benfica and Buenos Aires’ River Plate. The Argentina team had raised Fernández in their lower leagues and sold him to the Portuguese side in July 2022 after just a year in the first team. It ended up making a successful deal that was a headache. For his percentage of the chip, River takes nearly $25 million, which if received today would be worth nearly half.
Argentina has a tortuous relationship with foreign currencies. The gap between the dollar’s official rate and the dozens of parallel changes opens the newspapers every morning, and the fear of saving in anything other than the national pesos – in an economy that ended last year with inflation at 94.8% – feeds a black market that feeds the hustle and bustle on the streets and Argentines have known that since childhood. According to the government, a dollar is (as of this week) 196 Argentine pesos, although if a citizen uses his card to make a purchase abroad, he ends up paying 392 pesos per dollar, and if he wants to buy tickets in the informal market, he will pay around 380. The official dollar is effectively a fiction that until recently was reserved for handling imports. Last July, the government allowed importing companies official listing, but due to a lack of foreign exchange, it eventually restricted access to dollars to use its few reserves to buy energy in a market affected by the war in Ukraine.
Argentina also obliges companies to settle foreign currency purchased abroad at the official exchange rate. Because of that, it was a relief for River Plate to know they would be getting their share of Fernández’s pass in installments. “We would complete the collection within five years,” said the club’s president, Jorge Brito, in a radio interview, in which he explained that the club will receive an initial payment of 30% of what it equates to, plus Installments to be completed .. in 2028. “We hope that there will be a smaller gap in the official dollars that we will collect in the years to come. Or even that there is no gap and they end up being real dollars that will be collected in the following years,” said Brito, who, like all Argentines, was aware that if he received the $25 million now, he would in pesos would be the exchange value imposed by the central bank If he intended to use it to hire a player overseas, he would have to use those pesos to spend them in dollars at the informal market exchange rate, losing almost half of what he originally earned That’s why he’s betting on the future: rampant inflation will make the dollar dearer for the next installment, and October’s presidential election could end with foreign exchange liberalization like it did in 2015 when liberal Mauricio Macri came to power.
Fernández during his presentation with Chelsea FC on February 1st. Darren Walsh (Chelsea FC)
Brito called for “tools” so “clubs can defend themselves” and opened the debate: “We ask for a concession on us on the dollar because Argentine football deserves it.” Hence, the country began to talk about a “soccer dollar”, an exchange rate that would allow clubs to operate with currencies at a more competitive value. It is not a formal request by the teams to the government, nor is it part of the country’s economic agenda. But it’s not crazy to think about either. As the government limited access to dollars to pay for imports, differential exchange rates to limit access to foreign currency or encourage its liberalization have grown steadily. The “Coldplay Dollar” sets a higher exchange rate for hiring artists overseas; the “Qatar dollar” imposes restrictions on overseas purchases; and the tourist dollar allows foreigners arriving in the country access to an exchange rate similar to the informal one, so their dollars fill the central bank’s coffers rather than the clandestine exchange offices in downtown Buenos Aires. The government has also made concessions to the few industries that generate foreign exchange. Last September, the government sponsored a “soybean dollar,” a 32% improvement in the official price for agribusinesses that released their exports that month. He later announced a “tech dollar” that would allow tech companies selling services abroad to freely dispose of up to 30% of their currencies and exempt them from taxes on 20% of their income when they make investments, exceeding three million dollars.
The restrictions on the dollar were already a problem for River in the last transfer market. A few weeks ago, the team lost one of its stars, Colombian Juan Fernando Quintero, who had not renewed his contract because of a gap between his economic entitlements and what the club could pay him: Quintero, a tax resident in Argentina, had to deal with the Obtaining payment of his bill in the country and the costs in official dollars were difficult for the club to bear. Quintero eventually returned to Colombia, but first he was tempted by Brazil, who, with much greater economic clout than their neighbours, have conquered all the rising stars of Argentine football.
As River calculates how many pesos it could receive in the years to come as the official dollar appreciates, exporters of lemons, wine, tea and meat, and soccer have also started demanding their own exchange rates. Other teams are seeking a return to prevailing reality: last July, when the central bank restricted access to the dollar, the Banfield club announced the sale of a player, Giuliano Galoppo, to Brazilian San Pablo. He redeemed the $8 million token in bitcoin.
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