Why Haven’t the Sounders Signed João Paulo to an Extension Yet?

Why Haven’t the Sounders Signed João Paulo to an Extension Yet?

Disclaimer: This views and commentary expressed in this article are my own. This is an article of analysis and opinion.

 

Perhaps one of the more shocking headlines of the offseason is the Sounders not exercising their purchase option for midfielder João Paulo from Botafogo. The Brazilian midfielder proved crucial to the club’s on field success in 2020 scoring 2 goals and 5 assists in the regular season. While his performance in MLS Cup Final was unimpressive, he certainly was critical getting the club to the final throughout the course of the season. If João is more than happy to continue playing in  Seattle and  Botafogo are willing to let him go, then why hasn’t a deal been reached?

The Original Deal

If anyone doesn’t understand why the Sounders haven’t exercised their purchase options for João Paulo one must understand the original deal the Sounders made with Botafogo to acquire him. Signed in January before the winter transfer window closed, the original deal was the Sounders acquired him on a one-year loan using a designated player spot paying a loan fee of $1.25 million. Once the loan ended Botafogo gave the option to purchase Paulo on a permanent basis for a transfer fee. Mind you, this deal was made before the pandemic hit.

What the Sounders Would Like to Do

The Sounders believe for a player of his skill level that they can get a better deal paying him a lot less money than they already have. This doesn’t mean he’s signed on a permanent basis  taking a pay cut entirely. Paulo is a designated player, but he’s not one of the higher paid designated players in MLS. By extending his contract, the Sounders could pay off his salary in smaller chunks over a longer period of time. That would drop him below the threshold as a Designated Player and he would no longer occupy one of the designated player spots on the roster. It would open up the designated player spot allowing the club to search for another player at a position the club feels the need to be strengthened in future seasons. I’m certain this is what the Sounders would like to do.

Internal Financial Troubles for Botafogo

As the Sounders are once again negotiating, it would appear there has been lot more trouble that has transpired for Botafogo then what has been known by news sources outside of Brazil. According to Brazilian news outlet globo.com, Botafogo is in serious financial trouble. The goal the previous season was to reduce the team’s payroll from $3 million to $1million which was mostly unsuccessful. Covid-19 certainly didn’t help their financial cause either. Botafogo’s on field performance has been anything but stellar this season. The team currently sits dead last in the standings of Brasileiro Série A likely to be relegated to the lower division. Not to mention the club is also tied up in debt and having to pay off the Brazilian federal government as well. This perfect storm of events has forced the club to likely gut the roster completely, selling every high paid player on the active payroll to pay off the debt the club is in financially.

What is Likely to Happen?

With Botafogo in dire need of cash, it’s clear the Seattle Sounders have leverage in the negotiation process.  Botafogo doesn’t have the luxury to either demand that the Sounders pay a transfer fee higher than Joao’s current transfer value or loan him out for another year on the exact same terms of the first deal. The team needs cash urgently. It never looks good keeping an unhappy player on the payroll of a club that’s about to be relegated to a lower division. So Botafogo really has no choice nor control in the negotiation process. Likely, the Sounders will pay a transfer fee to Botafogo similar to the amount they paid the loan fee. According to globo.com, the Sounders will reportedly pay approximately an additional $1.2million to acquire the Brazilian midfielder  on a permanent basis.  It’s only a matter of when not if the Sounders get the deal done.

 

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