US firm to invest in Rio soccer club Vasco da Gama

Vasco da Gama look set to become the latest Brazilian soccer club to be bought by outside investors when US investment firm 777 Partners reached a deal to purchase a controlling stake, the Rio club said.

Vasco said the two parties signed a memorandum of understanding that values the club at 1.7 billion reais ($333.1 million) and includes an agreement by the Miami-based company to assume 700 million reais ($137.16 million) in debt.

The deal for 70% of the club still needs to be approved by their members in a vote.

"It is with pride that we announce the biggest accord in the history of Brazilian clubs," Vasco president Jorge Salgado said.

"We've worked without stop over the last few months to find a long-term partner with financial and operational capacity that shares our ambition to put Vasco back in its place as a giant of Brazilian and South American football."

Investors 777 Partners, who have already sunk money into Italian club Genoa and Spanish side Sevilla, did not respond to requests for comment.

Vasco are the 11th most valuable club in Brazil, according to Sports Value, a Sao Paulo-based branding company.

Players such as World Cup winners Romario and Bebeto, and current Brazilian forward Philippe Coutinho, all played with the Rio side.

However, although they have one of the biggest fan bases in Brazil, they have fallen on hard times recently and will spend a second consecutive year playing in Brazil's second division.

Vasco are the third major Brazilian club to welcome outside investors in recent weeks, following the sale of Cruzeiro to former Brazilian striker Ronaldo, and Botafogo to US investor John Textor.

The deals come in the wake of a landmark decision by Brazil’s Congress to loosen long-standing rules governing club ownership.

Brazilian clubs were traditionally fan-owned and governed in often opaque circumstances, but new legislation means they can now be run as limited liability companies and controlled by investors who can enjoy a more reliable legal framework.

The move has prompted a flurry of interest in clubs that produce some of the world's greatest footballers.

"The deal creates conditions for Vasco's football to recover its high sporting performance," a club statement said, and includes provisions for investment in other Olympic and Paralympic sports run by the club.