The butterfly effect of Milei's 'superweight': Soccer stars return to Argentina

Argentina, mired in a series of seemingly endless economic crises , has been reluctantly exporting its best footballers for decades. The local passion that characterises the country has never been enough for local clubs to even compete with the contracts offered by the big foreign teams.

So when River Plate, one of the two biggest teams in the local league, shelled out $10 million to lure star midfielder Sebastián Driussi back home in January, the news came as a surprise.

The big-money signings kept coming, quickly piling up, one after the other: Gonzalo Montiel , the hero of the 2022 World Cup, joined Driussi at River Plate in Buenos Aires; Alan Velasco signed for Boca Juniors, the team with the most international trophies in Argentine history; and Facundo Farías landed at Estudiantes in nearby La Plata. Even some stars born abroad — from Spain, Brazil, Colombia and Costa Rica — closed big deals.

There are already more than two dozen players earning $1 million or more a year in Argentina, according to websites and specialized media that monitor the deals. A couple of years ago, there were no more than 10 .

This is the Javier Milei effect . Fifteen months after taking office, the libertarian president promoted an adjustment policy that gave stability to the peso . So much so that, with a double-digit inflation rate, the country's currency strengthened considerably against the dollar.

The central bank estimates that the multilateral real exchange rate is now the strongest in almost a decade. This is giving Argentines greater purchasing power to go shopping on weekends across the border in Chile, sip caipirinhas on the beaches of Rio de Janeiro or, when it comes to the game they love, snap up contracts for strikers and goalkeepers from abroad .

The strength of the peso is perhaps another reason why Milei remains highly popular after more than a year of austerity measures and remains standing amid the embarrassing cryptocurrency scandal .

“ The stronger peso made us more competitive ,” says Diego Lemme, president of Defensa y Justicia, a small club outside Buenos Aires. Lemme says local salaries had become so low in dollar terms in recent years that even teams from minor markets like Paraguay and Bolivia were attracting many Argentine players . Last month, Lemme signed two players who were under contract abroad.

For many investors and analysts, the renaissance of Argentine football is another sign of the growing risks posed by Milei's plan . Although the president has managed to quickly reduce inflation , the annual rate of 23% predicted for 2025 in the central bank's latest survey is still well above the global average.

And the longer Milei keeps the peso under control , allowing it to depreciate only a small amount against the dollar each day, the more cars, dishwashers and football players the country will import .

The deterioration in the country’s trade balance, analysts warn, could ultimately lead to a large-scale collapse of the peso , as has happened so many times before in the country. “ The overvalued peso is a reality ,” says Aldo Abram, executive director of the Freedom and Progress Foundation.

Milei and his economic advisers do not want to spend much time on such arguments. For them, a stable peso is the anchor they need to eradicate inflation . Moreover, they expect sufficient dollar inflows to keep it appreciated. That is why, every time a well-known figure in Argentine financial circles expresses concern about the peso, they lash out.

Last week, Milei fired Sonia Cavallo , the ambassador to the Organization of American States, after her father, former Economy Minister Domingo Cavallo, worried about the currency’s “exaggerated appreciation” in a blog post. “ You’re either on one side or the other,” Milei said in a radio interview, confirming her dismissal.

Of course, there are still many limitations to the purchasing power of local football clubs. Top Argentine players, such as Lionel Messi or Julián Álvarez , remain out of their financial reach .

And Boca Juniors couldn't even raise enough money to sign Leandro Paredes , a reserve from the 2022 World Cup-winning team who plays for AS Roma in Italy's top flight. Talks between the two parties have broken down and Paredes will remain in Europe .

Officials at River Plate and Boca Juniors declined to comment for this article, and Argentina's main players ' union did not respond to a request for comment about salaries.

Soccer teams are prohibited from paying players in dollars abroad. So they pay them the equivalent of a dollar amount in pesos over the duration of what is typically a two-year contract . For teams, the risk is that the currency could suddenly collapse , as some analysts fear, forcing them to shell out more and more pesos to fulfill those contracts.

“You always have to be aware of the exchange rate risk ,” says Hernán Lacunza, vice president of Racing Club, one of the biggest teams in the country.

Lacunza, an economist who served as economy minister in Mauricio Macri’s government, was surprised to accept the Racing job late last year and discover that most local soccer teams did not adequately analyze their ability to withstand devaluation events. He immediately began making those calculations at Racing, which signed four foreign players this year.

“ What seems affordable in dollars today may not be so tomorrow ,” Lacunza said. “You have to have an idea of ​​what the team’s equilibrium exchange rate is.”

Translation edited by Ignacio Olivera Doll.