– Don’t think of a title, we have to hear that we have managed the financial part, that the Corinthians no longer have any difficulty in repaying their debts. It’s not that we have paid off the debt, because it is practically impossible to do so in the next two years, but that the next president will take the club with a healthy financial share – the manager replied.
DeVille said several times during the interview that the current balance sheet figures, citing 2021, would show that the work has begun to bear fruit. Ever since the manager took office, he has been reorganizing the club in collaboration with consultancies such as Falconi and KPMG.
GE goes through recent financial statements copied by Doyle during an interview to assess Elevenigra’s financial situation. The report is part of an annual series on the finances of Brazilian football, with figures from last year.
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Corinthians Finance – Photo: Infoesporte
A more comprehensive look at the Corinthians accounts shows a worrying picture. The ratio between the tax (everything accumulated each year) and the debtor (which was to be paid on the last day of each year) shows the difficulty in fulfilling the promises.
Although the Park Sao George Club has increased its revenue in 2021, with some reasons to be happy, it remains at a very difficult level to deal with the debt – the total value of both is R $ 1 billion, as discovered by the details can go.
Details: The Elevenigra Board says it reduced its debt from R $ 949 million last year to R $ 912 million. The difference in numbers is explained by the calculations adopted. In the ge series, the loan is equal to the total liabilities, reduce the amount available in cash.
The relationship between Corinthian income and debt
Source: Financial Statements
One fact that is common to all clubs is that Corinthians registered more broadcast rights under normal circumstances due to epidemics. Since the 2020 Brazilian Championships only ended in 2021, a corresponding portion of its payments has been postponed to the next balance sheet, making it a bit difficult to read.
The results of this calculation are different. It is important to carefully monitor the growth of transmission revenue, for example, as this irregularity has hampered the last two years. In addition, due to the extraordinary value in billing, the net result (profit or loss) for the year was increased.
Also with this line, which includes awards and payments that are conditional on performance, Corinthians will soon see the results of recent investments to improve football. In 2021, the club finished fifth in Brasileirão and one in Libertadores. Financially, both competitions will have a lot to gain in 2022.
Corinthians billing profile in 2021
Source: Financial Statements
In the commercial and marketing sector, there is a positive highlight. Last year, Corinthians nearly doubled their revenue from sponsorship and licensing compared to the previous season, and grew as one of the highest-earning clubs in the line.
There is only one star in terms of sponsorship. In that revenue, the club accounted for about R $ 18 million, citing a contract with Taunsa. However, the company did not make the payments and, today, it is being received by the Elevenigra Board. That is, the amount appears correctly in the billing, but did not reach the bank account, because there was a default.
In terms of fan-related revenue, such as ticket offices and supporters, the club is still plagued by epidemics, as it was unable to gain fans at the Neo Química Arena for most of 2021.
With the outbreak of the epidemic and the restructuring of the stadium business – which includes renegotiating the loan with Caixa and allocating these revenues – Corinthians significantly improved its performance in the area. There was a need to create. With the second largest crowd in the country, the club is behind the main opponents.
Finally, there was a significant drop in player transfers over the previous year. The association earned a net R $ 126 million in 2020 (after deductions for third party partnerships and commissions), and that amount dropped to R $ 27 million in 2021.
In all texts on finance, ge compares between budget and financial statements. The idea is to present the estimates made by the directors and the results obtained by them after one year in parallel. In this case, it will not be possible. The club did not publish the budget.
In debt analysis, the general numbers are still alarming. Corinthians cut off its debt to R $ 1 billion. Although the overall value has stabilized and there is some good news, such as successful negotiations, the scenario is still very difficult.
By classifying these liabilities at maturity, R $ 564 million is payable in the short term, in less than a year. These lenders expect to receive from the club in 2022.
Corinthians do not reach this level in terms of income and have yet to pay all its expenses, so it is safe to say that it will be impossible to fulfill all the promises. The solution would be to renegotiate the terms, get the loan amount, roll over the loan, so that it can be repaid later.
Corinthians Debt Profile in Maturity
Source: Financial Statements
Faced with financial needs, the Corinthians are turning money into loans. In 2021 alone, BRL entered 158 million new credits, compared to BRL 181 million on previous loans. It is the job of the finance department to manage the cash flow and, as far as possible, meet the demands.
In this part of banking, the club is indebted to financial institutions such as Daycoval, BMG, Bradesco and Santander. And there are pending issues with ball managers, such as Giuliano Bertolucci, Carlos Leight and Andre Curie. Giuliano was the most kind to accept payment after 2023.
Regarding previously unpaid taxes, the Elevenigra Board signed a new agreement with the government, through the Emergency Program for Recovery of the Events Sector (PURS). In total, R $ 187 million was renegotiated. The restructuring of these payments was important in reducing and lengthening short-term charges.
In addition to this latest renegotiation, taxes remain in installments through Profut. The total is more than R $ 400 million, the heaviest part of the Corinthian debt.
In the area of labor, the Corinthians jumped. Wages and labor charges are still significant, but image rights have shrunk by more than BRL 74 million between 2020 and 2021. Reducing this debt has a direct effect on Rome, as they are the main players on the other side of the negotiating table.
Finally, in the chart below, the column brings together suppliers of “other” products and services, clubs from which the board has purchased players in installments, and agents. The price is very high and rising year by year.
Corinthians’ Debt Profile by 2021
Source: Financial Statements
Duilio Monteiro Alves took over the presidency of the Corinthians in 2021. His predecessor’s legacy was negative in many ways. Andres Sanchez sold the naming rights and took the lead in reorganizing the stadium business, but, at the club, he allowed the debt to rise to dangerous levels and led to controversial decisions and results on the field. Duilio has been with him throughout his journey as his football director.
In his first year as president, Duilio came up with a strategy that is common in the history of football and does not always work. He will invest in empowering the team, hoping that good results will help generate revenue, which in turn will improve his ability to repay the loan. In theory, it would work that way.
This philosophy was put into practice with the help of Paulinho, Willian, Giuliano and Roger Gods. Not all of them cost to hire, but all came with high salaries and photos. The payroll is $ 234 million, the fifth largest in the country. There are also strategic costs.
In practice, what you see after 2021 is that the sports sector has really improved. Fifth place in the Brazilian Championship boosted financial transfers, in the performance-linked segment, and placed the club in the 2022 Libertadores, with dollar prizes that make up the difference in budget. Financially, the project needs to prove itself.
Looking at all the statistics with optimism, it can be concluded that there is merit in not allowing the crisis to worsen. And only. Corinthians failed to reduce its debt, failed to improve its profile in terms of payment deadlines, and did not record enough revenue to begin financial recovery.
It’s very hopeful that things are going as they should. Sooner or later, with the demands of the creditors, the lawsuits, the executions and the suspension of funds, the club will have to face reality. The core players will need to be sold, or the people concerned will leave the initial lineup, or it will be difficult to keep salaries up to date. Either way, field performance is at stake.
Delivery still has time. He is now halfway through his administration, which released the results of just one season, with additional challenges due to epidemics. If the manager wants to live up to his promise to Milton Lett in this interview, to reach the end of his term with Corinthians being reorganized and healthy, he has to spend an extraordinary year off the field in 2022 and 2023. Will