Corinthians closes first half in the blue, stabilizes debt, but has challenges ahead | corinthians

O Corinthians closed the first half of 2021 with the accounts in the blue and managed to stabilize its total debt.

In a financial balance sheet released this Wednesday, the club presented a surplus of R$394,000 from January to June. The board would have liked to have disclosed the document before, but there was a delay due to some questions from the Supervisory Board, the body that oversees Alvinegra accounts.

Corinthians’ debt currently stands at R$977.4 million, against R$982 million in December last year, a reduction of 0.5%. In Corinthians’ accounts, using criteria other than GE, the current indebtedness is R$ 978.8 million.

Of these, R$588.5 million are related to short-term obligations (which must be paid within 12 months).

Corinthians debt evolution

This amount does not include the financing of Neo Química Arena. Timão has an agreement with Caixa Econômica Federal to pay BRL 569 million by 2040 – R$300 million will be deducted from the amount that the club will receive for the sale of the stadium’s name.

The positive result in the first half of 2021 was made possible in large part thanks to the reduction of the football squad’s payroll, with the departure of more than 15 players, TV revenues (some still referring to 2020) and the arrival of new sponsors .

Corinthians ended 2020 with a deficit of BRL 123 million — Photo: ge

However, the financial situation in Corinthians remains very complicated and the board projects a challenging second semester. The club suffers constant judicial blockades due to past debts and continues to have some reduced income due to the coronavirus pandemic.

Corinthians has not yet paid the salaries of the squad in July (which won at the beginning of the month) and owes three months of stipends to athletes from the base. It is also in arrears with taxes and has not deposited the Employment Compensation Fund (FGTS) for employees for more than two years.

In addition, the payroll has grown again since July, with the arrivals of Giuliano and Renato Augusto – João Pedro is also close to being announced and Roger Guedes has advanced negotiations with the club.

Composition of Corinthians’ short-term debt

Amounts that Timão needs to pay within one year

Thus, selling players is essential to gain financial strength. The Corinthians budget for 2021 foresees the collection of R$ 70 million with transfers, but the document will be corrected and the target will be raised to R$ 90 million.

By the end of June, Timão received BRL 14.9 million with transfers of economic rights to athletes and with bonuses through the FIFA solidarity mechanism (percentage of transfer of players trained at the base of the club).

In the coming days, Corinthians should announce the sale of defender Raul Gustavo to Bordeaux, from France. The clubs reached an agreement of 2 million euros (about R$ 12.3 million at the current price) for 50% of the athlete’s economic rights – Timão will continue with 40% to profit from a future sale.

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So far in 2021, TV broadcast rights were Timão’s biggest source of revenue: R$145.4 million.

Corinthians revenue in 2021

Corinthians’ soccer department had a surplus of R$ 33.9 million in the semester. However, the social club accumulated a loss in almost the same measure: R$ 33.4 million.

Inaugurated earlier this year, President Duílio Monteiro Alves says his priority is to clean up Corinthians’ finances. To do this, it hired a consultancy specializing in management and is trying to cut spending by up to 20% in all departments, including football. He also signed a contract with KPMG, a company that will help in the renegotiation of debts.