Corinthians is negotiating with Caixa and the 1st installment of the agreement can be postponed; impact would be huge

Corinthians and Caixa Econômica Federal are negotiating the last details of the agreement that has been sewn between the parties for a few months, duly authorized by the Court after request of both legal departments.

The report of My Timon found that one of the main news that can be announced is the postponement of payment of the first installment (annual). Instead of November 2022, Corinthians would pay it off in the last months of 2023. The maximum amount must not be changed, that is, R$38 million.

This postponement attempt is a consequence of the new coronavirus pandemic, which makes the club have no public and income for 18 months (since March 2020). If this is confirmed, the Club would have more than two years ahead of it to make cash and pay this first installment.

Plenty of time for a club that, in the first six years of the stadium, without a pandemic, had an average gross box office revenue of BRL 60 million/year, in addition to another BRL 15 million/year with other revenues (captives, cabins, parking lots, bars, restaurants, static advertising, events, etc).

In addition, Corinthians will have at least two more installments of the naming rights of pharmaceutical giant Neo Química, scheduled for the beginning of 2022 and 2023. In other words, without counting the correction by the IGP-M (General Price Index – Market), another R$ 30 million will be guaranteed.

The internal assessment is that this combination of the public’s return to Neo Química Arena and the postponement of this first installment to the end of 2023 will have a huge financial impact on Corinthians, who will be able to use a good part of this money to settle their day-to-day pending issues, such as salaries, etc.

Another important definition

In time: among the details being defined between Corinthians and Caixa, the total amount of debt caused by the BNDES loan at the time of the stadium’s construction, in the amount of R$ 400 million. The bank claims that the debt amount, at this time, is R$ 536 million. Timão, in turn, sees an open debt of R$470 million.

The expenses

In addition to the revenue described above, it is important to remember that the stadium also has its two traditional expenses: maintenance (electricity, water, insurance, employees, etc), which costs around R$ 25 million/year, and bordero discounts ( arbitration, police, ambulances, ticket agents, advisors, INSS, etc.), whose value depends on the number of games in the year.

This means that not all that revenue described above (box office + other properties) is not the liquid money that enters the accounts of the fund that manages Neo Química. It is necessary to subtract these expenses.

See more at: Neo Química Arena, Corinthians’ Board of Directors and Marketing Actions.