Consultancy uses Flamengo as an example to Corinthians and suggests solutions for debt worth R$2 billion | corinthians

GE Corinthians explains the rift between Rubão and Augusto Melo

Corinthians may have a “Flamengo-style” financial recovery ahead. This is the example used by sources from Ernst & Young, the company responsible for providing consultancy services to the Augusto Melo management, in a report created in recent months to elucidate the economic situation of the Parque São Jorge club.

The financial report, still undergoing final adjustments, suggests three main directions to recover the club financially:

• the hiring of a CEO, as the ge;
• judicial recovery;
• the renegotiation of short-term debts to reestablish cash flow, a strategy used by Flamengo for more than a decade.

EY calculates Corinthians’ debt at more than R$2 billion, including the club’s liabilities and the financing of more than R$700 million for Neo Química Arena.

Due to this large debt, Corinthians must pay more than R$200 million in interest this year.

The possibility of the club becoming a SAF is also included in the study and was even debated in meetings between representatives of the consultancy and the club, such as president Augusto Melo; former football director Rubens Gomes; financial director Rozallah Santoro; and, more recently, executive Fabinho Soldado.

Initially, the EY report would be presented this Thursday, at an event during “Corinthians transparency week”. However, there are still adjustments needed for the report to be approved, which should transfer the presentation of the numbers to next week.

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The public disclosure of Ernst & Young’s analysis is a request from the consultancy itself to Corinthians. The club is the one who must present the data.

The consultancy arrived at Corinthians through financial director Rozallah Santoro and seeks to present not only the numbers, but possible solutions to the chaos in Timão’s finances.

The company believes that the sequence of bad administration was responsible for the black and white problems. The study does not include the more than R$ 130 million invested in hiring this year by the Augusto Melo administration.

Given the example of Flamengo, treated as a similar scenario, the consultancy company predicts a period of over half a decade for Corinthians to be financially healthy, as long as the suggested guidelines are followed.

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