Generally, miners would not wait for the outcome of administrative and financial reforms only to invest. With money borrowed by customers at low interest rates, Atlético-MG would qualify to play football while cleaning the house.
The results of the games were visible. In 2021, the club won its second Campeonato Brasileiro, after a 50-year break from the first, won the Copa do Brasil and reached the semi-finals of the Libertadores. And money?
In this report, ge explains to fans the numbers contained in the latest financial statements, referring to last year, and predicting the main consequences of the current and future situation.
+ Brazilian football funding in 2021: revenue grows again, but clubs still face debt and conflict
+ Rodrigo Capelo column: How not to get involved in financial matters? The solution to unconventional numbers is to ask questions
Atlético-MG Finance – Photo: Infoesporte
The good news is that Atlético-MG revenues increased significantly in 2021, driven by competitive prizes, but not just them. Investing in football qualifications shows their value in this aspect, as they increase revenue.
The bad news is that, despite the fact that the cash flow has increased, the financial turmoil continues to be significant, which is further reflected by the level of debt. With R $ 1.3 billion, the Minas Gerais club is heavily indebted to Brazilian football and is far from having the money to pay.
The relationship between Atlético-MG revenues and liabilities
Source: Financial statements
Revenue analysis begins with advertising rights and awards, which originate with these same competing rights such as the Brazilian Championship, Copa do Brasil and Libertadores. It is important to understand why this revenue increased.
When the 2020 Brasileirão ended in 2021 only because of this catastrophe, part of its pay was postponed until the next balance sheet. In other words, last year’s revenue was supplemented by payments that would have been in arrears under normal circumstances.
In addition, in addition to the benefits in performance, the alvinegra association significantly increased the variable component. Prizes are awarded in the Copa do Brasil and Libertadores as the teams exit the stage. With the rise of the dollar, the transfer from continental competition, conducted by Conmebol, rose.
Atlético-MG billing profile in 2021
Source: Financial statements
In the area of trade and marketing, Atlético-MG more than tripled the level it had registered in 2020. In 2021, 77 million BRLs were calculated, a number that includes funding and licensing.
Revenue directly linked to fans also exploded. Although the tragedy forced the team to play without fans for the rest of the season, just 14 games was enough to bring BRL 43 million to the box office. In the number shown in the table above, followers and social activities are still added to this column.
In the transfer of athletes, the Minas Gerais club cost a total of $ 38 million (discounted participation and other commissions). It was not a bad result, but it is less than what the country’s biggest player sellers are collecting – more than three times that amount.
Comparisons between budgets (as well as estimates made by the board before the start of the season) and equity (with figures provided) show how the board handled the funds during this period.
In the recipe, there were a lot more expectations than frustration. Advertising and awards, marketing and trade and the field generated more revenue than expected athletic management. In the transfer of players, the frustration was huge.
|in BRL million||Budget||Completed||Different|
|marketing and trade||24||77||53|
|Ticket offices and stadium||19||43||24|
|Assistant and social partners||33||21||-12|
|Transfer of players||120||38||-82|
|football payroll paper||-191||-308||-116|
In terms of cost, ge separates the compensation from the football department, as it is the reason it has the highest proportion and performance on the field. Salaries, photo rights, labor costs, animals, field rights and deductions are within this line.
Atlético-MG had a cost of BRL 191 million in payments and ended up exceeding its own estimates, after spending BR8 308 million in total. It is the third largest paper in Brazilian football, behind Flamengo and Palmeiras alone.
Part of this difference between budget and recognition is explained by the awards paid to athletes, for the quality of sports, in knockout competitions. Elsewhere, because domain rights and deductions become greater as advertising revenue increases.
Financial results include interest on debt and other financial and non-financial items. Because of the high debt, large amounts are lost.
In 2021, Atlético-MG had 19 million BRL in late tax and another 58 million BRL in funding interest. Among the financial revenues, there is R $ 23 million in debt relief and debt relief – but this money did not go into the cash register; It will just stop going out over time. With a combination of other non-essential numbers, we come to the results shown in the table above.
Net results also need to be considered. As long as the financial statements show a surplus (profit) of R $ 101 million per year, it does not mean that there is money left over.
To achieve this benefit, R $ 240 million was spent on “accounting benefits” from assets linked to the new domain. There is no immediate effect of cash, that is, these funds did not fall into Atletica’s bank account. It was placed on the balance sheet for accounting purposes. There would be a decrease in violence (loss) if this incredible record did not exist.
If the total number is not scary enough – $ 1.3 billion -, Atlético-MG’s debt profile raises further concerns for fans. Or at least it should.
With regard to maturity, not less than R $ 552 million will be claimed in 2022, prepared for the short term. Others are long-term, so from 2023 onwards.
And that is where the worst consequences come from starting administrative and financial reforms without stopping investing. As new revenue has been generated, costs have also increased. There is no “left” money in everyday life for reduced debt.
Atlético-MG debt profile for maturity
Source: Financial statements
Atletico’s debt is generous in all types of debt, but one of them is unique: loans from financial institutions or issued by security guards. The risks are different in each case. While banks charge high interest rates, traders are close to the right administration only for Selic, the base rate.
Bank debt is reduced as follows:
- BRL 399 million to financial institutions
- 238 million BRL for individuals
The document does not specify the names of the individuals, or what is considered to be the “related party” (a person who has a formal relationship with the club administration), but it is possible to determine that they are 4 Rs – Rubens Menin, Rafael Menin, Renato Salvador and Ricardo Guimaraes.
In the tax area, there are prepaid tax phases. Many refer to Profut, with whom the club joined in 2015.
Among the employee debts, there are current obligations (salaries and pay for the same season) and provisions that the board makes for legal cases. The law department estimates how much money Atlético-MG will pay in the event of loss of cases filed by former employees, and this amount is paid as implementation progresses.
As it is a major investor in consolidation, debts with other clubs and agents have increased in recent years to R $ 112 million and R $ 101 million respectively. There is still R $ 34 million in cash due to contract signatures. All of these numbers appear in the chart below under “others” and distributors.
Atlético-MG debt profile by type in 2021
Source: Financial statements
The people in charge of Atlético-MG know that it will not be possible to rely on money from customers forever. Thus, the project entering its third year has come to an end: either a way to make it sustainable or an investment philosophy would be at stake.
In fact, the club could increase its revenue to such an extent that, thanks to this, it would be possible to pay all costs and still reduce debt slowly. This is the dream of every top hat and also of those who need to dare and cheer from the football managers.
Invoice increased, but it did not reach the point of closing this account. About half a billion, most from Atlético-MG’s own perspective, about half of Flamengo and Palmeiras are collected.
The question, then, is how to reduce the debt of a billionaire in ways that do not depend on income and do not require such rigor. The answer has already been found. Less than a month ago, the Negotiation Council approved the sale of the other half of the shops owned by the party.
The estimate is to get R $ 320 million in the operation, an amount that would be used to reduce huge debts (with emphasis on loans from financial institutions). With cash in hand, it is even possible to get a discount and reduce a large portion of the responsibilities. But it is clear, from now on, that this money will not be enough to resolve the crisis.
Another way out is a company club. The nearly R $ 240 million borrowed by security guards and related associations, for example, could be converted into participation in the future SAF capital. For the most obvious Portuguese: dealers would own a percentage of the club rather than the exemption of these debts.
In addition, it is possible to raise money by selling percentages to another owner. With the entry of this partner, the investment of resources could allow more debt to be canceled, keeping the club in a good financial position, which does not need to relinquish its sporting ambitions.
These are not just concepts. The sale of shops and immigration to club-companies is an ongoing process, based on external negotiations, with other, and internal, political entities. Fans must follow them carefully. The sustainability of the project, which started three years ago and provided the first trophies, depends on this solution.