Financials: Flamengo x River Plate

Next Saturday, we will have the Libertadores de América 2019 final. The match between Flamengo and River Plate in Lima Peru will be the first in a single-game format.

The Brazilian club has not reached a final since 1981. Four-time Champion River Plate were crowned champions in 2018 in a match against archrival Boca Juniors.

Flamengo and River Plate in administrative terms have similar stories. Both restructure their management after serious problems and are surely the two strongest teams on the continent today.

Sports Value analyzed the financial data of these two Libertadores finalists, with many interesting conclusions.

River Plate’s analysis is strongly impacted by Argentina’s economic situation. Although the club has doubled its revenue in Argentine pesos over the past four years, in dollar has halved.

Flamengo

Flamengo ended 2018 with total revenues of R$ 543 million, or US$ 140 million, and in 9 months of 2019 this revenue has reached US$ 167 million. Surely in 2019 will be the Brazilian team with the most revenue generated and possibly of the entire American continent.

This high revenue is strongly impacted by more than US$ 57 million from TV, another US$ 24 million from membership and gate receipts, and about US$ 22 million in sponsorships.

The club has invested heavily in players ‘hiring, the balance of its investment already exceeds US$ 85 million.

The club’s football department costs in 2018 reached US$ 90 million and the expectation that by 2019 exceeds US$ 120 million. In 2018 football costs accounted for 65% of revenues.

Flamengo- Revenues and Football Costs- US$ Millions

Even with this increase in costs, Flamengo remains closing financial calendar with big profits. In six years, it has accumulated more than US$ 160 million in profits.

River Plate

River Plate ended 2018 with the highest turnover in its history, 2.1 billion pesos, about US$ 58 million. In 2015 it generated revenues of 1 billion pesos, or US$ 113 million.

The exchange rate situation in Argentina became so chaotic that in four years the club doubled in size but decreased deeply in dollars. And by 2019 the situation got even worse.

And that makes River Plate’s managerial and sporting achievement even more impressive, as its main revenue is generated from its members and season tickets holders, that account for over 26% of its turnover.

Revenue generated from fans is more representative than TV rights and sponsorships.

In a market in crisis, with heavy inflation and the population suffering with loss of purchasing power, it is really a fantastic fact. Members and season tickets revenue in 2018 amounted to 558 million pesos, or US$ 15 million.

River Plate’s football costs reached their highest figure in 2018 with a total spend of 1,08 billion pesos, about US$ 29 million, or 50% of its total revenue.

River Plate- Revenues and Football Costs- US$ Millions

To handle with this football department spending evolution, River resorted to loans and spent a lot on bank interest, ending 2018 with deficits of more than US$ 14 million.

In the last four years it was the first time the club closed in red.