Flamengo Targets Global Spotlight In Expanded Club World Cup

Ask any soccer supporter around the world which Brazilian club is the most famous, and the response will be unanimous: Santos – the seaside club where Pelé became a global star. It’s an answer that Flamengo fans may not appreciate. Today, the Rio club is more than just a team, it’s a cultural phenomenon – boasting a fan base of over 40 million that follows the team every step of the way. Flamengo is a way of life that transcends social classes, ethnicity, religion and divisions. The Rubro-Negro is considered sacrosanct.

Yet abroad, Flamengo barely registers. Soccer fans will remember Flamengo from its 1-0 defeat in the final of the Club World Cup against Liverpool in 2019. That season, the club enjoyed unprecedented success under manager Jorge Jesus whose team played with an attacking flair rarely seen in the Brazilian top flight. Flamengo fans had hoped for a repeat of 1981 when Zico and co. swept past Liverpool, but there was to be no victory this time.

“It was a hell of a year because we won the Copa Libertadores Cup after 38 years,” Flamengo president Luiz Eduardo Baptista, nicknamed BAP, told me. “So it was a magic year. We prepared ourselves for the Club World Cup in regular fashion. It was the end of the season, so it was pretty much excruciating after almost 75 games. It was hard for us to compete against Liverpool.”

This summer, Flamengo returns to the spotlight, participating in the 32-team Club World Cup, a tournament that FIFA hopes will become a flagship tournament and a major source of revenue. While the competition has drawn criticism in Europe due to the congested match calendar and the implications of distributing a $1 billion prize pot, the view in Brazil is different. There, it’s seen as a chance to build the Flamengo brand, generate revenue, and win a coveted title.

Brazil’s calendar is already congested, and the Club World Cup adds further strain. This year, Flamengo is competing in the national league, the Brazilian Cup and the Copa Libertadores. In the first half of the season, Flamengo featured in the local state championship. However, new Brazilian FA president Samir Xaud recently promised to reduce the number of match days in the state championships. In the U.S., Flamengo could play up to seven additional matches.

Baptista said: “The priority is the Brasileirao and Libertadores, but I don’t see how the Club World Cup would compete against these other competitions. Flamengo this year may play 81 games. It’s a lot. You need to have a bigger squad, different medical care, preparation, and so forth. It’s more complicated than in other countries, and I don’t believe it’s sustainable.”

The distribution of the $1 billion prize pool has exacerbated fears of financial inequality in the game in Europe and beyond. In Philadelphia, the Brazilians will face Chelsea in the group stage. The recent Conference League winner reported revenues of $633 million, dwarfing Flamengo’s income of more than $173 million ($1 billion reais). In 2022, the club’s revenue passed $1 billion reais for the first time, more than the revenues of Crystal Palace, Ajax, Sevilla, and Villarreal, the bottom four of Deloitte’s 2022 Football Money League.

Still, the gap with Europe’s true elite remains huge. That disparity is reflected in the prize money on offer at the Club World Cup: European clubs will receive up to $38.19 million in the group stages while South American clubs get just $15.21 million. “FIFA had to accommodate all these interests,” said Baptista. “It’s the first time FIFA is doing this. FIFA somehow tries to address the different realities of all these clubs. Considering the clubs and the size of the clubs, there must be a differentiation. Having said that, if the differentiation addressed by FIFA is the best one, you know, only time will tell.”

Baptista downplayed the importance of the prize money. He pointed out that Brazil and the U.S. lack a bilateral tax agreement. Flamengo could be taxed twice in its earnings from the Club World Cup – up to 40% of its tournament revenue. The club has been struggling to understand and navigate the complexities of state and federal taxes in the U.S., but Flamengo expects to find a solution by the end of the week.

“The net impact on Flamengo is positive, but not critical. Nothing will change in our life because we are a profitable club in Brazil,” explained Baptista. “We are probably the biggest club in terms of revenues in Latin America, and by far the number one in Brazil. This year, revenue will probably be 1.5 billion reais, which is roughly $270 to $280 million. The total debt will be between $25 to $30 million. The debt is pretty much under control. So from a liquidity standpoint, we have 6 or 7 months in terms of cash. So, from a financial standpoint, we are in a strong position.”

The Club World Cup will boost that position. The 2022 Copa Libertadores winner and current Brazilian league leader also plays Esperance de Tunis and Los Angeles FC in Group D, but the ambitions of Flamengo, a club where braggadocio is part of the DNA, extend well beyond the group stages. European clubs will be at the end of their season, allowing Baptista and his club to dream. He concluded: “We are excited about it. It’s going to be tough, but I’m pretty confident. In every competition Flamengo enters, we hope to be the winner. So hopefully, Flamengo will reach the final and become champions.”

In such a scenario, Flamengo would share in some of the global fame Santos still enjoys.