On October 28, the Board of Directors of Flamengo sanctioned a budget adjustment for the fiscal year 2026. This revised budget indicates significant improvements in key operational metrics for the club: a 20% increase in recurring revenue compared to 2025, a near doubling of recurring EBITDA, and a projected operational margin of 25% for this year, up from 19% in 2024.
The budget adjustment aligns with the club’s statutes and reflects its commitment to good governance and transparency. This regular review process involves comparing the originally approved budget with actual performance, allowing for adjustments that accurately represent the financial reality of the year.
A crucial aspect of this adjustment is the quality of revenue. While some absolute figures for 2026 were not met, the composition of revenue has improved, with a larger share coming from recurring sources that are expected to persist in the coming years, and a smaller portion reliant on one-off events. This indicates that Flamengo is evolving as a business, establishing a more robust and predictable revenue base.
Despite not meeting the original budget targets, Flamengo’s debt levels remain comfortable. The debt-to-EBITDA ratio stands at 1.2x, a decrease from 1.8x recorded in December 2024. EBITDA, which measures operational performance, reflects the cash generated from core activities before accounting for interest, taxes, depreciation, and amortization. The recurring EBITDA focuses solely on consistent annual revenues, excluding extraordinary income such as player sales and tournament bonuses.
This financial positioning suggests that Flamengo could settle its entire debt within a year or so, relying solely on cash generated from its operations without needing additional income streams.
The reasons behind the budget adjustment include significant investments in players, such as the acquisition of Lucas Paquetá’s rights, which impacted the 2026 fiscal year. Additionally, player sales did not meet expectations, exemplified by the failed transfer of Gonzalo Plata due to the buyer’s withdrawal after agreements were reached. Revenue from the Maracanã stadium increased by 20% compared to 2025 but still fell short of initial projections for 2026, primarily due to the anticipated naming rights that did not materialize.
The adjustment was approved by a majority during a meeting attended by 56 council members.
