UNDYING HEROIC PAGES

The red financial statements of the white-and-blue team

Abstract

Football can be considered a national passion in Brazil, and the survival of the teams carries strong social interest. However, as any organisation, clubs that seek long-lasting and sustainable survival solid are increasingly required to develop financial soundness and proper governance practices. Even in the presence of extensive literature on these topics, many sports clubs still did not develop adequate managerial models with positive financial results, such as Cruzeiro Esporte Clube over the last years. Once among the biggest clubs in Brazil, the blue club held managerial scandals, police investigations, awful sports performance and deep financial crisis. Facing these events, this paper – a case study – analyses Cruzeiro’s financial, accounting and economic conditions, and how liquidity, returns, debt and activity indicators performed between 2011 and 2020. The club condition varies from illiquidity to insolvency, and strongly relies on external funds. Furthermore, financial shortage has reflexes on sports performance, with the professional team playing the national B-Series for the second year straight, which also shrinks short-run revenues that might reduce debt and leverage.