Brazil’s Flamengo Won’t Make ‘Stupid’ Deal to Return to Maracana

Brazil’s most-popular soccer club Flamengo won’t be pushed to do anything “stupid” in its negotiations to return to Rio de Janeiro’s Maracana stadium, a senior executive said.

Flamengo, which says it has 40 million fans, is in discussions with the consortium awarded the rights to run the iconic arena after it was reopened in April following a $500 million, three-year renovation. Flamengo has played in Maracana since it was built for the 1950 World Cup.

“We’re better off doing it today than tomorrow, but having said that, I can take this decision in five years’ time,” Luis Eduardo Baptista, Flamengo’s vice-president for marketing, said in an interview.

The reconstruction of Maracana, which is currently being used for FIFA’s Confederations Cup and will host next year’s World Cup final, has proved controversial. Protesters have complained that the privatization of the facility doesn’t offer value for money to taxpayers who funded the upgrade, which cost 40 percent more than planned.

Consorcio Maracana, a group led by Brazil’s biggest construction firm Odebrecht SA, and including billionaire Eike Batista’s sports and entertainment vehicle IMX along with Los Angeles-based arena operator Anschutz Entertainment Group Inc., was awarded a 35-year contract to run the stadium in May. Under an agreement with Rio’s state government, it will pay 5.5 million reais ($2.7 million) annually for the concession, or

192.5 million reais in total.

First Game

Baptista, who’s also the president of satellite TV operator Sky Brasil, said new and refurbished facilities being readied for the World Cup offer Flamengo the chance to play in other cities than Rio, where the team is based. The club’s first league game of the new season was played in Brasilia’s new $750 million Mane Garrincha stadium against Santos, which gave up home field advantage for the occasion. The majority of the crowd wore Flamengo jerseys.

“I’m pretty sure other World Cup stadiums will be expecting to host Flamengo,” Baptista said. “Flamengo has the largest set of fans in 18 out of the 27 Brazilian states, so I think the club would be very well accepted and hosted everywhere. We would better off to have a home, a stadium to call ours. But we’re not going to do anything stupid to fulfill somebody else’s business model.”

Flamengo’s board announced in December that it had debts of 750 million reais, including about 500 million reais in unpaid taxes. The renovated stadium seats more than 78,000. The original Maracana hosted almost 200,000 people when Brazil lost the final game of the 1950 World Cup to Uruguay.

No Agreement Flamengo has held several rounds of discussions with Consorcio Maracana without coming to an agreement. Baptista said further talks are planned this week. The soccer team wants a revenue sharing agreement that will include income from the prestige and hospitality seats, though it has so far only been offered a deal where it will be paid a fee per game, he said.

Odebrecht spokeswoman Mariana Scalzo declined to comment because the negotiations aren’t complete.

“If you are foreseeing a relationship which is like a marriage for 10 years plus, you expect you share the revenues of the stadiums,” Baptista said. “We’re not going to accept to be only paid to play in Maracana.”

Before it's here, it's on the Bloomberg Terminal.