Mazzola (Inter) and Rivera (Milan) - the ghosts that roam the San Siro...

Mazzola (Inter) and Rivera (Milan) – the ghosts that roam the San Siro…

The knives are being sharpened in Milan after another week of soul-searching for the two former giants of European football. Inter were beaten 3-1 at Sassuolo, while Milan – despite some hazardous defending – beat Serie B-bound Parma by the same scoreline. Inter are 24 points behind leaders Juventus, and the Roberto Mancini sceptics are quick to point out that when the former Manchester City manager was appointed, the margin was just 12 points. Milan, meanwhile, continue to wallow in mediocrity, as suggested by the 24,000 attendance at the San Siro for the game with Parma.

It’s quite likely that this season could be the worst ever in the history of modern Milanese football.  Milan are eighth at the moment and Inter 13th. Neither have much chance of claiming a Champions League spot this season. If you want some perspective on this, Inter have only finished in a double-digit spot three times since World War Two – 1994, 1948 and 1947. And although both Milan clubs have had their peaks and troughs, you have to go back to 1957-58, when both teams finished ninth (tied positions were all the rage in those days) for a more miserable season for the city.

It’s all very hard to comprehend. In the pantheon of football, Milan and Inter are legendary clubs. Between them, they have won 36 scudeti and have spent 164 seasons in Serie A. There have been 83 Italian seasons and in 59 of them, at least one of the two clubs has finished in the top two. Milan have won 14 European prizes, including seven European Cups and Inter have won six European competitions including three European Cups. As recently as 2010, Inter won the Champions League, while Milan’s last European crown was in 2007.

New grounds for old

But Milan pulled off something of a PR master stroke this week when they announced their plans for a new stadium. There is widespread belief that the two clubs’ shared home is a major reason why Inter and Milan are dragging behind Europe’s elite, indeed Italy’s own leading club, Juventus. The recent publication of Deloitte’s football rich list highlighted the competitiveness problems facing Italian clubs. Put simply, they do not make enough money from the “matchday experience”. Milan’s recent press release was therefore timely and unveiled the proposal to build a new 48,000-seater stadium in the Portello area of the city. The new site would include a hotel, a school for a sports academy, restaurants, playground areas and an artistic area where artworks could be displayed. Being Italians, you would assume there would be an aesthetic touch to it all. Milan are talking to Arup, who designed Bayern Munich’s Allianz Arena and the bird’s nest stadium in Beijing.

The stadium will be in an area that was once dominated by car manufacturers, notably Alfa Romeo, Citroen and Fiat. As the neighbourhood is heavily populated, sound-proofing technology will be used and the club has said it will follow an “English model”, in other words, easily accessible by public transport. The fact that the San Siro holds over 80,000 and the new ground will have a capacity of 48,000, is also recognition of the current status of the club.

Inter's last major trumph - 2010

Inter’s last major trumph – 2010

The announcement comes at a time when Inter have expressed a desire to make the San Siro their own. It suggests that the old “shared municipal home” model may have run its course, as Juventus have discovered. Inter’s new owner, Erick Thohir, believes that Serie A has to be more aggressive in selling itself. A big indictment of Italian football’s situtaiton was revealed by Thohir when he admitted that even his 15 year-old son is more interested in what goes on in English football than Italian.

But Thohir believes Serie A can be the second biggest league in the world after the English Premier. The figures tell you why he’s not targeting top spot. Inter earns less than USD 100m from domestic and international rights, while the English Premier will pick up USD 9.4bn from its most recent three-year deal. And while Inter’s turnover forecast is USD 240m for 2014-15, that is less than half of Manchester United’s expected revenue of USD 551m.

Changing models

The business model is gradually changing in Italy, however. New investors, such as the type that have thrown oil and emerging market dollars and euros at clubs in England, are now eyeing opportunities in Serie A. Without the money from assorted Russians, Arabs and Americans, the Premier League in England would not have the investor profile it has today. The top clubs are all owned by non-Brits: Manchester City, Liverpool, Chelsea, Arsenal and Manchester United. Of Serie A’s 18 clubs, only Roma (US), Parma (Cypriot-Russian) and Inter (Indonesia) are not in the hands of Italians. People like the Berlusconis and Morattis are largely from a different age, but given Italy is slipping into economic chaos – of the G7, only Italy and Japan have yet to regain their pre-crisis level of GDP –  it could be that, internally, nobody has the necessary clout – or will – to heavily invest in clubs like Milan and Inter.

That said, Milan still has enormous cachet. It is Italy’s financial and economic heartland. It is also fashion central and arguably the country’s most global city. It is also the only city to provide two European Cup winners. While Milan’s clothing may be strictly prêt-a-porter, its football clubs were definitely de rigeur for many years. The strips of Milan and Inter are as well known as any of the offerings by Milan’s world-famous fashion houses. Milan’s red and black stripes oozed confidence and flamboyance, while Inter’s black and blue always had a more sinister feel to it, very much in keeping with their role as the arch-exponents of catenaccio.

In the 1980s and early 1990s, Milan imported Dutch total footballers, the trio of Ruud Gullit, Marco van Basten and Frank Rijkaard, all wonderful players designed to thrill. Inter opted for ruthlessly efficient Germans – Andreas Brehme, Lothar Matthaus, Matthias Sammer and Jurgen Klinsmann. At the time, Serie A was the great European soccer circus, but clubs lived beyond their means and tycoons and politicians used them as ego-trips and expensive play-things. The party ended, however, largely due to the arrival of Financial Fair Play and the impact of the latest in a lengthy list of Italian football scandals. And if anything sums up the reduced circumstances of Calcio Italia, it is the current status of the two Milan giants.

Milan 1969...

Milan 1969…

There has always been a degree of complacency surrounding Italian football and a penchant for madcap schemes. Italy has been predominantly a three-club affair centred around two cities (Milan and Turin) down the years, with occasional – and unsustainable – bursts of success by less-fashionable institutions. The statistics and honours boards of Milan, Inter and Juventus would fill anyone with a high degree of confidence that this pre-eminence could go on indefinitely. But empires crumble, as the Roman ruins around the Italian capital will tell you.

In 2002, after it was revealed that many Italian clubs were on the brink of failure and would therefore struggle to maintain their license, Berlusconi launched the Salva-Calcio Act. Adopted in February 2003, the Act allowed football clubs to write-off a number of players’ contracts over a longer period than their useful economic life. But the authorities soon realised that this would enable clubs to submit accounts that might give a misleading picture to investors. The European Commission declared that financial statements presented in this way would not provide a true and fair reflection of the club’s assets, liabilities, financial position and profitability. Equally questionable was the practice of inflating the cost of players bought and sold – the so-called Plus Valenza.  A good example was the half dozen or so players trafficed between the two Milan clubs between 1999 and 2002, transactions that all yielded a profit of EUR 3.5m each time.

Fall and rise?

Milan’s decline really took hold in 2013 after Fininvest, the company formed by Berlusconi, suffered heavy losses. Milan had an unprecedented clear-out of its star names, with Zlatan Ibrahimovic and Thiago Silva heading to Paris St. Germain, and other big signings like Clarence Seedorf and Mark van Bommel also leaving.  Since then, Milan have looked decidedly bargain basement. Inter, meanwhile, have drastically lost momentum since the 2010 team – which was packed with veterans – departed, along with Jose Mourinho.

When Roberto Mancini returned to Inter in November 2014, there were high hopes that the man who guided the club to three Serie A titles and two victories in the Coppa Italia would rekindle the good old days. But the cynics would say that Mancini’s Inter made hay will the sun was shining as Juventus and Milan were embroiled in scandals. The first of those titles was achieved weeks after the season had ended, with Inter in third place, but with Juve and AC penalised, Inter were awarded the Scudetto by default. In the years that followed, Inter were by far the strongest team and although Mancini was successful, his brand of football was often at odds with the fans’ call for an attractive Inter. Today, Inter fans are divided about Mancini’s return and the fracas at the end of the game with Sassuolo between players and supporters, underlined the winter of discontent at the San Siro.

Does the future look brighter for Milan?  In some ways, the issues facing Italian football are not a million miles away from the problems that confronted the English game in the 1980s – racism, fan violence and dilapidated stadia. On top of that, Italy has to rid itself of its nasty habit of being prone to corruption and Inter’s Thohir was quite realistic when he warned: “If we get another Calciopoli, Serie A will be dead.” You only need consider how other parts of Europe have seen their domestic football bastardised and sent into the dark corners of the room by the all-consuming English Premier League, Bundesliga and La Liga to see how marketing can create a product that absolutely everyone wants a part of.

The footballing empire of Milan is at a tipping point right now. They are both still among Europe’s wealthiest clubs, but they have lost substantial ground. Unless they address their lack of competitiveness – it is not possible to live by turnstiles alone today – Milan and Inter, and indeed, Italian football, could slip back even further if the warning signs are not heeded. And it’s no longer enough to be a leading club in a domestic league, you also have to compete on a global stage for players and success. That’s the challenge for the impeccably tailored suits of Milan…