AFTER two years of speculation about the future, Inter Milan’s owner, the Chinese retailer Suning, is looking for fresh investment which may come in the form of a partial or complete sale of the club. According to media reports, Suning have engaged the US boutique Raine Group and Goldman Sachs to find a possible buyer. The former was recently involved in the € 2.5 billion auction of Chelsea FC, while Goldman Sachs are frequently involved in financings with major football clubs.
The writing has been on the wall for some time after Suning ran into financial trouble and were eventually bailed-out by a deal with Alibaba in China. They also filled a funding gap at Inter by borrowing US$ 275 million from Oaktree Capital and returned Inter to the bond market. Inter’s problems meant that people like Antonio Conte decided not to stick around and he left after he had led Inter to their first scudetto since 2010 in 2021.
How much would Inter cost? Valuations vary but the club in its entirety should cost around € 1.2 billion. There will be no shortage of potential buyers, from the Moroccan hedge fund investor Marc Lasry to any number of US businessmen who are becoming increasingly enamoured with Italian football, even though the game comes with certain limitations that include modest TV income – € 230 million per year for Serie A – and a need for expensive stadium upgrades.
There is also talk of Jim Ratcliffe, the owner of INEOS who had an eye on Chelsea, and the Saudi Arabian sovereign wealth fund that owns Newcastle United, having an interest. Italian football, for so long regarded as being parochial from a business perspective, has become more global, with only four Serie A clubs still owned by family groups – Udinese, Atalanta, Lazio and Napoli.
While Steven Zhang, Inter’s chairman, has repeatedly denied he wanted to sell-up, there are suggestions that the Chinese government, tiring of the great football project perhaps, are forcing Suning to dispose of the club.
A rebalancing, coming soon after the rebranding project, could help Inter out of their current predicament. In the past three seasons, they have lost almost € 500 million, including € 140 million in 2021-22. The last time they made a profit was in 2014. Their revenues topped € 350 million, but 74% of that went on wages. The club has also high levels of net debt – € 374 million in 2021. Suning have suggested they would be prepared to inject € 100 million into the club in the next year, but that was before they started scanning the market.
Inter need to sell players for high fees in order to bolster their income, but in 2021, their profit from this stream was negligible. The year before, they had made € 62 million and over five years, the profit on player sales totalled almost € 200 million. European football is also a prerequisite for their business model – this season they have a particularly tough Champions League group that includes Bayern Munich and Barcelona.
Inter’s balance sheet looks better than their domestic rivals, Juventus, who made an enormous loss in 2021-22. But there was some controversy in the Italian media when Lazio’s sporting director, Igli Tare, who claimed that Inter, AC Milan and Juventus were technically bankrupt but would not be allowed to go under because they were systemic clubs and Italian football could not function without them.
Any new owner will surely be impressed by the new stadium being planned with AC Milan to replace the iconic San Siro. The financial benefits of the new arena will surely transform the finances of Inter and the rossoneri and make both clubs more competitive on the European stage. Inter’s name carries plenty of weight, but the Milan duo have fallen way behind Europe’s elite clubs. With the right backing, that could change.
GAME OF THE PEOPLE 