Europe – GAME OF THE PEOPLE

ITALY’s Serie A had had four different champions in five years, with only Inter Milan securing two scudetti in that period. Their latest triumph, a 20^th Serie A title, was richly deserved and underlined how much stronger Inter are than their nearest rivals. Beating AC Milan to rubber-stamp their title must have been satisfying even if the tension of the occasion almost got the better of both teams’ composure.

Inter have lost just once in Serie A, a surprise home defeat at the hands of Sassuolo. Their relentless form this season has been built on what many people believe is Europe’s tightest defence as well as the goals of Lautaro Martínez and Marcus Thuram.

Their success is all the more credible given the difficulties they have had behind the scenes with the financial problems of their Chinese majority owners, Suning. Inter’s team is not a young one, it has the highest average age in Serie A (29.6) and the core squad includes more than half a dozen players over 30.

Inter’s rivals have spent more in the market, in the past five years, Juventus’ gross spend totalled € 758 million compared to Inter’s € 502 million. Inter’s net spend in that same timeframe was a positive of € 6 million, compared to the € 202 million and € 155 million net expenditures of Juve and Napoli respectively. The club has earned some big fees from selling star players, such as André Onana, who was signed on a free transfer 12 months earlier from Ajax (€ 52 million Man.Utd), Achraf Hakimi (€ 60 million PSG), Romelu Lukaku (€ 115 million) and Mauro Icardi (€ 50 million PSG).

By contrast, the last really big signings include Nicoló Barella, who cost Inter € 41 million when he was signed from Cagliari in 2019. Barella, who has won 27 caps for Italy, is now valued at around € 75 million. Benjamin Pavard of Bayern Munich cost € 30 million in 2023 and Lautaro Martínez had a € 25 million price tag when picked up from Racing Club of Buenos Aires in 2018. Alessandro Bastoni was signed for € 31.1 million from Atalanta in 2017.

Barella, Martínez, Bastoni and Marcus Thuram cost a combined € 100 million, but in today’s market, they would be worth almost € 300 million. Others, such as Henrikh Mkhitaryan, Hakan Çalhanoglu, the club’s highest earner, and Marko Arnautovic didn’t come with a fee. There have also been some bargain hirings, such as goalkeeper Yann Sommer (€ 6.75 million from Bayern), Federico Dimarco (€ 5.2 million, Sion), Matteo Darmian (€ 3.3 million, Parma) and Francesco Acerbi (€ 4 million, Lazio). It is widely acknowledged that Inter did some shrewd business in the transfer market at a time when Suning was unable to invest more money into the club.

Transfermarkt values the Inter squad at € 622.4 million. Of the entire squad, 64% are non-Italian and of the most-used players in Serie A, there are 10 nationalities represented, including non-Europeans Argentina, Brazil and Chile.

It will be interesting to see how Inter’s accounts stack up for 2023-24. The first six months (to December 31) of the current financial year resulted in a profit of € 22 million. In 2022-23, they lost € 85 million, which was a significant improvement on the previous campaign, but over 10 years, Inter made losses of € 780 million. The club’s revenues were up by € 60 million to € 425 million in 2022-23, boosted by Inter’s run to the Champions League final. This season they went out of the competition in the round of 16. Inter’s wage bill, out of necessity, was cut in 2022-23, but with their league success in 2023-24, win bonuses may push salaries north once more.

Inter coach Simone Inzaghi, appointed in 2021, has one of the best win ratios in the club’s history. His 66.67% win rate is higher than past coaches José Mourinho, Helenio Herrera, Giovanni Trapattoni, Antonio Conte and Luciano Spalletti.

Inter’s scudetto is the fourth successive season in which a trophy has been won by the Nerazzurri and follows their 2021 title. That particular win ended a 10-year period without silverware, a barren spell that was the worst endured the club since 1940-1953.

Inter have some key men they will want to hang on to, such as Martínez, Barella, Bastoni Dimarco and Thuram. All are on contracts that run to 2026 and beyond. Premier League clubs are among those interested in these players. With some uncertainty over the club’s owners, will Inter be able to resist selling some of their top talent in order to fund their next team?

THE LAST eight of the UEFA Champions League does not have a single representative from Serie A; Lazio, Inter Milan and Napoli all went out in the round of 16, making it three years in the last four in which Italian clubs are nowhere to be seen in the latter stages of the competition. Not so in the other UEFA offerings – the Europa League includes AC Milan, Atalanta and Roma, while Fiorentina are still waving the tricolour in the Conference League.

Serie A has become more competitive in the past few years. After Juventus won the scudetto in 2019-20 for the ninth consecutive season, Inter Milan, AC Milan and Napoli have all won the title. It looks fairly certain that Inter will be champions again in 2024. Inter are rampant this season, which makes their Champions League exit all the more puzzling. They have top Italian talent in Nicolò Barella, Federico Dimarco and Alessandro Bastoni and coveted foreign players like Lautaro Martínez, Hakan Calhanoglu, Marcus Thuram and Denzel Dumfries.

Serie A’s public appeal seems to be on the increase; in 2023-24 the attendances have hit an average of more than 30,000 for the first time since 1999. The Milan clubs are attracting more than 70,000 to every home game at the San Siro and Roma are drawing 60,000-plus crowds. There appears to be greater enthusiasm for the Italian game and much of that can be attributed to the revival of the Milan duo. However, Serie A is lagging behind the Premier League, La Liga and Bundesliga in terms of its commercial prowess.

The clubs have big debts to service and their revenue generation still pales alongside their peer group. For example, Serie A’s revenues total € 2.8 billion compared to the Premier League’s € 6.7 billion and the € 3.7 billion of the Bundesliga and La Liga. In the past decade, income has grown by 60% in Italian football, while the English Premier and La Liga has seen earnings increase by 130% and 100% respectively.

The big three clubs (Juventus, AC Milan and Inter) all saw revenues grow in 2022-23, but only Milan made a pre-tax profit (€ 13.5 million). Juve lost € 117 million, while Inter’s deficit was € 77 million. In the last five years, Italy’s big four (Roma are the fourth) have run up losses of more than € 2.3 billion.

Simply, most Italian clubs do not generate enough cash, which makes their combined losses of € 427 million in 2022-23 and total debts of € 3.2 billion seem rather precarious, despite being able to offset losses with € 587 million earned from player sales. Expenses, including wages, are a problem. Total costs were around € 3.85 billion in 2022-23 with salaries consuming 63% of income.

Italian football is no stranger to scandal and there has been a fresh wave of intrigue involving Juventus and now AC Milan. Juventus, who were embroiled in the Calciopoli scandal earlier in the 21^st century, were hit by a 15-point deduction over “false accounting” in connection with past transfer dealings. The points were restored after an appeal, but they eventually had 10 taken away. The club has accepted a € 20 million fine and a one-year ban from European competition.

Milan are now under the spotlight concerning the sale of the club in 2022 by Elliott Management to private equity group RedBird. The Milan HQ in Portello was raided by the Guardia di Finanza (Italian financial police) over claims that despite the sale, Elliott may still be controlling the club. The allegations have been dismissed as totally untrue by the club, but this saga highlights that Italian football could still have skeletons in its cupboard.

One of the hurdles is the number of clubs who cannot rely on equity contributions from shareholders. Juventus, however, have had three recapitalisations in the past four years receiving a total of around € 700 million from their shareholders. Consistent losses can erode capital but most of Italy’s clubs cannot follow Juve’s lead. Sampdoria almost went bankrupt last season and more recently, Hellas Verona saw their shares seized by the police as an investigation began over the solvency of the club’s owner.

Ultimately, Italian football needs to show more discipline around spending which will undoubtedly be encouraged by UEFA’s squad cost ratio, which comes into force in 2025-26. The cost of the squad (salaries, transfer amortisation and agent commissions) versus revenues and income from player transfers, must not exceed 70%. Football finance experts such as Football Benchmark’s Andre Sartori believe that stronger regulation will not only benefit clubs’ balance sheets, but will also increase the appetite of institutional investors and make their businesses more attractive. The time for change is now in Italy.