Inter Milan maintain momentum on the field, but finances are frightening

INTER MILAN have revealed they lost an astonishing € 245.6 million in their title-winning season of 2020-21, a record loss for an Italian club and an indication of the fragile state of European football.

Inter’s revenues declined from € 372.4 million to € 364.7 million in 2020-21 and their losses more than doubled from € 102.4 million. According to Gazzetta Dello Sport, Inter had the second highest wage bill, their € 149 million topped only by Juventus (€ 236m). If these figures are accurate, Inter’s wage to income ratio was 41%.

Despite winning the scudetto for the first time since 2011, Inter lost their coach, Antonio Conte, and had to sell their key players Romelu Lukaku and Achraf Hakimi. They hired Simone Inzaghi from Lazio, who has kept the ball rolling and Lukaku’s replacement was 35 year-old striker Edin Džeko, which on the face of it, looked like a backward step. But Džeko has scored six goals in Serie A this season and may be one of the signings of the season. Inter are interested in adding to their squad in the January transfer window and have Chelsea’s Marcos Alonso and Arsenal keeper Bernd Leno on their shopping list.

Inter’s full figures haven’t been released yet, but the club claims it is financially secure, thanks to a cash injection received from private equity company Oaktree Capital Management totalling € 275 million. Should Inter’s owners, the Chinese company Suning, fail to service its debts with Oaktree, the US company could take over Inter in much the same way Elliott Management took control at AC Milan. Inter’s fans are certainly sceptical about the involvement of a private equity company.

Inter’s troubled owners were keen to sell the club at one point and appointed Wall Street giants Goldman Sachs with that intention in mind. However, they eventually secured the cash to keep Inter stable. Inter’s CEO, Beppe Marotta, said the club’s situation is typical of European and Italian football at the moment and that consistency and stability come first and foremost at present. He added that the same of some “important assets” had enabled the club to come through a difficult time.

Marotta is referring to the sale of Lukaku and Hakimi, which brought in € 175 million at the start of the 2021-22 campaign, which should enable Inter to reduce its deficit. Their biggest outlay was Zinho Vanheusden of Standard Liege, who cost € 16 million. Denzel Dumfries of PSV Eindhoven was also acquired for € 12.5 million. Džeko was a free transfer from Roma.

During 2020-21, Inter underlined their ambitions to compete with Juventus, and unveiled their new visual identity as a modern, digital brand that aims to appeal to younger generations. It was mildly controversial and opinion is divided over the campaign and the logo.

Inter have also launched  a cluster of new partnerships that will enhance their sponsorship arrangements. Socios, the Blockchain-backed company, is the club’s new shirt sponsor, replacing long-time partner Pirelli. Lenovo, the Chinese computer firm, is the back-of-shirt sponsor and Zytara Labs is the name on the sleeves of the famous black and blue striped strip.

The future of the San Siro stadium remains unclear, although recent news suggests that Inter and AC Milan may be able to get their project off the ground in the next few months. The design entitled “The Cathedral”, submitted by Populous, is the favourite proposal, although “The Two Rings” by Manica/Sportium, is still in the running.

Inter remain unbeaten in Serie A, but their UEFA Champions League campaign has had a stuttering start. The Nerazzurri were beaten at the San Siro by Real Madrid and drew 0-0 away at Shakhtar Donetsk. At present, in a season that could be quite open in Italy, Inter have every chance of regaining their title.

China’s football faces a lengthy trek for credibility

CHINA’s dream of hosting and winning a World Cup looks a little forlorn at present, the national team has stalled and the Chinese Super League (CSL), once the destination for pension fund-building players and football mercenaries, is at something of a crisis point. 

The world looked to China in the aftermath of the 2008 financial crisis, along with Brazil, India and Russia, the so-called BRICS. These economies were supposed to take up the slack as more mature markets struggled to come to terms with debt, economic stagnation and banking crises. Over a decade later, China finds itself at the centre of the covid-19 pandemic and another economic challenge.

Over zealous

China grew at an alarming pace after the financial crisis and against this backdrop, the country’s football clubs started to go international, spending large sums on talent in a bid to make the Chinese Super League a compelling product, both domestically and internationally. Moreover, Chinese investors started to buy stakes in European clubs, including Inter Milan, Wolverhampton Wanderers, Manchester City, West Bromwich Albion and Atlético Madrid. Some investors overpaid for their assets and also took on high levels of debt.

The initial strategy  – which appeared over-zealous at times – was to assist President Xi Jinping’s ambition for Chinese football by learning to run big clubs in other countries. Then they started to withdraw as the Chinese government discouraged further investment and insisted investors had to demonstrate synergies between their international business and Chinese football. The underlying concern was that money being poured into foreign football would be better spent at home. Furthermore, some critics believed Europe was literally feeding off of China’s huge resources and enthusiasm, and not just around football. China’s outbound cross-border mergers and acquisitions fell sharply. In 2017, there were 20 Chinese-owned clubs outside of China, that figure has halved since then.

With the world suffering from the covid-19 pandemic, China’s economy is bouncing back in 2021, GDP growing by 18.3% in the first quarter of the year. This was largely anticipated by analysts as a year ago, China’s economy contracted for the first time in decades. This downturn impacted China’s football, for most clubs are owned by major corporations. Hence, the fortunes of the clubs are precariously linked to their owners’ performance.

A case in point is the tale of 2020 Chinese Super League champions Jiangsu Suning, owned by the Suning Appliance group. In December 2020, all the shares of Suning Holding group were pledged to Alibaba’s Taobao to secure a loan. To stave off liquidity concerns, Suning announced it would buy back US$ 305 million worth of bonds with its own capital. This triggered a slump in the company’s share price. Despite China’s economic growth, many of its major corporates are having financial difficulties and Suning announced in February that it would dissolve the Jiangsu club. A lot of people are unhappy and claim that Jiangsu were sacrificed to ensure Suning’s other interest, the new Serie A champions Inter Milan, could continue. The Chinese government has bought a 23% stake in Suning, clearly to protect one of their most prominent commercial names. Another thought is that should China be responsible for the collapse of one of Europe’s greatest clubs, the president’s football dream would suffer a mortal blow.

Jiangsu are not the only club to disappear – 20 clubs have left China’s professional leagues over the past two years and in 2020, 11 were expelled for financial problems and five more opted for voluntary liquidation. The way Chinese clubs operate  – 70% of total expenditure on player wages was commonplace – suggests that more may follow. For example, Guangzhou Evergrande, Chinese champions eight times in 10 years, earned only a third of the US$ 450 million they spent in 2020. In 2019, the average Chinese Super League salary was US$ 1.2 million per year, which was more or less at the level of France’s Ligue 1. Even though crowds have remained stable in normal times, tickets are cheap, often the equivalent of below US$ 10. 

Without big-spending companies such as Fosun, Wanda, CEFC and TEDA, Chinese football would not have made the noise it has so far, but clubs are now forbidden from including their sponsors in their club names. Guangzhou Evergrande and Guangzhou R&F are now known as Guangzhou FC and Guangzhou City respectively. Some analysts believe Chinese football should abandon single-owner models and implement multiple stakeholder structures that include government, private enterprise, local communities and high net worth individuals. Instead of relying on regular injections of life-saving cash from their parent companies, Chinese clubs need to build more revenues from sponsorship, matchdays, player trading and broadcasting.

The government has also insisted on salary caps, imposing a limit of five million yuan for Chinese players (€ 650,000) and € 3 million (Yuan 23 million) for foreigners. Chinese players averaged € 709,000 annually (double the well established J-League) compared to € 7.5 million for foreign players. As a result, there has been an exodus of overseas players from China. 

Continued faith

Unsurprisingly, the corporates are now being encouraged to keep faith with Chinese football. The President of the Chinese FA, Chen Xuyan told them they have a responsibility and to treat football as a public welfare issue and accept that it may be non-profitable. No other country could issue such a statement and expect to get away with it. And there’s more – there is currently a political move to get more players to join the Communist party. 

Meanwhile, the new season is underway and China’s World Cup qualifying campaign is in progress. There are still some star names, but they are getting older – Oscar, the former Chelsea midfielder who went to China at the peak of his career, is now 29; Marouane Fellaini of Shandong Taishan is 33; Marko Arnautović is 32; and Mousa Dembélé is 33. With the restrictions on pay, the Chinese Super League is not as attractive to the “have boots, will travel” contingent.

The national team has beaten Guam and the Maldives in the second round of the World Cup qualifiers but they have Syria in their five-team group, who have already beaten them. World Cup qualification would be a boost to the domestic game, but China are still lowly-ranked (77th) and languish below countries like Curacao and Cabo Verde. More positively, soccer schools are opening all the time and youth development has also benefitted from foreign involvement, such as Bundesliga clubs. A football culture is developing in China, but maybe not at the speed government officials envisaged, fans are distracted by their interest in the European game, notably the Premier League. China may eventually become a powerhouse in the distant future, but right now the journey looks a long and patient one, but it will remain an interesting story.

Photo: ALAMY

Soccer City: Shanghai – in the eye of the storm

CHINESE football is in suspension at the moment and the future looks very uncertain as the Coronavirus grips the world. Indeed, China as a whole, along with its trade and international reputation, is certainly all under threat.

Shanghai is China’s economic behemoth, a description more in keeping with its modern-day status than twee tags such as “the pearl of the Orient” or the “Paris of the east”. Shanghai is China’s wealthiest city and will be one of the host locations when the country stages the FIFA Club World Cup in 2021.

Given the city has a population of 24 million, making it the third biggest “megacity” across the globe, it is no surprise that Shanghai has two major clubs in China’s footballing economy: Shanghai SIPG and Shanghai Greenland Shenhua.


China’s ambitions in world football are well documented and the Chinese Super League (CSL) has grown significantly over the past decade. Average attendances, for the time being, may have plateaued and with the Coronavirus likely to impact on crowds going forward, when the CSL eventually comes out of quarantine it will be very interesting to see what the Chinese public’s appetite is like.

The average gate in the CSL was 24,000 in 2019, a figure that has remained more or less constant over the past five years. Shanghai SIPG and Shanghai Greenland Shenhua both averaged 21,000 in 2019, but SIPG have moved to the 16,000-capacity Yuanshen Sports Centre for the 2020 campaign while a new stadium is being built for the club in Pudong.

SIPG is the acronym for Shanghai International Port Group, a conglomerate that also owns two Chinese banks. They took over in 2015 and Shanghai SIPG became one of the more aggressive Chinese Super League clubs over the next couple of years in the market, signing Oscar from Chelsea for £ 60 million and Hulk from Zenit St. Petersburg for £ 45 million.

In 2018, Shanghai SIPG won the CSL with Oscar and Hulk playing key roles. While Chinese striker Wu Lei was top scorer with 27 goals, the Brazilian duo provided 19 and 12 assists respectively.

The club’s penchant for Brazilians has continued this year with the signing of Ricardo Lopes, who has joined from South Korea’s Jeonbuk Hyundai Motors. Lopes described Shanghai as a “charming international metropolis” and said he was “full of motivation and desire to fight for the honour of the team”.

But the Chinese transfer market has virtually collapsed due to the virus as well as a number of measures introduced by the Chinese Football Association to encourage clubs to develop their own talent. These include a 100% tax on foreign signings of more than 45 million yuan, the equivalent of € 6 million, and a salary cap that restricts players from earning more than € 3 million after tax. Fortunately for Shanghai SIPG, these rulings do not apply to existing contracts. Oscar, for example, is reputed to be earning € 26 million per year.

Shanghai Greenland Shenhua play at the 33,000-capacity Hongkou stadium, the first football ground to be built in China. The club itself is from Kangqiao, a suburb of Shanghai. In 2012, the club’s then-owner, Zhu Jun became very ambitious and signed players like Didier Drogba, Nicolas Anelka and Giovanni Moreno in a bid to make them into title contenders. This era ended in 2014 when Greenland Holding Company bought the club and changed its name, a move that did not please many of the supporters. The last time that Shenhua finished top of the table was in 2003, but the title was taken away due to match-fixing.

Shanghai Greenland Shenhua won the Chinese FA Cup in 2019 for the second time in three years, beating Shandong Luneng Taishen in the two-legged final and qualifying for the AFC Champions League 2020. The current squad includes Moreno and Italian winger Stephan El Shaarawy. Nigerian forward Odion Ighalo has recently gone on loan to Manchester United.

Shanghai SIPG finished third in the CSL in 2019 and also gained entry to the AFC Champions League. Chinese clubs have only been AFC winners three times and no team from Shanghai has reached the final. The competition has also been put on hold and neither SIPG or Shenhua have started their group stage games yet.


With both Shanghai clubs in the CSL enjoying strong backing, it is unlikely they will be under the sort of pressure other Chinese clubs are currently experiencing. Tianjin Quanjian, which has now changed its name to Tianjin Tianhai, is currently being managed by its local Football Association after the arrest of the club’s leader in 2018. The club avoided relegation in 2019 but its finances are in a bad way and, almost in desperation, Tianjin Tianhai is now available to be taken over free of charge. The Coronavirus, coupled with China’s economic slowdown, has placed a number of other clubs in a precarious position.

That includes Shanghai Shenxin, who have quit the Chinese Football Association’s professional league after failing to pay their players. The club has appeared in the CSL but was relegated in 2015. China’s lower division clubs have been paying far too much in players’ wages, leaving little flexibility in the event of an economic downturn. With football now in limbo, they have become even more vulnerable.

As for the CSL clubs, the government is insisting that players must undertake “spring military training” while football waits to resume. Nothing, it seems, must get in the way of President Xi Jinping’s dream of making the country a footballing power. Teams must undergo 16 hours military training every week and players must not allow their body fat percentage to go above 11%.

Should the crisis prove to be very extensive, Chinese football will not be the only league that comes under pressure. There are lessons to be learned, mostly about provisioning for bad times as well as good and not to allow club finances to become over-exposed to short-termism. When the dust eventually settles, Shanghai, with its financial clout and influence will surely remain among China’s top football cities. The question is, how much damage will be done elsewhere?


Photo: PA