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Inter Milan: The Best Broke Club in World Football?

March 29, 2024
Investigation Piece, Serie A Analysis

Since about 2020, you could argue that Serie A was the most exciting and unpredictable of the top 5 leagues. Whilst the Premier League was dominated by Manchester City, the Bundesliga was in the clutches of Bayern München and La Liga’s big sides continued to do as they pleased, Italy has seen Juventus’ dominance ended and subsequent title wins by Inter, Milan and Napoli, with the Scudetto being hotly contested each year.

 

This season, you’re all probably thinking that Inter have emerged as the new dominant force in Italian football, comfortably leading the league by 15 points and have turned to more interesting stories in Europe, with the Bundesliga finally being exciting after 10 years, a three-horse race in the Premier League and Girona’s remarkable rise. However, Inter’s situation is a very unique one in that they are probably the most successful bankrupt team in history.

 

Remember that old story of the apple that was beautiful on the outside but rotten on the inside? Well in this article, I will try to explain how Internazionale Milano are an apple with a rotten core that plays beautiful football and somehow manages to remain competitive.

 

 

Our story starts in 2010 in Madrid, where Inter have just defeated Bayern München through two Diego Milito goals to be crowned treble winners under Jose Mourinho. The man who led the first Italian team to ever win a treble would stay behind in Madrid, would stay in Madrid however, signing on with Real Madrid ready to face Pep Guardiola’s tiki-taka.

 

In his place came Rafa Benitez, who was sacked mid-season and his replacement, Leonardo couldn’t achieve more than a second-place finish and a Coppa Italia win. At that time Inter had been owned by Massimo Moratti since 1995, who had made his fortunes in the oil industry, taking over the Saras group started by his father, who at one point controlled 15% of Italy’s oil industry.

 

Following nearly two decades in which he took inter from perennial underachievers to one of the biggest teams in Italy, whilst reportedly spending €1.5bn of his own, most on superstars like Ronaldo, Luis Figo or Roberto Baggio, the Italian businessman made the decision to look to outside investment, as world football entered its current hyper-consumerist stage and the money involved in football reached new levels of insanity.

 

In 2012, Chinese businessman Kenneth Huang looked to buy a minority interest in the club, with the China Railway Construction Corporation Limited, one of the biggest construction companies in the world at the time, looking to partner up with Inter on a new stadium. The deal however collapsed and Huang had previously been involved in a similar attempt to buy Liverpool in 2010 erroneously claiming that a part of China’s sovereign wealth fund was his partner.

 

 

When an investigation looked into this claim it found that said sovereign fund had no knowledge of him and Huang himself had made further false claims regarding him being on the board of directors of a Chinese bank and regarding various degrees he had not obtained studying in the US. Just one year later, a new investor was found, this time one who would take over a majority stake in the club, 70% to be precise, namely Erick Thohir alongside several partners.

 

The Indonesian businessman and politician, who has built his wealth through the Mahaka group, a sports-focused media group has owned several sports teams throughout his life, most notably DC United and the Philadelphia 76ers and is currently the co-owner of League One club Oxford United. His time in Italy was, let’s just say, less than fortunate with Inter finishing 9th 5th and 8th during his time in charge, whilst breaching financial fair play regulations in 2015.

 

Salvation for Thohir was soon on the horizon as everybody’s favourite teddy bear Xi Jinping sent his billionaire minions out into the world and told them to buy as many football clubs as possible and return home with as many superstars looking for a paid vacation as possible. It was around this time, in 2016, that Inter’s current owner Steven Zhang came into the picture.

 

His dad Zhang Jingdong was one of the founders of Suning, one of China’s biggest e-commerce retailers, and its offspring Suning Real Estate and the Suning appliance group. His son was reported as one of the driving forces behind the buyout, which not only acquired Thohir’s share but also the remaining shares of the Moratti family. Over the next four seasons, the Chinese ownership presided over three fourth-place and one seventh-place finishes whilst finishing nearly every season in the red financially in terms of transfers.

 

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During this time, every savvy transfer like Milan Skriniar, Alessandro Bastoni or Lautaro Martinez was counterbalanced by average signings for inflated fees like Joao Mario, Gabriel Barbosa, Stefan Jovetic or Valentino Lazaro. Of those Joao Mario and Lazaro are the two most grievous ones, costing more than €60 million combined and leaving the club for free and €4 million respectively.

 

If this were any other team, in any other league, in any other time period, these losses would have been papered over and would mean some belts needed to be tightened in the upcoming transfer seasons. However, Inter were at the time in the eye of a perfect storm that would eventually lead them to the financial situation they find themselves in today, in around €400 million of debt.

 

Throughout the 2010s the increase in revenue present in other top European leagues was not felt in Italy, as levels had been almost on a plateau since the early 2000s increasing by small amounts every season. At the same time, the Premier League experienced a sharp uptick in its revenue, whilst the Bundesliga and La Liga comfortably overtook Serie A by the end of the 2010s. However, in terms of wages, the three leagues remained somewhat level.

 

As Italian football was beginning to see more money come in around 2018 and Steven Zhang became the president of Inter and the youngest ever chairman of the club at just 27 years old the fortunes of the club seemed to be on the up under Luciano Spaletti. In 2019, Antonio Conte joined the club, with Spalletti receiving a €25 million payout, and missed out on the Scudetto to Juventus by just one point.

 

 

That same season big money signings Romelu Lukaku and Christian Eriksen arrived amongst others taking the total expenditure of the club to nearly €200 million and ensuring they were ready for the title fight to come. Said title fight experienced a major interruption that year as the Coronavirus pandemic hit Europe, with Italy being especially badly affected.

 

The next season the spending continued with the marquee signing of Achraf Hakimi for €43 million and Conte guided the team to a first Serie A title in 10 years. He would subsequently leave at the end of the season stating that he did not consider he could take the team any further, probably sensing the impending financial woes. In his stead came one of the most underrated managers in world football at the moment, Simone Inzaghi, just as people started to realize the immense gaping chasm Inter found themselves in financially.

 

In his first season in charge, he lost out on the title to bitter rivals AC Milan, but managed to win the Coppa Italia and that very same season was the first time since 2016 that Inter made a profit in the transfer market. And what a profit it was, amidst cheap signings like Denzel Dumfries, who only cost €14 million, something I still think about when I can’t sleep at night, and the huge departures of Romelu Lukaku and Achraf Hakimi, the club raised more than 150me.

 

At the time Inter’s debt stood at around €600 million. That would be small peanuts in the world of football, especially for a club owned by one of the biggest conglomerates in China, but the Covid pandemic ensured that that conglomerate was on the edge of a cliff.

 

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Amidst legal battles with the Chinese division of Carrefour, yearly losses in the billions of dollars, multiple bailouts by the Chinese state and the bankruptcy of Suning’s Chinese Super League club Jiangsu in 2021, Suning’s European holding company, Grand Tower, based in Luxembourg, took out a €275m loan from Oaktree Capital Management in order to keep themselves liquid.

 

This loan has an end date on the 20th of May 2024 and could see the club fall in the hands of the American asset management firm as reported by James Horncastle of The Athletic. Meanwhile, Zhang’s empire was facing a court case by the China Construction Bank over 250 million Chinese Yuan in unpaid debt, but Zhang Junior maintained that the club was not for sale. Despite Xi Jinping losing interest in football and many Chinese owners closing up shop in Europe, the Chinese Super League being effectively gutted of European talent and money, he held onto his club with a strong grasp.

 

Besides Chinese owners, Inter were at the forefront of another trend in recent years, partnering up with Digitalbits, which sounds like a service where you see people’s bits on the internet and God knows we have enough of those, as football became more and more interested in the crypto market. This saw their main shirt sponsor Digitalbits default on around €30 million and being replaced by Paramount+ in another cautionary tale regarding the joke that is the crypto market.

 

Last season, Inter shifted a lot of its deadwood taking a hit with free transfers just to get some wages off the books. The Scudetto would elude them again as Napoli surprised everyone in the league but retained the Coppa Italia and narrowly missed out on the Champions League to Manchester City as well as winning the last five derbies against AC Milan. Reaching the final was no doubt a boon in terms of revenue, coupled with the sale of Andre Onana to Machester United last summer for €50 mil.

 

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Onana’s departure alongside those of Marcelo Brozovic to Al Hilal, Edin Dzeko to Fenerbahce and Milan Skriniar to PSG were made easier by the club being extremely intelligent in the market by signing Marcus Thuram on a free and Benjamin Pavard and Yann Sommer from Bayern for less than €40 mil combined. Their impact has been immediate as Inzaghi has proven once again that he can replace any player and continually make the squad better.

 

At the time of writing Inter haven’t lost a game since September in Serie A and have just narrowly lost to Atletico Madrid in the Champions League. Even though Steven Zhang maintains that the club is not for sale, the Raine Group, who handled Todd Boehly’s takeover of Chelsea are reportedly guiding Inter through a potential sale process. The benchmark for the price has been set by their crosstown rivals AC Milan who were acquired by Red Bird Capital in 2022 for €1.2 billion. However, a potential sale is complicated by several reasons.

 

Chief amongst those is the debt, which still stands at around €400 million and the future plans for the San Siro. Initially, the two Milan rivals unveiled plans for a new venue called La Cattedrale in 2019, but of course, a huge project like that could not go ahead whilst Inter were looking down the back of every couch in their club offices trying to find extra funds.

 

The stadium situation is further complicated by Italian authorities not being exactly enthusiastic at the prospect of Serie A teams building new stadiums. Most of Serie A’s stadiums are owned by the municipalities the teams are based in, municipalities which are very reluctant to see the clubs move to new venues, which would leave them without part of the revenues and saddled with giant white elephants with no purpose.

 

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In September of last year, AC Milan abandoned their black and blue cousins and announced they are building their own stadium in San Donato Milanese, a suburb in the south of Milan. As for the San Siro, luckily for fans who appreciate its beauty and history, it is going nowhere at least until 2026, when it will host events at the 2026 Winter Olympics and Paralympics.

 

With the recent success of the team the Zhang family is probably looking for a big payout to offset his major losses in other areas over the past few years, having bought Inter for just over €200 mil and sunk a further €900 mil in the years of their ownership. And still, somehow during all of this upheaval and turmoil Inter have constantly looked like the best and healthiest team in Italy.

 

A big part of that is Simone Inzaghi working wonders with a squad that was in a constant process of renewal managing to bed in new signings seemingly instantly and making fans easily forget the big-money departures. An even bigger part is the financial situation itself, and I know that saying that a club can massively improve by nearly bankrupting itself is verging on insane but that’s exactly what Inter did.

 

Before their financial woes managers were appointed and fired constantly with big pay-outs in the pursuit of an imaginary level of performance the inflated fees paid for mediocre players demanded. Since 2021, Inter have been forced to change their approach drastically, putting their complete faith in a manager who produces results without demanding superstar signings every summer and finally ceasing to splash the cash on overpriced flops.

 

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One of the reasons behind their improved transfer strategy has been Beppe Marotta, appointed as CEO in 2018, who had previously presided over the near decade of dominance Juventus experienced during the 2010s. His approach of cheap signings, of which Paul Pogba’s arrival at Juventus on a free and subsequent record-breaking sale is most impressive, has continued at Inter with the likes of Marcus Thuram and Andre Onana.

 

If any new owners are to come in, Marotta and Inzaghi, alongside a renovation of the San Siro, which would be much cheaper than a completely new stadium, are going to be (as it says on their shirts) Paramount to Inter replicating Juventus’ success during the 2010s.

 

By: Eduard Holdis / @He_Ftbl

Featured Image: @GabFoligno / Mattia Ozbot – Inter / FC Internazionale

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