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Thread: The Financial Health of Inter

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    The Financial Health of Inter

    So, there's a lot of question about the financial health of Inter at the moment.

    We reported results for the previous season of -84 million USD, lets call it 65 million euros.

    Since then, whats happened?

    Money (m euros) Note Affect
    -65 Starting Point N/A
    -105 No CL -40
    -97 Manager going from 10m/season to 2m/season +8
    -56 Forlan, Cordoba, Lucio, Orlandoni, Zarate, Muntari, Pandev +41
    -49 Pandev transfer fee +7
    -42 Castaignos transfer fee +7
    -33 Assuming we get the max available money in the Europa League (taken from Villareal 10/11) +9
    -38 Handanovic's salary -5
    -41 Handanovic's fee amoritzed over 4 years (assuming 12m) -3
    -46 Guarin's salary -5
    -49 Guarin's transfer fee -3
    -52 Silvestre's salary -3
    -55 Mudingayi's salary (1.5m/season) -3
    -58 Palacio amoritzation -3
    -63 Palacio salary -5
    -53 Sale of Motta +10
    -45 Motta wage savings +8
    -41 Samuel renewal savings +4




    So this means for the next 2 seasons we can lose a maximum of 4 million TOTAL to comply with FFP


    If we make some assumptions, though...


    -39 Selling Cesar for 2m +2
    -31 Cesar's salary +8
    -24 Releasing Stankovic +7
    -16 Selling Maicon +8
    -8 Maicon's salary +8
    10 Selling Sneijder +18
    22 Sneijder's salary +12








    It becomes pretty immediately obvious what has to be done..


    This is before you even think about their replacements - e.g. Lucas, Debuchy, or even Poli?



    All in all, its pretty bad times at Inter. Its obvious that what we need is the revenue increase - a new stadium could generate a swing of as much as 60-70 million euros a season. Increased commerce could probably quite easily generate another 20 - 30 million euros...






    Hope this clears things up for you guys a bit, anyway, about our financial situation.


    edit;

    Forgot Palacio
    Last edited by .h.; 20 Jul 12 at 15:57.


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    We need to increase our revenue for things to be sustainable. Austerity alone will not work since we are rapidly approaching a state when we will not have valuable assets to sell but still need to cut costs.

    In the foreseeable future, our only opportunity to increase revenue is through CL money. I mentioned this last season when we dropped eto'o. All these "savings" are moot unless we are making CL.

    Maybe we should start cutting that "other" portion of the budget...you know, that nice, huge, 80mil chunk..
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    Quote Originally Posted by nerazzurri4life View Post
    We need to increase our revenue for things to be sustainable. Austerity alone will not work since we are rapidly approaching a state when we will not have valuable assets to sell but still need to cut costs.

    In the foreseeable future, our only opportunity to increase revenue is through CL money. I mentioned this last season when we dropped eto'o. All these "savings" are moot unless we are making CL.

    Maybe we should start cutting that "other" portion of the budget...you know, that nice, huge, 80mil chunk..
    I'd love for someone to tell me what that other chunk is, because its never documented anywhere...its probably moratti paying branca like 10mil a season for his services.

    ---------- Post added at 14:53 ---------- Previous post was at 14:47 ----------

    Piss, I just realized everything is off by 20 million, too





    edit2;


    Everything should be fixed now

    ---------- Post added at 15:03 ---------- Previous post was at 14:53 ----------

    of course this doesnt take into account matchday losses from not being in the CL, which is another 10 million.

    Sponsorship deals also generally vary depending on the competition you're entered, so we can rpobably expect to lose another 4m there. I DONT believe the Oknoplast deal is incorporated in this, either, but I didnt expect much cashflow from that anyway. The Indonesia tour probably generated something like 4-6mil (including shirt sales)


    we can probably guesstimate another -8m loss ontop of what is shown.

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    Well there are some rumors about, some investment from East " Asia ", but i guess that investment is due to " stadium project "

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    thats separate and not worth considering.

    if they pay for the stadium, it wont directly affect our books. if we do some merchandising boost, then we can talk

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    Quote Originally Posted by browha View Post
    thats separate and not worth considering.

    if they pay for the stadium, it wont directly affect our books. if we do some merchandising boost, then we can talk
    But do we know if the stadium is going to happen ?

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    Nope.

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    So looking at this selling Wes is an absolute necessity. With or without him its unlikely that we are going to make UCL football next season (my opinion anyway). And going far into the europa is a waste of time and efforts. what we need to be looking at right now, solely, is financial stability and new revenue streams. Anything other than that is seemingly beyond us at this point.
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    How i wish we have our own stadium already.
    We'll never make a good balance if we still sharing the stadium revenue.

    If we sill using salary budget tactic, we will never have long prospect key players.

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    Really nice post browha, I had some of these numbers in my head but could never see the whole picture.

    I'll discuss the implications later, but you might also want to add:

    +3 Chivu's wage reduction from 3,5 to 2,0 net
    +2 No ocurrence of Guarin's loan cost
    +2 No ocurrence of Zarate's loan cost
    +4 Zarate's wages
    +1,5 No ocurrence of Palombo's loan cost
    +3 Palombo's wages
    +1,2 Poli's wages
    +1 Faraoni's wages (just guessing)

    -2 Silvestre's loan cost
    -1 Increase in Nagatomo's wages
    -2 Coutinho's wages (estimated, as last season he earned only 0,6m net)
    -1,6 Mariga's wages
    -2,5 Jonathan's wages
    -2 Juan's wages (just guessing)

    It should be safe to add something like -4 from overall wage increase for all players (specially Primavera players who are going to play for first team)

    Do you really think we'll lose 10m just in matchday revenue in CL? Because we'll have less important matches but should play at least 2x to 3x more
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    Great post.


    This is what we really needed. With all these FFP talks, contract terminations and new signings we really need to know where we really do stand financially.



    So, if we sell Sneijder not only we balance our book, we can even end up making money? That's tempting but I'm not sure yet. It all depends on Strama and if he can get the best of Sneijder, also on Sneijder himself if he can stay healthy. I'm undecided about selling Sneijder but a bit leaning towards selling him.

    The thing is I want Sneijder to stay but we still need a winger, a midfielder and a defender + their wages. We might be fine this year but next year we might face some troubles balancing our books and selling Sneijder would be harder. I would rather sell Sneijder this year than terminate his contract next year.



    If I have understood correctly, according to FFP we can have 45 million loss this year right?

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    these values were calculated on the basis of the 10/11 books, not the 11/12 ones. So it isnt perfect - there's some approximations in it (like Zarate + Forlan = Eto'o wage wise). That the net transfer for that season is roughly 0 - which is probably not unreasonable considering the net gain on Balotelli, with amoritzation of the players we bring in over the period

    You have to remember we also have a write down on a few players this season too, on Lucio and Forlan's values (for example), which is probably 2-3m each.




    we can make up to a 45mil total loss in the next 3 seasons, so its not just this year as such.
    Last edited by .h.; 22 Jul 12 at 09:17.

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    Good point!

    So, if we don't sell Sneijder (and I don't think we will), we'll go from -65 to -15ish (if we don't manage to release Deki), because roughly:
    -30 champions league vs europa league
    +34 transfer fees out (JC, Maicon, Thiago Motta, Luc and Palmdev)
    +51 overall wage reduction

    If we take into account the purchases still to be made, this should take us to -30ish.

    Next season we won't have the transfer fees out but we should be back to CL (specially after all those sales by Bilan, Napoli and Udinese), so both these impacts are kinda break-even.

    So its wage reduction time again. The only contracts that expire in 2013 are Zanetti (he deserves his 3m net per season, but probably will get a wage reduction) and Mariga (0,8m net, will probably just leave with his contract not being renewed). Not even close to enough to close the 30 mill. So we'd need to cut some of:

    Sneijder (6m per season, contract until 15), Cambiasso (4m per season, contract until 14), Deki (4m per season, contract until 14) or Milito (4,5m per season, contract until 14).

    I think it could be done
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    the first thing we should do is get rid of deki and chivu. that would save us like 12m a season already. cambiasso could probably reduce a bit, as could milito. theres a lot of money to be saved there, if we try.

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    But Deki leaving means that we need another team needs to be interested in him, otherwise he'll just get those 4m net per season until 2014 (ack)... if any team would be up, then this would be one of the highlights of this mercato


    Chivu on the other hand is just our management screwing up again at its best. We had the perfect opportunity to get rid of him and we just give a contract extension? I still want to see how low did they agree on wages but I'm sure it's not low enough. Silvestre should cost us only 5m this season (2m loan + 3m from gross wages) vs rumoured 4m from Chivu!


    Cambiasso should probably retire by 2014 with the black and blue shirt.


    Milito on the other hand, I really don't know. I think that if we find a solid vice-Milito this year, then we will end up terminating his contract next year. But I'm not sure if we'll be able to find one.
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    sadly it is hard to see how we will conform in the long term

    our -41 this season includes +14 million in transfer fees already, so next season without any fresh sales or signings we're realistically looking at a -55 deficit.

    We'll see how it pans out, its a long way off.


    basically we fucking HAVE to make the CL and get to at least the quarters.

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    if we release maicon + jc + sneijder or milito + cambiasso we are not that in negative, as per your asumptions which seems very likely (except sneijder sale)

    but yeah, we need to get back to cl to break-even before we have our stadium
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    Great report Browha! Keep the post update throughout summer campaign.
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    Money (m euros) Note Affect
    -65 Starting Point N/A
    -105 No CL -40
    -97 Manager going from 10m/season to 2m/season +8
    -56 Forlan, Cordoba, Lucio, Orlandoni, Zarate, Muntari, Pandev +41
    -49 Pandev transfer fee +7
    -42 Castaignos transfer fee +7
    -33 Assuming we get the max available money in the Europa League (taken from Villareal 10/11) +9
    -38 Handanovic's salary -5
    -41 Handanovic's fee amoritzed over 4 years (assuming 12m) -3
    -46 Guarin's salary -5
    -49 Guarin's transfer fee -3
    -52 Silvestre's salary -3
    -55 Mudingayi's salary (1.5m/season) -3
    -58 Palacio amoritzation -3
    -63 Palacio salary -5
    -53 Sale of Motta +10
    -45 Motta wage savings +8
    -41 Samuel renewal savings +4
    -34 Sale of Pazzini to Milan +7
    -26 Cesar salary saving +8
    -27.5 Gargano loan -1.5
    -31.5 Gargano salary 2m post-tax -4
    -35.5 Pereira salary 2m -4
    -38 Pereira transfer fee amoritized over 4 years -2
    -33 Assumed 5m sale of Maicon +5
    -25 Maicon salary saving +8
    -26 Pazzini vs Cassano salary difference -1

    Dont think I've missed any of the new activity out. This will be current and correct if we sell Cesar to QPR for nothing & Maicon for 5m.



    If it wasnt for missing out on the CL we'd be up something like 5-10 million in FFP terms for the coming year..


    We can lose a maximum of 20 million in the next 2 seasons combined to comply under FFP.


    Basically we still need to offload more wages. Starting with Stankovic would be a good idea.... If we can get Wes to drop 2m off his salary too, that would make a huge difference. Theres some leeway in this too,

    ---------- Post added at 09:54 ---------- Previous post was at 09:42 ----------

    more importantly, though, updated for recent transfers


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    Thank you very much for your informative article....However this is just our balance sheet in terms of transfer activity. I guess if we factor other revenue streams like sponsorship into the equation, our financial situation will be a lot better than this. Fantastic job, however i hope you can get more information about the holistic revenue of the club, it would be much appreciated

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