Just a brief look at the loan with an obligation to buy, some of the pros and cons.

Reposted from here

I’m going to have a look at our new model – the ‘Loan with an Obligation to Buy’ model, which we’ve used so far already for M’Vila, Dodo, and are rumoured to be extending to cover players like Javier Hernandez, Jovetic, as well.

Dodo, a benefactor of Inter's New Model

Inherently, given our current regime, this is exclusively related to financial benefits for the club. I’m also not here to talk about the specific implementation of this new model with every single transfer we make with it (i.e. I have some issues with Dodo’s single game obligation to purchase clause), but rather, the jist of what we are trying to do.

As with many of my writings, first, a brief history lesson. Post treble, we have suffered greatly from large panic purchases, which have in turn overburdened the budget in individual seasons, as we desperately try to boost our squad quality – generally in the winter transfer windows, too. Our ‘new model’ here is to move away from this, and look towards the long term financial viability of this club. Dodo has signed on a two year loan, and if he plays even a single game we have to sign him outright for nearly 8 million euros – but clearly he’s been signed with a view to his long term performances and development. If we sign him in two years time, and he develops as we hope, then the price of Dodo for the first two years is essentially the 1.2 million euro loan fee we have paid for him. We’ve essentially offloaded Dodo from our transfer books until 2016/2017 – which in turn means we can hope not to burden our books until then. This should go a substantial way to ‘buying us time’ to fix our revenue, and bring back the club to profitability, before – hopefully – in 2016 being able to afford some of these transfers.

In many ways, this is a credit purchase plan – we’re offsetting future money for this transfer in the hope that this transfer can deliver what we need now. And thus, we find, our new model.

Matias Silvestre, New Model or Old Disaster?

At this point it is useful to enter in some caution. This ‘new model’, of course, has been tried before at Inter – you may indeed remember the transfer of Matias Silvestre, and ask how these are different cases. And it is a fair question – of course. I would be pushed to say that the difference originates from the type of player we are targetting. M’Vila is a 24 year old defensive midfielder who is, whilst a gamble, a hopeful player for us to evolve into a top talent, and Dodo is a young left-back who perhaps could indicate the movement of Nagatomo to RB? Silvestre, on the other hand, was brought in to perform at the top of his game, at his alleged ‘peak’, and clearly didn’t perform.

If we continue to bring in players on this level to Inter, I will be quite pleased. The model of signing ‘prime’ players has not been exactly successful – with Inter lacking the budget, or the Champions League participation – to compete for the very top players who can add quality to the squad, instead having to settle for ‘gambles’ like Silvestre, Kuzmanovic, etc, who may not be capable of contributing to our needs.

M’Vila, Dodo, and hopefully someone like Jovetic, can all grow. We’re now resorting to signing younger players who, whilst still gambles, have the potential to develop into the players we need. Balanta would also be a similarly great signing, as by all accounts he could one day be a brilliant defender if developed the right way. Juan Jesus, to Moratti’s credit, is a shining example of this. Kovacic is one in this ilk, as well, and we need more signings in this vein, along with certain crucial top signings to reinforce key parts of the team (i.e. Vidic).

It will be interesting to see where this goes, and who we sign. We clearly need a new CB, a new Striker, and perhaps a midfielder. We also need to offload a large number of players. But from a financial perspective, this could be very astute. If nothing else, it is at least a roll of the dice in a different direction, rather than the exercise-in-futility we have observed in the last few years by continuing down the same path all the time.