Inter's Financial Situation

Is there somewhere where I can find more complete financial statements?

uhh, since we arent a full plc we dont get full investor reports, but i have seen some very detailed ones frmo time to time. if you're luicky enough to find one of those, please post it, otherwise we have to piece it together from forbes and deloittes (etc)

browha said:

Its official.

80 million euro loss for the season.


This means to qualify for the CL next year, we need to make 30 million - e.g. a swing of 110 million. That would involve firing every player we have on staff.


There is no chance in hell that will happen.


tl;dr If UEFA enforce FFP rules, Inter will NOT be eligible for the next 3 years minimum

---------- Post added at 12:46 ---------- Previous post was at 11:40 ----------

also to mention today:

The Kenny Huang consortium bid for Inter has NOT YET GONE THROUGH. I dont know if we're waiting on the diligence to clear, or similar, but it sitll has not yet gone through.

I wonder if it will be like last time he tried to buy a sports club, where it was all in place, and he pulled out at the very end when asked to provide proof of funds.

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Not true. There are deductibles that can be used to reduce that 80m figure. Namely the legacy contract clause, so there will be huge salary deductibles not to mention the deduction of youth team expenses and such.

Also, you are allowed to bring forward revenues to show that even if we don't make it we are showing signs of improvement.

So basically if we qualify for CL, we can show that our revenues are going up and we are drastically cutting wages. That trend should be enough to get us into the CL next season.

UEFA has to kick out PSG, Man City, Chelsea, Anzhi and others before they do Inter. At least our club is working hard to reduce wages. We can show that the drop in the revenue of the CL is a one off thing (because with our reduced wage club we are doing well).
The Consortium thing is more disturbing to be honest. We need someone to bring in cash so we can invest into the stadium. If this falls through we will be in trouble in the long run.

Yeah. Changes in expenditure/revenue ratio (to lower ratio) will be looked as positive development by UEFA. And that's what we've been doing. Revenue has gone down yes, but our expenditure has gone down also. And when we make it to the CL, our revenue goes up but I'm pretty sure our expenditure won't rise anywhere near at the same rate.

MANTA said:

Not true. There are deductibles that can be used to reduce that 80m figure. Namely the legacy contract clause, so there will be huge salary deductibles not to mention the deduction of youth team expenses and such.

Also, you are allowed to bring forward revenues to show that even if we don't make it we are showing signs of improvement.

So basically if we qualify for CL, we can show that our revenues are going up and we are drastically cutting wages. That trend should be enough to get us into the CL next season.

UEFA has to kick out PSG, Man City, Chelsea, Anzhi and others before they do Inter. At least our club is working hard to reduce wages. We can show that the drop in the revenue of the CL is a one off thing (because with our reduced wage club we are doing well).
The Consortium thing is more disturbing to be honest. We need someone to bring in cash so we can invest into the stadium. If this falls through we will be in trouble in the long run.

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And how many legacy contracts do we have? Most of our players were very stupidly renewed just after the treble, the legacy clause applies to pre-2010. Lets go through them! For the sake of brevity I wont even bother with people we';ve signed since, obviously
Castellazzi - renewed last summer
Zanetti - possibly pre-2010 contract
Samuel - renewed recently
Chivu - renewed in the summer
Stankovic - renewed post-treble
Sneijder - renewed post treble
Cambiasso - Not sure, possibly legacy
Milito - renewed post treble
So, please, don't act like the legacy clause is going to make any fucking difference for us


Youth team expenses at Inter are 6m euros a season. Again, little difference. We'll save MAYBE 10-15m a season in that. So that takes us from 80 to 65. Great. Still well beyond any FFP parameter. We have to have a swing in costs + revenue of 65 million next season, and then the season after another swing of 20 million to just make the FFP requirements. The former is not impossible if we get back into the CL, release Stankovic. That would roughly do it. Whats harder is making that last 20 million, it will require increased commercial revenue.


We're currently losing more money than we did last season, because of the loss of CL revenue. I would point out, though, that we would NOT be ineligible next season. There are another 2 years before any action is taken.


Last seasons results, Inter posted the 2nd worse loss in Europe. I keep saying this. Forget Chelsea, PSG, anyone but City, we're in worse shape than all of them. And even then, City is bringing in massive new revenue. I will not be surprised if we post the 2nd worse loss again this season in Europe (2nd to PSG).



Also, I dont see anywhere in the FFP rules anything about the expenditure/revenue ratio. It's something that people always talk about, but I've never seen it in the actual rules. I'm taking that with a pinch of salt.

---------- Post added at 09:11 ---------- Previous post was at 08:51 ----------

If you can find anything in here about it, I'd love to see the section

http://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/01/80/54/10/1805410_DOWNLOAD.pdf

Article 61 – Notion of acceptable deviation
1
The acceptable deviation is the maximum aggregate break-even deficit possible
for a club to be deemed in compliance with the break-even requirement as
defined in Article 63.
2
The acceptable deviation is EUR 5 million. However it can exceed this level up
to the following amounts only if such excess is entirely covered by contributions
from equity participants and/or related parties:
a) EUR 45 million for the monitoring period assessed in the licence seasons
2013/14 and 2014/15;
b) EUR 30 million for the monitoring period assessed in the licence seasons
2015/16, 2016/17 and 2017/18;
c) a lower amount as decided in due course by the UEFA Executive Committee
for the monitoring periods assessed in the following years.

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Because the next section deals with exemptions:

Article 63 – Fulfilment of the break-even requirement
1
The break-even requirement is fulfilled if no indicator (as defined in Article 62(3))
is breached and the licensee has a break-even surplus for reporting periods T-2
and T-1.
2
The break-even requirement is fulfilled, even if an indicator (as defined in
Article 62(3)) is breached, if:
a) the licensee has an aggregate break-even surplus for reporting periods T-2,
T-1 and T; or
b) the licensee has an aggregate break-even deficit for reporting periods T-2,
T-1 and T which is within the acceptable deviation (as defined in Article 61)
having also taken into account the surplus (if any) in the reporting periods
T-3 and T-4 (as defined in Article 60(6)).
3
The break-even requirement is not fulfilled if the licensee has an aggregate
break-even deficit for reporting periods T-2, T-1 and T exceeding the acceptable
deviation (as defined in Article 61) having also taken into account the surplus (if
any) in the reporting periods T-3 and T-4 (as defined in Article 60 (6)).

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And this magical exemption everyone talks about, I can never spot it in the UEFA legal documents...

---------- Post added at 10:28 ---------- Previous post was at 09:11 ----------

Its rumoured today we will appoint 2 or 3 more people from Juventus to take over things like marketing at Inter.

I'm not too bothered, personally, as long as they don't take over the referee co-ordination.

browha said:

And how many legacy contracts do we have? Most of our players were very stupidly renewed just after the treble, the legacy clause applies to pre-2010. Lets go through them! For the sake of brevity I wont even bother with people we';ve signed since, obviously
Castellazzi - renewed last summer
Zanetti - possibly pre-2010 contract
Samuel - renewed recently
Chivu - renewed in the summer
Stankovic - renewed post-treble
Sneijder - renewed post treble
Cambiasso - Not sure, possibly legacy
Milito - renewed post treble
So, please, don't act like the legacy clause is going to make any fucking difference for us

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Legacy contracts was calculated to be 66m by the Swiss Ramble. That includes Maicon, Chivu, JC, Samuel, Stankovic, Cuchu, Cordoba, Obi.

Renewing last summer does not omit the fact that they were legacy during last season.

Even assuming no other deductions that puts us at -14m. Not too bad. But we will probably have other deductions.

FTR, Swiss Ramble anticipated a total loss of 88m for 2011-2012 and based on that assumption our adjusted break-even for FFP came out to be -6m. We are 8 million better than those projections.

The FFP allows them to not penalize teams that show a positive trend (at their discretion). So it could be that every club will pass FFP, but if they were to follow the letter of the law completely with no exceptions only Arsenal will get through in the EPL.

To be frank with how we are cutting down in our wages and being one of the top 4 selling clubs in the Serie A over the last 4 years we are clearly trying to live within our means. Compared to clubs like Man City, PSG and Chelsea who are marching on as if nothing is wrong, we are clearly taking notice and trying to stem the rising costs.

Also, we are allowed to bring forward revenue from other seasons to show the positive trend. So if we qualify to the CL we can show that the revenue loss from this season was a once off and it shouldn't be too hard to argue even if the 2012-2013 numbers are poor that UEFA will look upon our expected revenue of 2013-2014 and judge us favorably.

MANTA said:

Legacy contracts was calculated to be 66m by the Swiss Ramble. That includes Maicon, Chivu, JC, Samuel, Stankovic, Cuchu, Cordoba, Obi.

Renewing last summer does not omit the fact that they were legacy during last season.

Even assuming no other deductions that puts us at -14m. Not too bad. But we will probably have other deductions.

FTR, Swiss Ramble anticipated a total loss of 88m for 2011-2012 and based on that assumption our adjusted break-even for FFP came out to be -6m. We are 8 million better than those projections.

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Well, if we're going to compare to 2011-2012...

Since then, we've lost 50m in CL prize money + gate revenue. We've also lost another 20-30m in TV money. All those legacy contracts (basically) are now expired/replaced. Contractual obligations went down 40 million last year, so lets remove that from the 66m deduction, and assume the rest were renewed. Thats sort of close enough.

So lets assume, as I stated before, that we have something like 15m in deductibles. Your -14m includes those of course. Now we add in 40m gains in wages we've gotten rid of. That takes us to +35m. Now we add in 70 million lost to CL revenue + TV money. That puts us at -35m. Commercial revenue will also decrease because of the level we compete at, and thats also before we allow for transfer expenditure. I also havent factored in write down on player values (for example releasing Cesar will probably be like a 5m write down. Releasing lucio is probably another 5m, etc)7

We spent something like 40 million last summer, before you include january, assuming the average contract is 3 years (probably about right) thats an amoritization to book of 14m a season. That means our loss will then be at 50m in terms of FFP for the coming season.



Basically we find ourselves in a ridiculous situation, where, the only way we can qualify for the CL (in terms of FFP) is to have the CL money coming in. Without the CL money, we don't qualify for FFP - remember that this coming season, and the season after will aggregate with last season to give us our first idea as to whether we can qualify or not.

If we already lost 15m last season, another 50m this season for not being in the CL, next season we must make 30 million (A swing of 80 on this year) to qualify. With increased CL revenue and so on, we're probably very damn close to that - assuming we make the Champions League this year. But it also means we have no transfer budget (alright, releasing Chivu and Stankovic will go a long way to that).


Whilst my main concern is still FFP, as you can see, Inter is still a ridiculous cash sink for Moratti. We're posting 80 million losses a season. If we had access to properly audited books, it'd be much easier to work out exactly whats going on, but sadly that isn't possible for us

---------- Post added at 17:09 ---------- Previous post was at 17:07 ----------

also, where are you pulling these swiss ramble numbers from I've read both of his articles on Inter, and his most recent one was nearly a year ago.



edit:

Sorry, found the swiss ramble numbers.

Lets just take that 6m loss as a given.


Now factor in amoritized transfer fees for Handanovic, Pazzini (yes, he will haunt us a bit here. Dont forget the write down in his valuation.), Cassano, Palacio, Pereira, Guarin. Palombo loan costs too.

Now allow for the fact that Milito renewed in July/August 2010 (after the deadline), we renewed Chivu and Samuel recently.Loan cost + salaries for Guarin, Gargano, Silvestre, Mudingayi.Subtract off the CL money.

You'll see its bad times.

Swiss ramble at the middle of last season did a projection on Inter for the results of last season. He put our FFP numbers at -6 million. We probably did better.

Even if our numbers this season go to shit because we aren't in the CL I am not worried, because if we qualify for next season we can show that this is a once off and get a favorable review based on annex XI of the rules

Projected break-even result
If the projected break-even result for the reporting period T+1 foresees a
surplus, it is likely to be viewed more favourably than if the break-even result
for the reporting period T+1 foresees a deficit. As part of its considerations,
the Club Financial Control Panel may also request a licensee’s longer term
business plan (for reporting periods covering T+2 and T+3) in order to better
understand the strategy of the club.

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So if we are projecting a huge surplus due to making it into the CL and we can get looked at favorably (basically our finances were crap this year mainly due to missing out on the CL)

I doubt UEFA will punish a club like Inter who are actively trying to cut costs while still maintaining a quality side. I think UEFA will look at what we have done over the summer in slashing wages while keeping the squad competitive and be a poster child of what they want clubs to do.

MANTA said:

So if we are projecting a huge surplus due to making it into the CL and we can get looked at favorably (basically our finances were crap this year mainly due to missing out on the CL)

I doubt UEFA will punish a club like Inter who are actively trying to cut costs while still maintaining a quality side. I think UEFA will look at what we have done over the summer in slashing wages while keeping the squad competitive and be a poster child of what they want clubs to do.

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Where did you get that quote from? What article on the link I posted above, specifically?


Yes, I agree, I sincerely hope they do that. But also remember we are the worst offender in this FFP Regulation thing over the last 20 years. Sure, their main target now are the Sheikhs, but lets not forget who practically invented it - Moratti and Berlusconi.

I got it from Financial Fair Play pdf at UEFA

http://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/01/50/09/12/1500912_DOWNLOAD.pdf

I read it over during last season, and basically UEFA is at their discretion who to punish, they could decide to give PSG a slap on the wrist despite them failing FFP miserably and it is still within their rules.

I don't think they will go after Inter mainly because we are doing everything in our power to improve the situation despite the situation in the Serie A being utter shit (almost no one owns their own stadium, marketing is shit, only 3 CL spots despite Inter's best effort to improve Italy's coefficient, economy is shit, very hard to get outsiders to invest in Serie A clubs).

Basically if they kick off Inter, they will have to kick off every other club in Serie A.

Sure, thats the same document I posted earlier, but which section has the actual clause? I didnt see anything in Article 62, 63, or 64, but maybe I missed it.

browha said:

Sure, thats the same document I posted earlier, but which section has the actual clause? I didnt see anything in Article 62, 63, or 64, but maybe I missed it.

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Annex XI

Most of the exceptions are in the Annex

Ahm ok. I assumed they'd be in the article which was called exemptions

Even if we can manage to squeeze by due to exceptions of improvement, we need to become a financially healthy club.

The huge loss for last season is really bad. If we consider returning to CL next year (very likely) + current wage bill + current amortization for players, how far into the red we would be?

Malacaxeta said:

Even if we can manage to squeeze by due to exceptions of improvement, we need to become a financially healthy club.

The huge loss for last season is really bad. If we consider returning to CL next year (very likely) + current wage bill + current amortization for players, how far into the red we would be?

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We lost 85m last season. We reduced wages by about 40m, so call it 45m. Now factor in some amoritization for Cassano, Guarin, Palacio... Probably talking -60m. We need to offload Stankovic and Chivu to look for something healither, e.g. -45m or so.

Basically, at the end of the day, that 'other' column in our books which sucks up like 60 million a season is killing us. Just ask N4L.

---------- Post added at 01:19 ---------- Previous post was at 01:17 ----------

sadly I think once we consider form and salary, Sneijder HAS to go. We offload him we're already 12m/season in the profit from that, before any net gain from sales (he's been 15m amoritized over 3 years already, on a 4 year contract. If we sell him at 15m, we're in the green 11m)

Inter7 said:

Im sure the stadium will bring us a lot of profit bacause we wont have to pay to rent the meazza. What we really need to do is brand this team outside of italy to get some more profit in.

Sent from my SGH-T999 using Tapatalk 2

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How much do we pay for using San Siro per season ?

I could be wrong, but I believe we pay a basic ground rent of 30million a season (roughly), and then a third of all ticket sales.

browha said:

I could be wrong, but I believe pay a basic ground rent of 30million a season (roughly), and then a third of all ticket sales.

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Wow, that means that in 2011 ( according to deloite ) we lost 5-10m euro from matchday instead of profiting - 30 milion matchday revenues and 30m basic rent + around 5-10m from the tickets .

If we really are paying 35-40 milion euro per year for San Siro, new stadium is a must, and if it costs 200 milion euro we can pay it with the money we have saved from San Siro rents for just 5-6 years.

P.S. I found somewhere information about 3m basic + 1/3 of the sales, which is looking more believable

Yea there is no way in hell we pay 30 milion euros each year for the renting of the stadium

nickname778 said:

Wow, that means that in 2011 ( according to deloite ) we lost 5-10m euro from matchday instead of profiting - 30 milion matchday revenues and 30m basic rent + around 5-10m from the tickets .

If we really are paying 35-40 milion euro per year for San Siro, new stadium is a must, and if it costs 200 milion euro we can pay it with the money we have saved from San Siro rents for just 5-6 years.

P.S. I found somewhere information about 3m basic + 1/3 of the sales, which is looking more believable

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Quite possibly. Been a while since ive seen the numbers.