Inter's Financial Situation

[Corrode]

Man united, Man city, PSG, RB teams (Salzburg, Leipzig), Atalanta, Napoli, Lazio ( some media report them as the Italians who earned most profit last year +€75 M ) etc

 

[.h.]

Can you name a successful self-sustaining club?

nadz hit it nicely. Bayern, Real, etc. Hell, even Atalanta are quite a successful self-sustianing club; albeit we want success a 'tier' above them, but they're on a great path.

 

[.h.]

Real Madrid is in huge debt and has the backing of the Spanish state and the Madrid council as they help them get loans on favorable terms or help them write off bad debt. And Real Madrid is not a company, it's a non-profit organization with members.

Bayern Munchen relies on what @.h. calls unsustainable. That is, their fans are the owners, that is 75% of the club is fan-owned. Then you have Allianz, Audi and Adidas with most of the rest and a few other minor shareholders that do not pump money into the club. Their source of revenue is the classic stuff, television rights, tickets, UEFA and so on.
Ajax is similar, also around 75% fan-owned. The rest is floated in the stock market and they have 3 major shareholders (over 5%) iirc.
These three are clubs that depend a lot on their fans subscribing to these clubs, not only for membership fees but it also serves as an indication for sponsorships. (Benfica and Porto are similar.)


Liverpool did not really start as a self-sustained club under the Americans, that only came after they sold Coutinho and with Klopp's prudent transfers and on pitch success. Liverpool not making the Champions League twice in a row would make our financial mess under Thohir look like a playground compared to those guys. They are not genuinely self sustained as they still rely on pumping from the Americans. And they're not really big spenders either, but they're lucky to have revived the brand so they get a lot of sponsor deals for the time being. If a new owner takes over without paying a dime to get the shares, he'll need to pump money to maintain this standard.

Atletico Madrid is in a financial mess, has probably the biggest debt of them all and their owners need to pump 100-200m a year to keep them competitive.



Next?

I've never once said a fan-owned club is unsustainable, wtf?

It's basically impossible for a major non-fan owned club right now to become fan-owned, because the fans need to raise the capital to buy the equity. At Inter, that means roughly 1 million fans paying 1000 euros each - which I dont think will ever happen. As we're run right now, too, that would be heavily reliant on continual cash injections every year to cover operataing costs.

 

[.h.]

In the cases of Man Utd and Arsenal it's more about bad management than money. With the amount of money they spend every year they should be fighting for titles but they make one bad decision after another. Especially Man Utd.

Indeed. We also need to separate out the football performance and the monetary performance. At the end of the day, Arsenal, United, etc, ARE self-sustaining clubs, but ones that just choose to spend money badly. They still have the financial means to drop 100m+ in a transfer window if they want to, which is an envious position for us.


re Liverpool - yeah, of course, a few people take credit for it, in the same way Conte and Suning get credit for Inter's recent successes, but still.

Proper execution relies on having a good team, a clear strategy, and the alignment in execution.



Liverpool's trajectory, for me, was inevitable. Dont get me wrong, it may have taken more years, it may have required different managers, etc, but the mentality and direction brought to the club by Fenway was always in this direction - and in Klopp, they intentionally (not accidentally) found the right guy to execute the sporting side of it, while they executed the commercial side of it. We can't be so flippant as to chalk it up to pure fluke.

 

[.h.]

Also one thing to add

In many ways this is a moot conversation.
Pre-pandemic, if we hadnt spent the money on Vecino, Nainggolan, and like one other unwanted shitter (e.g. Gabigol), we WOULD have been profitable.


To stress again, it's fine for football clubs to lose money - there's a continual investment cycle into the team. We need to be operating profitable, rather than net profitable. If we then choose to invest money so we keep improving the team, then that's great.


Remember, Inter right now we're on the cusp of substantial potential revenue growth. In the next 5-10 years, we could hope for a new stadium bringing in media specultaed up to like +60m a year in revenue, if we start to make the CLR16 regularly that'll free up probably like 25-35m a year of additional revenue, our sponsorships have headroom to move up maybe another +40m a year in revenue

With all the matchday revenue coming back, too, that's +100m. The only thing that probably doesnt move in the short term (sadly) is Serie A broadcast revenues.

 

[CafeCordoba]

What are we even arguing here?

 

[Il Drago]

re Liverpool - yeah, of course, a few people take credit for it, in the same way Conte and Suning get credit for Inter's recent successes, but still.

Proper execution relies on having a good team, a clear strategy, and the alignment in execution.



Liverpool's trajectory, for me, was inevitable. Dont get me wrong, it may have taken more years, it may have required different managers, etc, but the mentality and direction brought to the club by Fenway was always in this direction - and in Klopp, they intentionally (not accidentally) found the right guy to execute the sporting side of it, while they executed the commercial side of it. We can't be so flippant as to chalk it up to pure fluke.

I never said it was a fluke. They made the decision to hire Klopp so credit to them but the difference maker is Klopp. Owners, management and sporting director are still the same with pre Klopp period. The only addition was Klopp. But if you compare their transfer strategy between the two periods it's day and night with the way they have used the money. Suarez money went to guys like Lallana, Lovren, Markovic, Moreno and Balotelli. Sterling money went to players like Benteke, Clyne and Ings. Firmino was the only good signing of that period. On the other hand, Coutinho money went to van Dijk and Allison while their transfer success rate in general under Klopp is close to perfection. Only Keita and to a lesser extent Chamberlain have been bad transfers out of all their expensive signings.

Liverpool aren't the only EPL club who have executed the commercial side well. Arsenal and Man Utd have also done so. In fact, Liverpool have lowest net spent out of the 3. It's their footballing decisions that make the difference.

 

[.h.]

I never said it was a fluke. They made the decision to hire Klopp so credit to them but the difference maker is Klopp. Owners, management and sporting director are still the same with pre Klopp period. The only addition was Klopp. But if you compare their transfer strategy between the two periods it's day and night with the way they have used the money. Suarez money went to guys like Lallana, Lovren, Markovic, Moreno and Balotelli. Sterling money went to players like Benteke, Clyne and Ings. Firmino was the only good signing of that period. On the other hand, Coutinho money went to van Dijk and Allison while their transfer success rate in general under Klopp is close to perfection. Only Keita and to a lesser extent Chamberlain have been bad transfers out of all their expensive signings.

Liverpool aren't the only EPL club who have executed the commercial side well. Arsenal and Man Utd have also done so. In fact, Liverpool have lowest net spent out of the 3. It's their footballing decisions that make the difference.

Oh I wasnt accusing you of claiming it was a fluke, to be clear. I think you and I are on the same page on Liverpool. Well executed, from top to bottom s a club. I think other posters here are ascribing too much of their success on purely Klopp without looking at the broader infrastructure and board strategy (etc) that enables him to succeed

 

[.h.]

What are we even arguing here?

Dunno. I simply said that it'd be critical for our future as a club to be self-sustaining, like some other big clubs are, andd then I woke up to like 20 posts ;-)

 

[Il Drago]

What are we even arguing here?

The chances of a self-sustaining model also bringing successes on the pitch. Sadly cases like Bayern and Liverpool are the exception to the rule. You can't have both. And Italy is the worst place to execute such a model as they're behind everyone, even Bundesliga, in commercial side.

 

[CafeCordoba]

Yes, that is very much true. In EPL you kind of can be self-sustainable but it's rare to have success because money clubs like City and Chelsea are your competition. And like brehme said, Pool being self-sustainable is a dubious claim.

Real is not self-sustainable by any means.

 

[.h.]

pre-pandeic, liverpool was a highly profitable club. They lost some money in their most recent results, but that's understadnable given stadia closure etc.

I dont see how its controversial at all to suggest they're self sustaining.

Sure, not making the CL twice in a row would make them a financial mess, but there's never really been any risk of that recently. Their financial basis - as it should be - is modelled for a latter stage CL club. Which they are.

It's a pointless argument really, its like saying Man Utd without any commercial revenues would be a disaster. Well, yes, but they have them....

 

[brehme1989]

I've never once said a fan-owned club is unsustainable, wtf?

It's basically impossible for a major non-fan owned club right now to become fan-owned, because the fans need to raise the capital to buy the equity. At Inter, that means roughly 1 million fans paying 1000 euros each - which I dont think will ever happen. As we're run right now, too, that would be heavily reliant on continual cash injections every year to cover operataing costs.

Well, if you want to follow the models of:

Bayern, Real, etc.

then you're asking for a fan-owned structure. And you repeatedly said it's not likely. I understand your reasons and I cannot disagree with them, but this is what successful clubs that don't rely on cash injections look like. You keep talking about self-sustained clubs, but those don't get successful results.

And I'll repeat that both Real Madrid and Barcelona really had to exceed their limits to become superpowers. Barcelona especially fucked it up under Bartomeu as they sold out their identity for this.

Hell, even Atalanta are quite a successful self-sustianing club; albeit we want success a 'tier' above them, but they're on a great path.

Atalanta is not a successful club, it's one that exceeds expectations. Arguably because Inter, Juventus, Milan, Roma, Lazio, Fiorentina and Napoli are performing below expectations.
They're doing a remarkable job, as is Sassuolo I'd say, but is it really sustainable or is just a gap filler?


I'm not sure if it's impossible, but I agree that it will take something significant. Either some form of legislation (which exists in Germany, Spain, Greece, Serbia, Turkey, Portugal, maybe Sweden, maybe the Netherlands and a few other northern countries tiirc) or some economic desperation which forces the owner to simply abandon the club, like Chelsea did in the past.
But it's doable. The only concern is that Inter and Italy in general does not have this culturally ingrained and even in countries where there's this law, the people who share a similar mindset to Italians (Spaniards, Greeks and Turks for example) expect some wealthy father figure to come up and rally everyone and pump money in while everyone else just claps their hands and points fingers.

Our current owners cannot transition us to this phase. Someone else, a proper Inter fan, perhaps could. If there was a movement solid enough to perform the transition.


But yeah, it's fairytale talk. As is expecting Inter to be a top side without the owner injecting hundreds of millions... And in the last few years, we've mostly seen loans been drawn against the club (or owner's equity as collateral) rather than injections, which adds interest payments and in general makes the club all the least self sustainable. It's a pleasant surprise that we have maintained a high position but it comes at a time where almost no one else injects money in Italian football.

 

[.h.]

Well, if you want to follow the models of:

then you're asking for a fan-owned structure. And you repeatedly said it's not likely. I understand your reasons and I cannot disagree with them, but this is what successful clubs that don't rely on cash injections look like. You keep talking about self-sustained clubs, but those don't get successful results.

And I'll repeat that both Real Madrid and Barcelona really had to exceed their limits to become superpowers. Barcelona especially fucked it up under Bartomeu as they sold out their identity for this.


Atalanta is not a successful club, it's one that exceeds expectations. Arguably because Inter, Juventus, Milan, Roma, Lazio, Fiorentina and Napoli are performing below expectations.
They're doing a remarkable job, as is Sassuolo I'd say, but is it really sustainable or is just a gap filler?


I'm not sure if it's impossible, but I agree that it will take something significant. Either some form of legislation (which exists in Germany, Spain, Greece, Serbia, Turkey, Portugal, maybe Sweden, maybe the Netherlands and a few other northern countries tiirc) or some economic desperation which forces the owner to simply abandon the club, like Chelsea did in the past.
But it's doable. The only concern is that Inter and Italy in general does not have this culturally ingrained and even in countries where there's this law, the people who share a similar mindset to Italians (Spaniards, Greeks and Turks for example) expect some wealthy father figure to come up and rally everyone and pump money in while everyone else just claps their hands and points fingers.

Our current owners cannot transition us to this phase. Someone else, a proper Inter fan, perhaps could. If there was a movement solid enough to perform the transition.


But yeah, it's fairytale talk. As is expecting Inter to be a top side without the owner injecting hundreds of millions...

Your question was which clubs are self-sustaining. Those are two examples of those. I'd love to know (not sure off hand) how much money Bayern, etc, make on subscriptions, because I suspect (!) they'd be self-financing clubs even without the subscriptions from the fans? But I, as I said, really dont know.


I agree, I dont really consider Barca a self-sustaining club, and 'become like Real' isnt really a realistic option for Inter right now.

I also agree with you re Atalanta - but the question is what the future is for them. If they can keep it up, they can adjust their cost basis to mirror a CL club better, or they can assume that this is a good few years and they fall back to mediocrity. It's kind of up to them here. There's nothing that stops them from being in charge of their own destiny, as such. Except bad decisions/execution.



We're already the 14th highest revenue club in the world at the 300m mark - 364m before the pandemic.

Lets go with that 300m for 2020, add about 100m more to take us to about 160m matchday (e.g. new stadium), commercial goes to Arsenal level (+60m), and CL latter stage + prize money, etc, we can approximate maybe another 60m there


That'd be another 220m ontop of our 2020 revenue, which would put us at the >500m revenue mark, behind PSG but ahead of Chelsea.




Point is, again, in 2019-2020, if it wasnt for Nainggolan, Gabigol and Vecino (for example), we'd have been an operating profit club without too much impact on our club. We absolutely can be an operating-profitable club. It will take improvements across the board - sponsorship revenues, CL R16 regularly, winning the league, etc, but it'd be a huge success and a key milestone for us.

The stadia is the really critical thing.

 

[brehme1989]

I explained above, memberships are not just a source of income, they are an indication. A bigger trigger than season ticket holders and ticket buyers. It's the most important thing sponsors are looking at.

Our revenue includes player sales and earlier it included unsustainable favor-related sponsorships from Asia. Not really sustainable is it? You want us to have a football team or a player turnover machine that needs to sell 2-3 important players every year? Do self sustaining clubs do this? Liverpool has the same core players for an average of 4 years and they've only added new ones after their success cycle.
Bayern does not sell.
Real Madrid also does not sell.
Barcelona became a mess after a big sale because of too many bad decisions following the Neymar deal. (Which ironically enabled Liverpool to become the force it is now)
Chelsea and Manchester City who are reliant on their owners do not sell either. Neither does PSG.

So how exactly do you become self sustainable? By gambling on half a lineup every 3 years? I'm just curious to see where you think this autarky leads in terms of the actual football because you seem to think it is secondary or unimportant.

 

[.h.]

The revenue as reported by Deloitte money league (e.g. the numbers quoted above) do not include transfer fees. They look only at non-exceptional items, e.g. matchday, broadcast, and commercial.

The loss in 2018-2019 was with a (rough guess) roughly net 0 transfer window

 

[nadzington]

Real Madrid is in huge debt and has the backing of the Spanish state and the Madrid council as they help them get loans on favorable terms or help them write off bad debt. And Real Madrid is not a company, it's a non-profit organization with members.

Bayern Munchen relies on what @.h. calls unsustainable. That is, their fans are the owners, that is 75% of the club is fan-owned. Then you have Allianz, Audi and Adidas with most of the rest and a few other minor shareholders that do not pump money into the club. Their source of revenue is the classic stuff, television rights, tickets, UEFA and so on.
Ajax is similar, also around 75% fan-owned. The rest is floated in the stock market and they have 3 major shareholders (over 5%) iirc.
These three are clubs that depend a lot on their fans subscribing to these clubs, not only for membership fees but it also serves as an indication for sponsorships. (Benfica and Porto are similar.)


Liverpool did not really start as a self-sustained club under the Americans, that only came after they sold Coutinho and with Klopp's prudent transfers and on pitch success. Liverpool not making the Champions League twice in a row would make our financial mess under Thohir look like a playground compared to those guys. They are not genuinely self sustained as they still rely on pumping from the Americans. And they're not really big spenders either, but they're lucky to have revived the brand so they get a lot of sponsor deals for the time being. If a new owner takes over without paying a dime to get the shares, he'll need to pump money to maintain this standard.

Atletico Madrid is in a financial mess, has probably the biggest debt of them all and their owners need to pump 100-200m a year to keep them competitive.



Next?

I dont understand what your point is, you just described why the are selfsustianable.

 

[brehme1989]

I dont understand what your point is, you just described why the are selfsustianable.

Nope, apart from Bayern Munchen, the others are not self sustainable.

 

[.h.]

so how is Liverpool not self sustaining? Or Arsenal or United?

I'm not saying it isnt hard work to become self sustaining, there isnt a magic button when you buy a club that says 'give me loads of free sponsorship money'. Of course you have to build up to it over time

 

[Corrode]

Asian ownership in European football is questionable so far. No clear vision.