Chinese owner seeks buyer for Inter Milan
Bankers will begin the search this week for a buyer for Inter Milan, making it the latest top-tier football club to be put up for sale, according to people familiar with the matter.
US boutique bank Raine Group, which handled the record-breaking £2.5bn auction of Chelsea this year, and Goldman Sachs were working on the sale process, the people said.
Inter has been owned since 2016 by Nanjing-based electronics retailer Suning, which acquired the club during a wave of investment from China in European football.
A number of Chinese owners have since sold out or reduced their exposure, as gathering economic troubles at home and waning political backing for the project prompted a rethink.
Suning, one of China’s largest bricks-and-mortar retailers, has struggled as consumers made the switch to online shopping. The company’s large short-term debt pile also left it exposed to a tightening of credit conditions in the Chinese economy.
In February last year, Suning rushed to raise new financing to plug the funding gap at Inter caused by the coronavirus pandemic, resulting in a $275mn loan from distressed debt specialist Oaktree Capital.
Then in July, Suning itself was rescued by the local government and shareholder Alibaba in a $1.4bn bailout, adding to speculation about the long-term likelihood of keeping ownership of Inter. In January this year, Inter returned to the bond market.
Last month, Inter’s board signed off on the club’s latest set of accounts, which showed revenue increasing to €440mn and a loss of €140mn for the 2021-22 financial year.
The club said that the majority shareholder “had formally expressed his commitment to backing the group by ensuring asset support”.
Inter is led by president Steven Zhang, the son of Zhang Jindong, Suning’s founder, who paid €270mn for a majority stake in the “Nerazzurri” in 2016.
Suning is ready to inject capital of €100mn this year in tranches, according to a person close to the club. The person pointed to previous guidance that Suning is open to new partners and would consider the sale of a minority stake.
The banks and Inter Milan declined to comment.
Italian football has become a popular destination for international investors. Roma, Atalanta, Fiorentina and Genoa are among several clubs now controlled by American owners. This year, US investment group RedBird Capital bought Inter’s local rivals AC Milan in a deal worth €1.2bn, a record for a European football club outside the English Premier League.
But Italian football presents a number of challenges for investors compared with other European leagues.
Serie A has the second-lowest broadcast revenues of the so-called “Big Five” leagues, with Italian football’s international rights fetching about €230mn a year, according to Enders Analysis, far below Spain’s figure of €900mn.
Many Italian clubs are also sorely in need of stadium upgrades or replacements. Inter shares its home with AC Milan — the San Siro. Plans have been drawn up for a new 65,000-seat stadium, which is expected to cost about €1.3bn and is likely to take many years to complete. The shared stadium model has a drawback for potential investors as hosting double the number of games makes it far harder to generate revenue from other events.
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