Inter's Financial Situation

[ADRossi]

At this point, do we hope that Zhang defaults on the repayments and we end up as an Oaktree property?

I imagine they’d want to move us on pretty quick, but I don’t know what kind of ownership we’d end up with through that scenario.

Yes. This is the Milan unicorn scenario and 100% the best thing that could happen to us. OakTree would take us over with a basically nonexistent cost basis. They'd easily be able to sell us and make a profit, and might even eliminate some of our debts in the process.

 

[CafeCordoba]

Refinancing and refinancing all over again only makes the situation worse for Inter. We refinanced our bond this January and due date of that is in 2026 or 2027? So there's no hurry with that, except we of course pay those sizeable interest payments all the time. But we're still making losses each year and AFAIK losses are partly covered with that Oaktree loan Zhang took 2021 after the Scudetto. That 275m loan is used bit by bit and it will be used fully at some point. Then we need more money to stay afloat and that's the point we are truly fucked. Since the deal Zhang can get will probably be a lot worse. Unless we start selling more of our big players.

It's definitely interesting 2024 (due date of that Oaktree loan) is only 1,5 years from now. Not too far and I don't know how Zhangs are planned to pay that.

 

[Helenio Herrera]

I'm just speculating, but ultimately, the best thing they can do is keep refinancing the club and forcing us to generate cash to pay them - e.g. if the payment on term is partially refinanced, but partially cash... trapping someone in a debt cycle is a great way to generate cash, ultimately. As long as the collateral is worth more than the debt, you're golden.

Isn't the collateral the club itself? How is it (with all its debt) worth more than the €330m they will be missing out on?

They'll probably follow Elliott's example (Milan). Sure they had some running costs and put some money in, but they're now selling the club for a reported €1.2B.

There are also reports of Milan's sale being complicated because of the ownership structure. If Zhang follows similar tactics, I can see Oaktree not willing to get tangled up in court cases. So then it might make sense to not seize control of the club. I guess time will tell but I expect the Italian courts to side with Elliott instead of Li Yonghong.

 

[.h.]

Isn't the collateral the club itself? How is it (with all its debt) worth more than the €330m they will be missing out on?

They'll probably follow Elliott's example (Milan). Sure they had some running costs and put some money in, but they're now selling the club for a reported €1.2B.

There are also reports of Milan's sale being complicated because of the ownership structure. If Zhang follows similar tactics, I can see Oaktree not willing to get tangled up in court cases. So then it might make sense to not seize control of the club. I guess time will tell but I expect the Italian courts to side with Elliott instead of Li Yonghong.

Yes, the collateral is the club itself, but thats kinda my point. As long as the club has net equity, then they're probably happy - the loan can default and they can take it over. But its actually far simplier, and less hassle, for them to just milk the club for money. No different to payday loans. 250m of financing turns into hundreds in interest alone

 

[Helenio Herrera]

Yes, the collateral is the club itself, but thats kinda my point. As long as the club has net equity, then they're probably happy - the loan can default and they can take it over. But its actually far simplier, and less hassle, for them to just milk the club for money. No different to payday loans. 250m of financing turns into hundreds in interest alone

I don't think that's how they'd think about it, since there would be a good chance that Suning keeps on deferring the eventual payday. If I'm not mistaken, Suning does not pay anything until the due date (2024) on the Oaktree loan, and the point of lending PIK loans is being able to seize something valuable at the end of the day. Sure, the other creditors would keep on milking the club, but why would Oaktree want that? It's quite clear from the case of Milan that they can easily turn profit after few years of properly managing the club.

 

[DARi0]

FFP: "For the 22/23 and 23/24 seasons, Inter will be able to add new players to the European roster only if the balance between the costs of outgoing players (amortization and salary) and those of incoming players is +"

 

[Adriano@10]

FFP: "For the 22/23 and 23/24 seasons, Inter will be able to add new players to the European roster only if the balance between the costs of outgoing players (amortization and salary) and those of incoming players is +"

Thats not that tragic basically all that says is we re not allowed to incur higher expenses for our players than we currently have... For ex if correa leaves we d be allowed to replace him with a player that costs around 13 mio per season...

 

[.h.]

Well fortunately that's not too bad we have a lot of high amortisation crap atm...!!

 

[Ethor]

Speaking of financial situations, hope you all can pay for the Christmas and New Year celebrations! Perhaps some of you can give Stevie some tips. Merry Christmas and Happy New Year or what ever holidays you and yours are enjoying!

 

[Nerazzurri_Ninja]

sell the team already

 

[cloudq]

How bad do we want it?

 

[brehme1989]

How bad do we want it?

To stop ruining the sport?

 

[Capo]

To stop ruining the sport?

Already ruined.

The days of Sampdoria, Lazio making the final let alone Porto, Ajax or Red Star winning the champions league is gone. Unless your squad is worth 1B

 

[Adriano@10]

View attachment 7811

How bad do we want it?

None of these clubs have remotly the history or succes we had in the past so this before after comp means very little

 

[Nerazzurri_Ninja]

we need new owners and investors

 

[Bluenine]

So according to Deloitte, Inter's wage bill is €252m (82% of revenues). But according to capology, the GROSS wages of our squad are just €127m. Thats half of what deloitte says. Any idea which one is it?

 

[.h.]

Capology might be looking at total gross wages of the squad, but I'd guess Deloitte's figure includes amortisation

 

[Bluenine]

Capology might be looking at total gross wages of the squad, but I'd guess Deloitte's figure includes amortisation

That would be odd, why include amortisation in a wage to revenue ratio? That wouldn't make sense. Also, from their numbers of other clubs like City (57% wage to revenue ratio) & Arsenal (58%), it seems like they aren't including amortisation.

The only thing I can think of is that Deloitte is including wages of the entire club as an organisation, but the difference cannot be that large. The main squad's gross wage has to be a vast majority of our total wage bill.

I just checked swiss rambles numbers which seem to match Deloitte, see below:

So on top of the 101m player amortisation, we have:
- Wage bill of €248m, so around €120m "black hole" above the capology gross wages of the squad

- Plus another 101m "Other expenses"

Whats with these black holes in our costs everytime!!

 

[brehme1989]

Zhang Jr probably needs some pocket money whilst in Europe

 

[.h.]

I think the point of the wages including amortisation is that it is the total cost of ownership of the squad - wages vs amortisation is actually kinda irrelevant in some ways (as you see with, for example, bosman signings). The total cost of ownership of a player is what matters