How much is Inter worth?

Despite the apparent scarcity of top-end clubs, investors now have two reference points for deciding how much to bid on Inter. This is a club with plenty of pedigree - the first Italian side to win the treble of domestic league and cup plus Uefa Champions League, and a history of great players.

But at present, Inter is struggling financially. The club recently reported that it made a loss of €140mn in the 2021/22 financial year on revenues of €440mn.

The owners are also under pressure. Nanjing-based electronics retailer Suning, which has owned the club since 2016, also suffered during the pandemic as consumers switched to online shopping from its brick-and-mortar foundations. Meanwhile, Chinese owners have flooded out of European football since Beijing tightened capital controls.

So what is Inter worth? Andrea Sartori, founder of data and analytics platform Football Benchmark, this year estimated that Inter’s enterprise value, including debt, was about €996mn. In a takeover, he says the club could command somewhere in the region of the €1.2bn valuation commanded by AC Milan. For what it’s worth, Football Benchmark had put an EV of €578mn on AC before the sale, partly because its revenues are lower than Inter’s.

There are some caveats, however, notably that interest rates have moved upwards since US hedge fund Elliott Management sold AC Milan to RedBird this year.

Inter is an early test of investor appetite for football clubs in the post-zero interest rate environment. In the words of one debt banker, “the cost of capital is really high and you can buy liquid assets at a discount and make a far better return, so why stick your money in a football club”.

Football clubs are pretty illiquid compared with blue-chip stocks that can be sold immediately for cash. But investors are also betting that long-term broadcast deals and loyal fans will help them weather recession more effectively than large swaths of the economy.

And, Sartori points out, Inter and AC Milan could both benefit as the timeline for their new shared stadium becomes clearer.

There would be added upside from potential structural changes to the landscape of European football that could result in steadier income streams and lower costs for elite clubs that have long paid enormous salaries to players in search of trophies.

That’s why much hinges on the planned relaunch of the European Super League, a breakaway competition that wants to put financial sustainability at the centre of the sport. If that goes the way of big clubs, there could be hidden value to a team of Inter’s pedigree.