Inter make financial progress

Inter’s pre-tax loss has significantly fallen from €137m to €77m, thanks to what the club described as “financial rebalancing”. This referred to a combination of increasing revenue, which rose €71m (22%) from €325m to €396m, and reducing costs, which were cut by €54m (10%).

The improvement was further boosted by net interest payable dropping by €11m (23%) from €48m to €37m, though it’s worth noting that this is still a huge annual interest burden, which has effectively doubled Inter’s loss from €40m to €77m.

So the club took many steps in the right direction, which were more than enough to offset the substantial €77m decrease in profit on player sales from €105m to €28m.

Success on the pitch contributed to revenue growth in both match day, which more than doubled from €40m to a new Italian record of €82m, and broadcasting, up €41m (26%) from €156m to €197m. Player loans and other income from player management nearly tripled from €4m to €11m. However, commercial fell €19m (15%) from €126m to €107m, mainly due to non-payment of the shirt sponsorship.

Despite the big improvement, the harsh reality is that Inter still posted a substantial €85m net loss in 2022/23. To place that into perspective, it has only been “beaten” by Juventus’ €124m to date (though prolific loss-makers Roma are yet to publish their accounts for last season).

That said, Inter have come a long way since their massive €246m loss in 2020/21, which gave them the unwanted honour of Italy’s record loss, just ahead of Juventus €239m and Roma €219m (both in 2021/22).

To further place Inter’s poor financial performance into context, their pre-tax losses over the three seasons up to 2021/22 were among the highest in Europe with their €473m only surpassed by Barcelona €840m (excluding their famous economic levers), PSG €725m and Juventus €544m.

Inter have lost an amazing €781m in the last 10 years (pre-tax), including €617m in the seven years under Suning’s control.

Following the reduction last year, this season player trading will bounce back with profit estimated as around €70m, including André Onana’s big money move to Manchester United (€50m fee), Marcelo Brozovic to Al-Nassr (€18m) and Robin Gosens to Union Berlin (€13m).

Inter’s Europe TV money was €37m more than the prior season’s €63m when they only reached the last 16. Each stage reached in 2022/23 earned them another large slice of cash: quarter-final €10.6m, semi-final €12.5m and final €15.5m. Interestingly, winning the trophy would only have been worth an additional €4.5m. Europe TV money has been extremely important for Inter, earning them an impressive €325m in the last five years. This is the second highest among Italian clubs, but it is a fair bit lower than Juventus’ €404m. On the other hand, it is around €100m more than Napoli €228m and is twice as much as Milan €162m.

Inter‘s gross debt increased from €489m to a club record €538m, compromising €409m bonds and €129m shareholder loans (including accrued interest). The hefty debt means that Inter ‘s annual net interest payable is now a chunky €37m, mainly €29m on the bond and €6m on shareholder loans, though this has fallen from the prior year’s €48m, primarily due to lower costs associated with transfers factoring.

Inter’s owners Suning are in a difficult situation, as they need to repay a loan of around €350m to American asset management firm Oaktree Capital by May next year. If they don’t make the payment, then they could lose ownership of the club to Oaktree, which would ironically be pretty much what happened when Elliott took over Milan in 2017.

We should applaud the improvement in Inter’s finances, including growing operating revenue to record levels, while also cutting the wage bill. At the same time, we have to acknowledge that they still posted a large loss and have built up significant debt, even after reaching the Champions League final.

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...

Millwall punch above their weight

Millwall’s season was overshadowed by the tragic death of owner John Berylson following a car accident. The American had been an exemplary owner, beloved by the fans for his leadership, passion and generosity. Millwall’s finances had been pretty good during his tenure, which we shall explore by looking at the most recent accounts from the 2022/23 season, when the club narrowly missed out on a place in the play-offs after finishing 8th. Millwall’s pre-tax loss slightly reduced from £12.6m to £12.2m, as revenue rose £0.8m (4%) from £18.6m to a club record £19.4m and player sales improved from a £0.1m loss to £2.5m profit. However, other operating income dropped from by £1.1m from £1.3m to £0.2m, while operating expenses increased £1.7m (5%) from £31.6m to £33.3m. The main driver of the revenue increase was broadcasting, which rose £1.1m (12%) from £9.1m to £10.2m, though match day was also up £0.4m (7%) from £5.8m to £6.2m. In contrast, commercial fell £0.7m (19%) from £3.7m to £3....

The Political Economy of Football V2

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