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.

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The Political Economy of Football V2

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