Reuters and other media confirmed that Investcorp's "exclusive negotiations" to acquire AC Milan are close to success, and the Nerazzurri army is getting closer and closer to changing owners.
These days, many people repeatedly leave messages asking me: Why can AC Milan sell for more than 1 billion euros, while inter Milan's rumored acquirers are mostly second-rate sellers and bottom pickers, lacking convincing high-quality buyers? What is the difference between the two Milans?
As early as last summer, Zhang Kangyang pointed out the problem in an interview with the Milan Sports Newspaper: "What we have to do now is to maintain the financial balance by reducing costs, otherwise we will never find new investors." ”
According to the information of financial experts, Calcio e finanza and other parties, the biggest difference between Inter Milan and AC Milan is that Inter's operating costs in a single season – or financial burden – are 140-150 million euros higher than those of Milan, which is a problem that the Nerazzurri is currently urgently trying to solve.
Last season Inter's revenue of 360 million euros and a deficit of 245 million euros were staggering.
This season, the regular income gap between the Milan duo is not large (box office + league broadcast fee + Champions League revenue), Inter has returned more funds through the ball market, and the total revenue of the season is expected to be around 400 million euros. Even so, Inter will still have a deficit of around 100-110 million euros this season – something that Inter Finance CEO Antonello has confirmed with red teeth.
AC Milan's revenue for the season is expected to be around €300 million, with an estimated season deficit of €50-60 million.
It can be seen that Inter's operating costs this season are more than 500 million euros, while AC Milan's operating costs this season are about 350 million euros, and the gap between the two teams has reached about 150 million euros.
Inter have more financial burden than Milan, where is the specifics? Mainly three large blocks.
The first is salary costs.
According to the Milan Sports Newspaper, Inter's total salary is 30% higher than Milan's, and if you count those non-staff salaries (such as Conte and Naingland's severance pay are paid in installments according to salary, etc.), it is higher.
Then there is the amortization cost.
The so-called amortization, including but not limited to those transfer fees that need to be paid in installments (for example, Ashraf, Lukaku, Barrera and others were bought by Inter from Real Madrid, Manchester United, Cagliari by installment methods, although some people have left the team, but the payment contract is there, inter must pay the annual installment payment).
Then there's the cost of interest.
Inter recently issued 415 million euros of bonds – a legacy of bonds issued during the Tohill period – and Inter rolled forward by borrowing new ones to pay off old ones. The interest rate is around 5%.
In addition, Inter's parent company , OCM Luxembourg , controlled by Suning , borrowed a usury from Oaktree last summer, which, according to relevant documents, totaled €292.125 million at an annual interest rate of 12 percent.
Although the borrower of this loan is not Inter, but the pledge is Inter's controlling stake, the Nerazzurri can not stay out of the matter.
If the Zhang family can't repay the profits, it will be like Li Yonghong lost AC Milan, losing the controlling stake of Inter. However, Oak Capital has said several times that it has no intention of operating Inter, and may sell it again after really winning Inter, if this situation really occurs, it is not easy to say whether Inter is a blessing or a curse. After all, if the oak tree is irresponsible, the trust is not human, and then another Tohill will be left with endless disasters.
Since last summer, the Zhang family has paid 21 million euros in interest. As for whether these interest payments are paid by the Zhang family out of their own pockets or from Inter, it remains to be verified.
Inter's high operating costs may be the reason why Inter is difficult to change hands - if the team does not try to change, in the future, even if the major shareholders spend more than 100 million euros to the team every year, they can only fill the loss hole, and there is no talk of expanding the armament war and stirring up the ball market. This is enough to scare off a lot of buyers. Even some people with good strength will stay away from Inter, who carry heavy burdens.
There is a buddy who always believes that "Oil Daddy" will come to Inter and transfer all kinds of unreliable information to me every day. But even the "white turban" is not willing to smash the nine-figure euro every year without even hearing a ring.
Inter are under a lot of pressure at the moment.
In this financial situation, it can only be forced to borrow high-interest loans to ensure the cash flow of the team, and at the same time seek transfer profits by selling high and buying low. However, borrowing will lead to high inter interest costs, exacerbating losses. Selling players is also not a small risk, once the improper replenishment, resulting in a decline in the strength of the team, losing the lifeline of Champions League qualification, it may be a "catastrophe".
Moreover, this is a way to treat the symptoms rather than the root causes.
The real cure is to make up your mind to reduce operating costs – especially salary costs and transfer fee amortization costs.
At the same time, Inter must strive to increase revenue - such as improving the ability to monetize the Internet, no matter how difficult it is, it must promote new stadium solutions, and strive for better results in the Champions League, Cup, Super Cup and other events to earn gold.
This season, Inter's highlights are the Champions League breaking into the knockout rounds, the Super Cup winning the super cup to increase revenue by tens of millions, the Italian Cup semi-finals to increase tens of millions, and the cup finals if they can win and increase revenue by 7-10 million. These are the right ways for Inter to get out of the predicament and win the turnaround.
In summary, Zhang Kangyang explained a year ago: If you do not reduce costs, it is difficult for Inter to find new investors.
On the contrary, if there is a achievement in reducing costs, then whether it is the Zhang family's ability to restore capital injection after the change of domestic and foreign situations in the future, or inter experiences a change of ownership after high-quality buyers surface, the Blue and Black Army is expected to truly usher in a turnaround.