Financial scandal

[Ehsan]

According to the latest Forbes valuation, our debt is €215 (77% of our value). Roma, Milan, and Juve are almost debt free.

Milan, despite their horrendous season, made twice as much profit as we did. They've managed to increase their value by 24%. We managed to decrease ours -8%.

Out of the iconic four Italian teams, we're behind in all aspects; Revenue, Income, and Value. Even Roma are ahead of us.

We have been run as a "family-business" for a long time. Moratti always pumped personal money as he see fit, and most of the club's financial are guesstimates, as nobody really knows the details except the shareholders.

Suffice to say, this has got to stop. If we can't make more money in our most successful years, then something is terribly wrong. I think it's an embarrassment that a club who won consecutive scuddetti is losing money.

There are many reasons for this:

1- Bad marketing in general
2- Weak merchandising
3- Lack of auxiliary income channels
4- Inability to harness the international market
5- Bad transfer and contractual policies
6- Bad 3rd party contractual agreements (sponsors, advertising, etc.)

But all of the above, and more, can be attributed to one reason: Bad Management

Now, when you run a family business, you don't care about things like that. You contribute money as long as you want. If you lost money, it was yours to begin with.

So let me clarify when I say "Bad Management", that doesn't necessarily mean it's wrong. It depends on your objectives and vision for the future. So far, so good - Moratti has been good to us and remains dedicated, albeit spending less and less by the day.

But how long is Moratti going to take care of this hobby? Hell, how long is he gonna live for God's sake? Is his son going to inherit his passion and dedication?

FC Internazionale Milano is a club without a commercially promising future.

Yes, building a new stadium is one solution, but as everyone already said, it's not a magic bullet. What's more important is a full strategy and paradigm shift for the future.

We need to become a professional club, managed like a proper business. No longer can this family-friendly-laid-back thing go on.

We can't have a crappy website which doesn't even have English translations. We can't remain under the mercy of Sky for the majority of our revenue. We can't keep getting only 7 mil from Pirelli while we plaster their logo all over the world. Fans internationally need a way of contributing to a fan club or easily buying merchendise. The president has to stop falling in love with players like Ronaldo and giving out contracts like candy.

I've seen the club in person. I've been to their offices and I've met some of the people in charge. It's an embarrassment that - for example - the head of all our PR and communications is a hobo-like idiot who wears torn jeans and doesn't speak proper English. Our offices in Via Durini look more like the backoffices of a toilet manufacturer who stole some trophies. And let's not even talk about the disjoint pieces that are intercampus or the academy or the store or InterClub.

Perhaps Paolillo's financial background was supposed to help with all this. It didn't. The hiring of Mourinho is a bit better - and many people don't realize this - but he contributes positively to some of the problems I listed above.

But true and positive change has not been achieved, and it can only come from the top. Moratti must change his ways, and he must do so very soon, while we are still on a winning street and being discussed positively more than negatively in the media.

The solutions are surprisingly easy. The models we need to follow have been implemented successfully in the EPL and now in Spain - they just need to be tweaked a bit for the Italian mindset, but the core of what we need is the same.

As you can see I'm very passionate about this, and I've only briefly outlined the problem as personally see it, and I have not even discussed the possible solutions. But to me, this is the biggest concern.

I currently find it hard to care about a bad transfer here or a lost match there, while this big cloud overshadows the club I have dedicated my love for. I've been an Inter fan for years, and will god willingly remain an Inter fan for dozens of years to come until I die I wish for us to make strides in the areas above so that we have more future success not only on the pitch, but off the pitch as well.

Let's see what happens.

 

[Forza Nerazurri]

ummmmmmmmmm.....our debt isn't €279.....cuz dat wud mean dat arsenal has more debt than they are worth.........u readin that wrong

 

[vitomins]

Our total value is €279 million, the debt is 77% of that which is approx. €215 million...

 

[Ehsan]

I'm not sure about the debt value, but that's the only way I understood the ratio. I cross referenced the English clubs with last year's debt values seemed correct. I can't see why Arsenal can't be in debt more than they're worth. They still owe £240 on the stadium, and I think £150 to renovate the old stadium into a real estate project. That's not counting other debts. They can get lending based on their income.

If anyone can get actual debt figures for 08/09 that would be great. But it doesn't change any of the points I was making above.

Edit: I read that twice and still saw 215 Fixed, thanks vito.

 

[Stefan]

According to the latest Forbes valuation, our debt is €215 (77% of our value). Roma, Milan, and Juve are almost debt free.

Milan, despite their horrendous season, made twice as much profit as we did. They've managed to increase their value by 24%. We managed to decrease ours -8%.

Out of the iconic four Italian teams, we're behind in all aspects; Revenue, Income, and Value. Even Roma are ahead of us.

We have been run as a "family-business" for a long time. Moratti always pumped personal money as he see fit, and most of the club's financial are guesstimates, as nobody really knows the details except the shareholders.

Suffice to say, this has got to stop. If we can't make more money in our most successful years, then something is terribly wrong. I think it's an embarrassment that a club who won consecutive scuddetti is losing money.

There are many reasons for this:

1- Bad marketing in general
2- Weak merchandising
3- Lack of auxiliary income channels
4- Inability to harness the international market
5- Bad transfer and contractual policies
6- Bad 3rd party contractual agreements (sponsors, advertising, etc.)

But all of the above, and more, can be attributed to one reason: Bad Management

Now, when you run a family business, you don't care about things like that. You contribute money as long as you want. If you lost money, it was yours to begin with.

So let me clarify when I say "Bad Management", that doesn't necessarily mean it's wrong. It depends on your objectives and vision for the future. So far, so good - Moratti has been good to us and remains dedicated, albeit spending less and less by the day.

But how long is Moratti going to take care of this hobby? Hell, how long is he gonna live for God's sake? Is his son going to inherit his passion and dedication?

FC Internazionale Milano is a club without a commercially promising future.

Yes, building a new stadium is one solution, but as everyone already said, it's not a magic bullet. What's more important is a full strategy and paradigm shift for the future.

We need to become a professional club, managed like a proper business. No longer can this family-friendly-laid-back thing go on.

We can't have a crappy website which doesn't even have English translations. We can't remain under the mercy of Sky for the majority of our revenue. We can't keep getting only 7 mil from Pirelli while we plaster their logo all over the world. Fans internationally need a way of contributing to a fan club or easily buying merchendise. The president has to stop falling in love with players like Ronaldo and giving out contracts like candy.

I've seen the club in person. I've been to their offices and I've met some of the people in charge. It's an embarrassment that - for example - the head of all our PR and communications is a hobo-like idiot who wears torn jeans and doesn't speak proper English. Our offices in Via Durini look more like the backoffices of a toilet manufacturer who stole some trophies. And let's not even talk about the disjoint pieces that are intercampus or the academy or the store or InterClub.

Perhaps Paolillo's financial background was supposed to help with all this. It didn't. The hiring of Mourinho is a bit better - and many people don't realize this - but he contributes positively to some of the problems I listed above.

But true and positive change has not been achieved, and it can only come from the top. Moratti must change his ways, and he must do so very soon, while we are still on a winning street and being discussed positively more than negatively in the media.

The solutions are surprisingly easy. The models we need to follow have been implemented successfully in the EPL and now in Spain - they just need to be tweaked a bit for the Italian mindset, but the core of what we need is the same.

As you can see I'm very passionate about this, and I've only briefly outlined the problem as personally see it, and I have not even discussed the possible solutions. But to me, this is the biggest concern.

I currently find it hard to care about a bad transfer here or a lost match there, while this big cloud overshadows the club I have dedicated my love for. I've been an Inter fan for years, and will god willingly remain an Inter fan for dozens of years to come until I die I wish for us to make strides in the areas above so that we have more future success not only on the pitch, but off the pitch as well.

Let's see what happens.

Great post I agree with most of it.

The stadium is not a magic bullet but its easier for the management to build a new stadium then to shift paradigm from family oriented to business orientated.

The stadium is the first stadium to get them to implement the other steps is a lot harder.

One thing I do disagree with you about is the interstore, its pretty good imho. I have bought from them about 5 times and each time they have been professional and fast. I have received my requested items within 3 days.

 

[CafeCordoba]

Fantastic post Ehsan. I've wanted to say that shit also but didn't have exactly all that knowledge to do so (or willigness to find it out the details). Still I have realized the situation. And it seems they do have a plan, talking about that three-year project and so on. I don't know can they wipe the debts in that time but hopefully they do (Moratti talked about this, not just random rumors).

The one big issue I'd like to point out from your list is really the salary budget which I stressed in my post. It takes most of our income and we are making losses every year because of that. There are other expenditures too but cutting the salary budget is the most logical and easiest way to reduce losses. Now when we got rid of some big contracts, we shouldn't replace them with decos and maicon payraises and so on. The situation remains the same because we can't make money just like that, it's years from now even if they start doing right things now. Reducing the salary budget would ease our budget and we could operate easier.

 

[Nyall]

What I don't understand is how the hell can teams like Juve, Milan, and Roma be more financially sound than us despite being our bitches in Serie A? And on par with us in the UCL. And how we were actually better off financially before we started winning?

Can someone explain to me what they are doing right and what we are doing oh so wrongly.

 

[Ehsan]

One thing I do disagree with you about is the interstore, its pretty good imho. I have bought from them about 5 times and each time they have been professional and fast. I have received my requested items within 3 days.

You're right about that. But the online store is outsourced to EPi merchendising who are professional and handle the other big clubs. My other gripes are shipping costs, the products seem to be designed randomly based on contracts with different suppliers, and we don't have a strong physical presence (Like Milan in Duomo).

 

[CafeCordoba]

What I don't understand is how the hell can teams like Juve, Milan, and Roma be more financially sound than us despite being our bitches in Serie A? And on par with us in the UCL. And how we were actually better off financially before we started winning?

Can someone explain to me what they are doing right and what we are doing oh so wrongly.

We weren't better off financially before Scudetti, we were as poor back then, maybe poorer. What Ehsan tried to say that it's embarrassing we are behind those three despite us being the champions in a consecutive years.

Read that Ehsan's post, he just explained what is wrong. He didn't give solutions like he said himself. I think we are doing rightly in that how Moratti and Tronchetti Provera ain't pumping their money to the club any more like in the crazy years. And we try to cope with ourselves. But so much more has to be done.

 

[VLE]

They are pumping as much money if not more these years.
We spent 200m just to clear debt two or three years ago, and I'm guessing Moratti will spend his money again to clear the debt. It is no different with other clubs, Sensi saved Roma's ass two yrs ago, and Berlu cleared Milan debt when he bought Milan. Juve are the only one doing actual business, but even they get funded from Agnelli.

Eshan, while I agree as much as you our marketing sucks, I won't worry much about Pirelli as our sponser. Private sports clubs were used for money laundry forever, and 4~5 business funding Inter would mean we are doing something for them and getting back in return behind covers.

 

[Luka]

I don't get couple things though.

Weren't all our finances not public, due to the fact that we aren't a public company or somethin ? So how they know what our debt is etc. ?

2. Didn't Moratti say or someone else, that we need couple of years to become a company that is not making any loses ? If the situation is so bad, what will happen so dramaticly in next 2, 3 years that will change that?

3. Isn't the reason that Roma, Juve, Milan aren't doing that bad financialy is that they have half a team we have? I mean, we can probably be a profitable company, even tommorow. Just ditch all the players who made over 2 mln Euros wages per year, and lets become Roma, a selling club

If we can become what are those other clubs, but with the players we have now it would be too good to be true. If Juve or Milan would like to get stars tommorow, they would be in the same position than we are, or maybe even worse.

 

[CafeCordoba]

The thing is, with this rate, we are just losing more and more money. And Moratti (Branca also) has really stressed about this recently (last year, this year). We are only winning Scudetto and that is getting us nowhere. Rivals are coming back and at some point we will lose the Scudetto. Okay, that will happen no matter what we do. But the point is we have to try to increase the income and reduce the total expenditure drastically. That way Inter can become healthier and we can build a better team for CL, where the big money lies (revenue in later stages, better sponsorship deals).

 

[vitomins]

3. Isn't the reason that Roma, Juve, Milan aren't doing that bad financialy is that they have half a team we have? I mean, we can probably be a profitable company, even tommorow. Just ditch all the players who made over 2 mln Euros wages per year, and lets become Roma, a selling club

haha even though it seems like we have a bunch of those guys, we don't have 100 of them to cover our debt.

 

[Boys San Interista]

Great Post Ehsan, Nice and clear formulated!
I agree on all points.

I also think it's time to cash in on Zlatan next year, because this guy is hurting our paycheck. It's not his fault but those of their agents, who pressure them for better deals.

We also can not handle Roma's managment, because that means we never could buy roma's players if we do so. The reason they come here is because we offer higher salary, not because we are a greater club in their perspective at that moment. No, their first thought is because of the salary, and because you can offer better salary, you can purchase the better players too and then also achieve easier the trophies.

We are making progress, but what if we stop winning the scudetto, how will we force our way back up? Im not trying to place a joke here, but if i was Moratti, i was looking for someone who has the capabilities of Moggi. Not the Bribery part, but the hardness and strictness part.

12million salary for a player, who hasn't won a single award on european ground.(knockout flop)
The managment should be shamed!

 

[CafeCordoba]

So we cashed in on Zlatan. Interesting to see how much we will actually spend from that ~49m€ eventual transfer fee.

Inter are still on a position, where they have way too much dead meat in the squad taking big toll in salary budget. And it's not looking good so far. Probably if we ship players elsewhere, we still have to pay part of their salaries.

According to La Repubblica Inter have 40k season ticket subscribers. Does anyone know if that is much more than in previous years at this point of the summer? If Inter can make some reasonably good transfer at this last part of the mercato, that figure can rise pretty well before the start of the season.

 

[Ilkinio]

According to La Repubblica Inter have 40k season ticket subscribers. Does anyone know if that is much more than in previous years at this point of the summer? If Inter can make some reasonably good transfer at this last part of the mercato, that figure can rise pretty well before the start of the season.

I can be mistaken, but at that point last year we had 32-33. Let's not forget that season will start earlier. So, i don't think we will go past 45k(prooflink?) which was number last season.

 

[lonewolf19]

Good point on the season starting earlier, it could have an effect on # of sales

 

[CafeCordoba]

I can be mistaken, but at that point last year we had 32-33. Let's not forget that season will start earlier. So, i don't think we will go past 45k(prooflink?) which was number last season.

Ah, true. It's three weeks time to get that 5k (if that 45k is true). Dunno at all can we get it at that time. Hopefully Sneijder signing will boost it a little as I don't think Cassano will come anymore.