Inter's Financial Situation

[.h.]

Do they? Are you sure?

I would guess Napoli wait a couple of years before giving them new contracts, or until there's only 1 year left on a contract? Because you end up spreading 1 year of book cost over, say, 3-4 years of contract

I would have assumed the legal accounting treatment for players is standardised - though in company books you are allowed to choose your method of amortisation

any evidence? keen to see it in a bit more detail


its probably also that it needs to be stnadard for all assets of the same class - so we cant treat one player differently to another. Remember we signed Barella long before we got rid of Icardi, so we might have been expecting him to be an outright sale

 

[CafeCordoba]

David Amoyal talks about that in his podcast (Calcioland) and I trust that guy. He has lot of guests there and he writes for Di Marzio site => lots of connections, also Napoli-related. That's how they do it, amortize more in first few years, so less book value left in the later years.

But yeah anyway, irrelevant in terms of how Barella deal was done, loan + obligation.

One source I've used before is this document from PWC:

https://www.pwc.com/gx/en/audit-ser...cal-transactions-in-the-football-industry.pdf

Here it is explained all kind of different scenarios how different type of deals are typically handled accounting-wise.

Barella's case would be basically considered as permanent transfer and the amortization would start regularly and it would be for the whole 37m€ sum. (in that PDF's example it is 100€ loan fee + 500€ obligation fee)

However there's this one text I'm not sure if it affects this case

Real London would capitalise the present value of the total payable (€100 + €500) and amortise it over the full player contract term.

If the components are not priced at market values, the total consideration would be assigned to each component (that is, in this case, to the consideration for purchase of the registration rights and to the employee benefit) on a relative stand-alone selling price basis.

 

[.h.]

really interesting document, thanks for sharing it. I might read it some time (unlikely tbh hahaha)


I'd be surprised if you can change how you choose to amortise players - I'd have thought it'd be standardised. Might be wrong, but a large part of IFRS regulation is to try to standardise a lot of these things (helped some companies build IFRS platforms, not the actual calculation though)

Like I said, if Napoli make a habit of signing people on a 3 year contract, and extending them to, say, 5 years after the first year, that would go a long way to achieving the same objective tbh.

RE Barella it might be purely cashflow. Was the obligation for him unconditional, or effectively unconditional (e.g. as long as we arent relegated this season)? Hard to say, I guess, but if it was a conditional one then its not accounted the same way.

May also just be that Cagliari wanted cash now for their own market. After all, cashflow is more important!

 

[rfU]

According to this our net financial position was just over -400M in 2018/19 season:

https://www.ft.com/content
/a1c7b456-4ab0-4a88-a993-bc80856cbc20?shareType=nongift

Can FIF accountants clarify what this means?

 

[brehme1989]

Net financial position just means how much cash you have compared to your debt. Doesn't mean that much on its own but it's usually better if it's not negative obviously.

Football is not a cash intensive business so it's not a huge factor.

 

[.h.]

dont have access, can you post the content?

 

[brehme1989]

dont have access, can you post the content?

It's an interesting article by the way. I'm on the phone app so no clue how to do anything.
It says that there is PE interest in acquiring a minority stake in the league to enhance its growth. Hopefully it pans out well, we need this. At least from a monetary perspective.

 

[Pimpin]

dont have access, can you post the content?

check pm

 

[.h.]

Cheers.

Interesting article.

I guess net cash they're looking at our books in terms of liabilities and so on - my guess would be that -400m is primarily those bonds we raised, in the first instance, and probably some debts to Suning as well.

Less impact from an FFP perspective as long as we service the debt properly.




Private Equity, I'm sure, could make a big difference to the league's deals - I've always felt like there isnt enough sharp focus on trying to drive those the best you can (probably lots of back hand deals, etc) - at the same time, the time will come where they want their reward. Either that'll be selling the asset because they've made it more profitable, or starting to take divideneds. That's gonna hurt at some point in the longer term, though of course, its better to get 90% of 500 million euros a year, than 100% of 100 million euros a year.

 

[Il Drago]

 

[JJM]

It is the second time that zhang's Inter has made such an operation, the first time was two years ago with bonds worth 350 mil eur million to be returned after 5 years. Are they positive operations? Debt must not be understood as a negative operation, but as the markets intend bonds, since the first time all the bonds listed above were pulverized in less than 5 days, it means that Inter is considered a solid company that is able to invest and repay debt.
To be clear, elliot had tried to do the same thing with Milan and no one had done it

 

[.h.]

i think what is good is the interest rate, all things considered.

Though in general I do get a little worried about just snowballing debt.

 

[CafeCordoba]

This thing talks a bit amount the same stuff but also tells some figures of our revenues decreasing and costs increasing.

https://images2-gazzanet.gazzettaob...onio-prestito-di-100-mln.jpg?v=20200724123200

 

[.h.]

Tldr we urgently need to sort out some of the amortisation and get plusvalenza and increase sponsorship.

 

[DARi0]

Inter revenue falls, costs rise

Inter announced their revenue dropped €30m and costs rose by €70m, so new bonds have been emitted for €75m.

A statement released by the Nerazzurri outlined the financial status of the club in the nine months leading up to March 31, 2020.

“Inter’s total revenue decreased by €30.5 million or 11.3% to €240.5 million from €271 million for the nine months ended March 31 2019,” read the press release.

“The decrease in total revenue was mainly due to a €35.9 million decrease in commercial revenue and a €6.1 million decrease in media revenue, partially offset by a €9.0 million increase in matchday revenue.

“The decrease in commercial revenue is mainly a result of the termination of sponsorship agreements with Fullshare Holding Limited, King Dawn Investment Limited and of the expiration of the contract with the marketing agency Beijing Yixinshijie as at June 30, 2019.

“Moreover, following the suspension of the 2019/2020 season at the beginning of March 2020 due to the COVID-19 pandemic, there has been a deferral in the recognition of Sponsorship Revenue for approximately €6 million relating to March 2020.

“Inter’s total operating costs for the nine months ended March 31, 2020 increased by €73.0 million to €335.7 million from €262.6 million for the nine months ended March 31, 2019 mainly due to a €26.6 million increase in personnel costs for playing staff resulting from an increase in player wages, due to the purchase of high-profile players.

“Inter uses its cash on hand to pay operating expenses, staff costs, interest payments and other liabilities as they become due and Inter’s sources of liquidity have historically been the shareholder loans and other distributions by its subsidiary Inter Media, including through upstream loans and dividends.

“As of March 31, 2020, Inter group’s consolidated net financial position decreased by €69.8 million or 15.1% to €391.6 million from €461.4 million of March 31, 2019. The decrease was primarily due to the conversion into equity of shareholder loans for an amount equal to €100 million and a decrease of €4.7 million in the principal outstanding amount of the senior secured notes issued on December 21, 2017 (through a mandatory amortization payment). As of March 31, 2020, €138.9 million was outstanding in respect of the shareholder loans.

“Notwithstanding Suning’s renewed commitment to support the Group by waiving the repayment of a portion of the shareholder loan then outstanding for an amount of €10 million so that the corresponding amount could be allocated to capital reserve on or about June 22, 2020, Inter’s equity position at an unconsolidated level may become negative starting from the new fiscal year commencing July 1, 2020 as a result of losses accumulated during the fiscal year ended June 30, 2020.

“Such negative equity position may persist as a result of the applicability of an emergency decree recently enacted which allows companies to temporary waive their minimum capital requirements until December 31, 2020.”

 

[Delicate]

A transfer market worth over 180 million euros. This is the figure invested on the market by Inter during the 2019/20 season as regards outright purchases, according to what emerges from some official documents of the Nerazzurri club that Calcio e Finanza has been able to view, in which the data are disclosed in the first nine months of the 2019/20 financial year.

From Lukaku to Eriksen, also passing through several young people for the spring team, Inter indicates that they spent 184 million euros on cards for the players during the summer 2019 and winter 2020 sessions.

Official figures of the main deals:

Romelu Lukaku, Manchester United: 74.162 million;
Nicolò Barella, Cagliari: 40.500 million;
Christian Eriksen, Tottenham: 27.567 million;
Ionut Radu, Genoa: 10.624 million;
Lucien Agoumé, Sochaux: 4.512 million;
Martin Adriano Costa Satriano, Club Nacional: 2,400 million;
Ashley Young, Manchester United: 1,729 million.
To these 161.5 million euros, an additional 23 million are added for other purchases related to young people for the spring team.


Among the figures, there are also those relating to some purchases onerous loan:

Stefano Sensi, Sassuolo: 2.254 million (at March 31, 2020);
Victor Moses, Chelsea: 216 thousand euros (as of March 31, 2020).
Romelu Lukaku is thus confirmed as the most expensive player in Nerazzurri history: exceeding 46 million Vieri at Lazio (1999) and 43 million Joao Mario at Sporting Lisbon (2016). In the top 10 there are also Geoffrey Kondogbia (40.9 million in Monaco in 2015), Radja Nainggolan (evaluation of 38 million in summer 2018 in the deal with Roma), Hernan Crespo (36 million in Lazio in 2002), Milan Skriniar (33.5 million overall at Sampdoria), Gabigol (33 million at Santos in 2016), Alessandro Bastoni (31 million overall at Atalanta) and Ronaldo, purchased by Barcelona for 28 million in 1997.

Compared to market rumors, therefore the figure not only higher than the Lukaku deal but also that relating to the purchase in January of Christian Eriksen, thus paid 27.5 million by the Nerazzurri club.

 

[Harpsabu]

If we paid 30m to get a player 6 months early the manager didn't plan on using immediately we are fucking retarded

 

[n4l]

Oh oh. People gon b triggered when they see the lukaku number. We only trust transfermarkt :trolldad:

 

[.h.]

just signed a 5m/year shirt sleeve sponsor, nice one.

 

[Black Knight]

just signed a 5m/year shirt sleeve sponsor, nice one.

You sound like the giffgaff voicemail