It’ll probably take a few months to learn what really happened between Steven Zhang and Oaktree, as the narrative and reports about his chances of paying off the debt and retaining Inter were positive and optimistic for several months up until everything unraveled right before the deadline, which had been known for three years. Perhaps he underestimated the fund, banking on the belief it didn’t really want to control the team. Or maybe some clauses made the process really challenging. The fact that he hasn’t been in Italy in ages should have been considered more of a warning sign.
Zhang’s Run
It’s possibly the most anticlimactic and less enthusiastic ownership change in recent years and a very unceremonious exit for a president that etched his name in the club’s history books thanks to two titles, including the momentous twentieth one, a few secondary trophies, and an unexpectedly deep Champions League run last summer. Some would argue the club’s success occurred in spite of what was going on at the top and that the management, the coach, and the players were a lot more instrumental than the patron. There’s some truth to that, but the outfit’s economic struggle probably had very little to do with Zhang himself and more with the conglomerate Suning in general, the Chinese government, which at some point decided that investing in football was no longer of interest, and the international landscape in general. In the end, he seemed to be somebody who fought as hard as he could to do right by the Nerazzurri despite the obstacles. He missed out on a larger cheque by refusing to give up the club in previous years when Saudi investors were eyeing it.
The future and the other US owners
Inter will have more financial stability under Oaktree. Fans and pundits will no longer have to worry about whether and where Zhang will find the money and his legal troubles. On the other hand, that doesn’t necessarily mean they are headed for a lavish era. The former president may have had many flaws, but he was surely passionate. A fund naturally comes off as cold, if not even cold-blooded, and will have to show its hand soon enough. It’ll be in for a rude welcome if the club is just another investment.
It’s the seventh American ownership in Serie A. The results have been mixed to say the least so far. They have a different mentality compared to Italian patrons, who have no problem pouring money into clubs to make up for the losses that pile up each year until somebody in their family or inner circle convinces them to get out of, or worse. Instead, foreign governors, especially those from the finance world, pay more attention to the bottom line. It’s a healthier and more sustainable mindset, but that’s not what the supporters and commentators have come to expect. Results and signings matter more. US franchises are money-making machines, especially in other sports, while that’s not even remotely the case in the Peninsula. Not closing a balance session severely in the red is considered a great success.
The Timing
Zhang’s departure is particularly untimely and unfortunate for him as Inter, after scratching and clawing for years after the cash stopped coming in from China, entered a virtuous cycle thanks to the Champions League money and their savvy management in the last couple of campaigns. They reached the point where they could reinvest the income from the sales and didn’t necessarily need ‘plusvalenze’ to stay afloat. It’s not the greatest spot to be, but it’s not too shabby either. The arrow was pointing upward thanks to the more profitable Champions League format and the Club World Cup.
Rather than the Chinese entrepreneur, Oaktree will capitalize on all of that, potentially flipping Inter for twice or thrice the figure it invested to get it, depending on how long it plans to stick around. The sale rumors will be the new bugaboo, but there might be some more immediate repercussions.
The Challenges and Clouds Ahead
The Nerazzurri closed the 2023 balance sheets with a €85.8M loss. They were in the black for €22.3M for the first six months of this season, but that was only a technical rebound. They should be down by €50M in 2024, La Gazzetta dello Sport informed. Their total debts amount to €800M, while the net financial ones to €308M, Calcio e Finanza reports. They are right on the edge of what’s viable.
If Oaktree mandates that Inter should improve on those fronts, perhaps even drastically so, sacrifices are coming. How big depends on the timetable. Their officials probably didn’t expect this outcome either, as they have been operating normally up until a couple of weeks ago. The growing prize money will help, but if the new owners are more in a rush, there are just two ways to cut the losses: selling players for a profit or lowering the payroll. The Nerazzurri are already behind the eight ball on the second proposition. They have completed two Bosman additions with pretty robust wages and will need to give Nicolò Barella, Simone Inzaghi and especially Lautaro Martinez pay rises to come to terms on their extensions.
RedBird Capital elected to accelerate the process started by Elliott, and Milan broke even last year. They opted to sell Sandro Tonali to have a solid window. The blow was softened by his ensuing suspension, but their midfield is still reeling.
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