Inter Milan Backed By Chinese Investment, But May Be In Financial Trouble
Hong Kong businessman Kenneth Huang Thursday was revealed as the "front-man for a consortium of mainland investors" that is paying as much as €75M ($92.9M) for a 15% stake in Italian football club Inter Milan, according to Tom Holland of the SOUTH CHINA MORNING POST. Huang, in the past, tried to buy Liverpool FC in a deal that was described as "stone crazy." The deal did not come to anything, but Huang has now "hit the headlines again." Inter is "such a dog financially that in comparison, even loss-making Liverpool would have been a champion investment." On the outside Inter "looks relatively attractive." The club boasts net revenues from the '10-11 season of €211M ($261.4M). The club ranks eighth in Deloitte's Football Money League. However, in European football, "handsome revenues seldom translate into fat profits." The cost of signing and retaining "star players is ruinous." In the '10-11 season, Inter's wage bill "came to a thumping" €234M ($289.9M), which is more than ManU paid, and €23M more than the club generated in revenue. And things are "only going to get worse." About 60% of the club's revenues have "traditionally come from selling TV rights." However, a new deal that will implement more evenly distributed broadcast fees among Italian clubs "will eat into Inter's TV revenues from domestic league games" in the seasons to come. Meanwhile, the club is "struggling to generate income from its two other main revenue streams." Inter's "turnstile takings" are only around one-fourth of those earned by the big English or Spanish clubs, and its commercial revenues from sponsorships and kit sales sat at €54M in '10-11, "paltry in comparison" with the €172M ($213M) earned by Real Madrid and the €177M ($219.3M) by Bayern Munich (SCMP, 8/3).