Italian professional soccer has a complex regulation, resulting from the interactions among State laws, collective bargaining agreements, and other regulations issued by the Italian Soccer League, the acronym is FIGC. However, the basic rules of FIGC in the matter of financial management of sporting clubs are only apparently entangled, and can be summarized as follows: there’s a duty of complete transparency, anyone should know who is the true owner of any club in a real time, and a duty of permanent financial solvency and economic solidity (see articles 20-bis of NOIF, and articles 31, 32 of CGS). The purposes of the basic rules are evident, in pro soccer the principles of loyalty, fair competition, and legality can’t bear any exception. The three most important clubs in Italian soccer are Juventus FC Turin, Inter FC Milan, and AC Milan in Milan. Due to a long-term economic crisis of Italy, started in the year 1992 and worsened by the entrance in the euro zone, the properties of Inter FC and AC Milan are not Italian. While AC Milan appears as a solid and transparent project of major investment funds from US, the property of Inter FC has been acquired by Suning Holdings Group Co., Ltd., China, on June 6, 2016.
I attempt a simple explanation of the structure of Inter FC, which is a joint-stock company. Previously a warning, a simple explanation of something extremely complex can’t be very precise, and can’t be a guide for professionals. Differently, I would like to inform common persons about the situation of Inter FC, because official media are systematically applying disinformation, since the year 2016. Suning Group is made of 5 different holdings, one of which is Suning Sports. Suning Sports has acquired the control of the 68,55% of the shares of Inter FC through three companies named Great Horizon, Grand Sunshine, and Grand Tower, appositely founded in Luxembourg. Minority corporate packages of Inter FC are owned by Erick Thohir (a figurehead who exclusively gained money from Inter FC), Pirelli Co. (in a deep economic crisis), and Massimo Moratti (who owned SARAS Co., recently sold). As you can see, Inter FC is a Chinese box, since the year 2016. Well, the original sin is clear. FIGC organization has consented the continuation of the affiliation of a club not transparent, with scarce guarantees of financial solvency and economic solidity. Unluckily, the global pandemic of SARS-COV-2 has provoked an economic crash of Suning Holdings Group. Experts say that the patrimony of the Company has reduced approximately from euro 8 billion to euro 360 million. Consequently, various enterprises are near to bankruptcy, or insolvent. In February 2024, they say that the debts of Suning Group are estimated at euro 26 billion. About that, the government of China has established a State financial aid. Thus, the European, major soccer clubs to receive State aids, direct or indirect, are Manchester City, PSG, Newcastle FC, Juventus FC, and Inter FC. Of course, the praxis is opposite to financial fair play.
Apart from the cited economic crash, the strategy of Suning Sports in managing Inter FC has been constant, a massive usage of bond loans. The 3 emissions reported by the international media: 300 million euro in 2017 (maturity 2022, interest rate six per cent), 75 million euro in 2020, 415 million euro in 2022 (maturity 2027). In Italy, only 3 soccer clubs are utilizing bond loans (Inter, Juventus, Genoa). I honestly think that bond loans are not compatible to the principle of financial fair play in sports, because they belong to ordinary banking activity. More than that, in my opinion, the 3 bond loans of Inter FC are illegal, because not responding to the parameters of the article 2412 of the Italian Civil Code. In effect, the share capital of Inter FC is euro 19.195.313, the mandatory corporate reserve is euro 3.839.063, and the available corporate reserve is euro 0 (because activities have always been inferior to losses). Consequently, the maximum legal amount of the sum of all the bond loans of Inter FC is: (19.195.313 plus 3.839.063) multiplied per 2, equal to euro 46.068.752. With other words, each bond loan of Inter FC has been illegal, because not responding to the article 2412 of the Italian Civil Code.
More in detail, how has Inter FC (Suning Sports) faced the crisis derived from the crash of Suning Holding Group? Suning, since the year 2015, has been a partner of an e-commerce firm, Alibaba, with mutual investments. In the year 2018, Alibaba financed Suning Sports, and in the year 2020 Suning Sports has pledged all the shares of Inter FC (the 68,55%), in favor of Taobao Software Co., Ltd., China, a company of the Alibaba Group. Well, each expert all over the world knows that a pledge on the totality of the control package of a company equals to a public confession of insolvency. In the year 2020, has someone informed the soccer leagues FIGC (Italian) and UEFA (the European equivalent of FIGC, with similar rules) of the insolvency of Inter FC? No, I suppose, because no sanction has been applied, although the kind of communication is a precise duty of all the clubs in European pro soccer.
After that, Suning Sports has acted in three directions. By one side, the holding has defended its control of Inter FC, by creating a new Chinese box, in order to avoid a simple sale made by creditors with a pledge of shares. They say that about the 30% of the shares of Inter FC has been “sold” (unverified) to LionRock investments, Hong Kong, through an offshore company, detained at 100% by LionRock, named International Sports Capital Co., Ltd., Cayman Islands. The offshore company is entirely controlled by Dato Capital Ltd., which is entirely controlled by Netamo Systems SL. Secondly, Suning Sports has decided to obtain a lot of money from the cession of Inter FC, much more than the euro 400 million previously gained by Erick Thohir, with new, relevant debts of Inter FC, and others debts of the entire Group to pass to future buyers of Inter FC. A part of the new debts serves to make Inter FC very attractive by winning titles, and another part serves to finance Suning Group. Finally, Suning Sports has asked money for Inter FC to Goldman Sachs US. The reasons of the choice might be two: 1) it’s known the interest of American investment funds to the acquisition of clubs in Italian pro soccer; 2) Red Bird investments, belonging to the constellation of Goldman Sachs itself, has acquired AC Milan for the sum of 1,2 billion euro, equal to the sale price that Suning Sports attributes to the control package of Inter FC. I don’t know exactly why Goldman Sachs has decided to help Suning Sports, it will be clear only after May 20, 2024. Back to the most relevant facts, in the year 2021, the investment fund Oaktree Capital Management, bound to Goldman Sachs, has acquired the 31% of the control package of Inter FC, and has lend to Suning Sports a sum of 275 million euro. The sum should be returned by May 20, 2024, plus the interest of 12%. The guarantee is the pledge of the 100% of the shares of Great Horizon, Grand Sunshine, and Grand Tower, the three companies in Luxembourg, born to detain the shares of Inter FC for Suning Sports. They say that on May 21, 2024, in case of no return of the amount of the above, Oaktree Capital is going to automatically acquire the control of Inter FC. Sorry, I’m not quite sure about that.
In summary, only Suning Sports knows exactly who effectively detains the control package of Inter FC, and how many pledges of the shares there are (only two?). Anyway, I prudentially estimate the debts of Inter FC at about euro 1,5 billion (some experts say “more than euro 2 billion”), including the indirect effects, but inevitable, of the two pledges of shares. After May 2024, what will the future of Inter FC be? Honestly, I don’t know. Is there someone to lend to Suning Sports the money to restitute to Oaktree Capital, to let Suning sell the control of Inter FC without intermediaries? I am skeptic about that. How much does it cost to buy the control of Inter FC, and to sustain debts and taxes? I estimate about euro 3,5 billion. More than that, the procedure is incredibly complex, many experts and many months would be needed, and highly risky. In effect, no one knows what FIGC and UEFA are going to do with Inter FC, when all that you’ve read will be known to the general public. Equally, no one knows what unsatisfied creditors are going to do against Suning Sports, especially Chinese banks and Oaktree Capital. For now, 7 Chinese banks have started two civil lawsuits against Suning Sports, before the Court of Milan. Eventual buyers of Inter FC need also to know that the Italian Public Agency of Entrances has the autonomous power to ask to the Court of Milan a formal declaration of the bankruptcy of the club, for unpaid taxes at more than euro 50 million.
Excuse me, the page is long, and a little bit boring, it’s a fatal consequence of the many complications of the above. So, it’s time for a conclusion. Who is going to win the decisive match of Inter FC versus debts and bad management? I think that, in every case, the only winner will be Satan. In effect, there are two possibilities. The first, Inter FC will be saved, through an ordeal that requires two mountains of false documents and of fresh money, plus many months (while the time for soccer clubs is always tight); in this case, Italian and European soccer will have to face a dramatic loss of credibility. The second, Inter FC will file for definitive, irremediable bankruptcy; in this case, the chairman of FIGC, Mr. Gabriele Gravina, and the chairman of UEFA, Mr. Aleksander Čeferin, should immediately resign. Which ending do I prefer? Sorry, I’m always sad when the devil is the unique to be happy. Understandingly, the mix of the page is suitable to the preferences of the sure winner, Satan the prince of evil.
File name is “hard rock for happy devils, by Max Look DJ (end of Feb 2024)”, 1 hour and 20’ of heavy dances, with slow and dramatic rhythms.
Satan in pro soccer, the playlist:
Judas Priest – united
Korn – helmet in the bush
Lynyrd Skynyrd – gimme back my bullets
Europe – time has come
Dio – the last in line
Slave Master – freedom
Rammstein – mein Teil
Saxon – denim and leather
Skid Row – I remember you
Fear Factory – shock
A – nothing
Fugitive – two hearts
Audioslave – show me how to live (T Ray remix)
Motorhead – you better run
Fishbone – swim
Spider – rock tonight
Steve Vai – the animal
Slayer – road between the lies
Jesus Lizard – gladiator
System of a Down – X
Magnum – invasion
AC DC – rock ‘n’ roll ain’t noise pollution
