How Chinese owners Suning turned Inter into Serie A champions and Champions League finalists with massive spending — only for mounting debts, COVID losses, and failed sponsorships to hand the club to Oaktree. A must-read financial autopsy of winning without sustainability.From Growth to ControlOn 22 May 2024, ownership of Internazionale Milano passed to Oaktree Capital Management. With this, Inter Milan followed in the footsteps of its city rival A.C. Milan. While one might first think of on-field successes, the more telling overlap was off the pitch, in the boardroom. In 2019 AC Milan had been taken over, and in the meantime successfully turned around, by Elliott Management. Now Inter found itself at the onset of this turnaround.There was no auction, no press conference, no white-knight bid. There was simply a loan that had matured and could not be repaid. Suning, Inter’s Chinese owners that had acquired 68.55% of Inter Milan’s shares from Moratti and Tohir at a price of €270m euros in 2016, had borrowed €275m from Oaktree three years earlier at 12% interest. By 2024, the balance owed had grown to €395m.Suning could not pay, a credit event followed.It left the club in the hands of Oaktree, an American credit fund with at that time, over $192bn assets under management (AUM), that now suddenly found itself in control of a premier European football asset.**Oaktree inherited 99.6% of the shares of Inter, also acquiring the 31.0% shares from minority investor LionRock through a receiver sale.Coppa ItaliaLazioLAZ14 May 202603:00InterINTThe case of Inter Milan presents how consistent and unsustainable debt funding of on-field performance ultimately results in creditor ownership. Both Oaktree’s takeover and Elliott’s earlier move at AC Milan provide a case study in the intriguing and compelling value creation potential of distressed assets in the football industry.Cleats and Cashflows: private equity in footballSubscribe nowWithin the third edition of the Milan miniseries we’ll explore the road leading up to Inter’s takeover as well as Oaktree’s actions afterwards.Pre-Suning: A Fragile InheritanceBy the time Suning acquired a majority stake in Inter in June 2016, the club had already endured years of both financial and sporting decline. Between 1995 and 2013, Inter was controlled by the Moratti family, a period defined by significant shareholder funding with at its peak the historic 2009/10 treble under José Mourinho. Yet the success came at a substantial financial cost, with recurring operating losses consistently underwritten by family capital.Following a sequence of disappointing league finishes and growing financial pressure, Indonesian businessman Erick Thohir acquired control of the club in 2013, reportedly purchasing a 70% stake for approximately €250m, implying a total valuation of around €350m. At the time, Forbes ranked Inter as the fourteenth most valuable football club globally. Thohir’s arrival was initially welcomed by supporters, particularly as the Moratti era appeared increasingly unsustainable both financially and competitively.Thohir’s tenure marked the beginning of Inter’s transition from a traditional family-run institution into a more commercially oriented football business. Financial restructuring, management professionalisation, and international commercial expansion, particularly across Asian markets, became central priorities. Reports at the time indicated that Thohir also refinanced or restructured roughly €180m of club debt. While governance structures became more corporate under his leadership, sporting results remained inconsistent, with Inter finishing 5th, 8th, and 4th during his three seasons in charge under Walter Mazzarri and later Roberto Mancini.Ultimately, Thohir laid important organisational and financial groundwork for future ownership, but the broader structural weaknesses remained unresolved. Inter’s commercial profile lagged Europe’s elite, and the gap to Juventus domestically was equally wide. Core revenue (excl. player trading) in 2015/16 stood at roughly €180m, less than half of the €388m Juventus generated. The club lacked Champions League income, stadium ownership, and meaningful commercial momentum. What Inter still possessed, however, was a globally recognisable brand whose stature exceeded the strength of its balance sheet.Cleats and Cashflows: private equity in footballSubscribe nowTo remain competitive despite these limitations, Inter increasingly turned toward financial engineering. In 2014, the club created Inter Media & Communication, a special purpose vehicle (SPV) designed to hold the club’s media rights, sponsorship revenues, historical archive, and intellectual property. Inter subsequently transferred the club’s brand into the SPV for approximately €139m, booking a significant one-off accounting gain that transformed a heavy operating loss into a statutory profit of roughly €33m.More importantly, the SPV later became the collateral foundation for Inter’s bond programme, a structure that would fundamentally reshape the club’s financial architecture in the years ahead. In many ways, the transaction reflected a broader pattern that would continue under subsequent ownership: monetising future revenue streams to solve present financial constraints. The 2014 restructuring was the prototype. The later bond issuances became the scaled version.By the time Suning arrived, Inter was already a club dependent on recurring shareholder support, accounting optimisation, and future revenue securitisation. The leverage intensified later. The structural dependence had already begun.The Suning BetThe Thohir era formally came to an end on 6 June 2016, when Zhang Jindong’s Suning Holdings acquired a 68.6% controlling stake in Inter for approximately €270m, implying an equity valuation of around €390m. Eight years later, when Suning lost control of the club, that same stake had reportedly been written down to just €148m on its own books. Between those two valuations sits the defining contradiction of the Suning era: hundreds of millions of euros of investment, renewed sporting success, a return to the summit of Italian football, and eventually a Champions League final, but also a financial structure that became increasingly fragile and unsustainable.Suning’s strategy was evident from the outset: restore Inter to domestic and European prominence through aggressive squad investment. It followed the dominant logic of modern football economics: the clubs that spend the most generally maximise their probability of winning. On the pitch, the approach initially worked. Antonio Conte arrived in 2019, finished second in his first season, and delivered Inter’s first Scudetto since the Mourinho era in 2020/21. The title-winning squad was assembled rapidly and expensively, with players such as Romelu Lukaku, Achraf Hakimi, Christian Eriksen and Arturo Vidal symbolising a model built around immediate competitiveness rather than gradual financial consolidation.A quick look at the financial trajectory illustrates the imbalance. Between 2016 and 2021, Inter’s revenue increased from approximately €241m to €354m, a rise of roughly 51%. Over that same period, however, wages increased by more than 110%, from €124m to €262m. The club’s squad cost ratio became increasingly problematic. On a reported basis, squad costs as a percentage of revenue reached levels of 91.4%, 103.9%, and 95.4% between 2020 and 2022, far above UEFA’s recommended 70% sustainability threshold.**Calculated on the basis of UEFA’s ratio, using average net transfer profit in L3Y, with 2019 and 2020 figures altered due to missing data.Cleats and CashflowsFigure 1: A graph showing the development of Inter’s core revenue (excl. player trading), wages and the UEFA squad ratio (used the FY19-FY24 window due to the unavailability of detailed FY16-FY18 figures).The conclusion was unavoidable: Inter was not operating as a financially sustainable football club. It increasingly resembled a Champions League-level wage bill attached to a revenue base that could not structurally support it.Three structural dynamics of the Suning era are particularly important because each one becomes central later in the story.The first was the COVID-19 shock. Across the 2019/20 and 2020/21 seasons, Inter reportedly lost approximately €121m of revenue, including around €83m from matchday income, €20m from commercial activity, and €18m from broadcasting. The pandemic did not create Inter’s financial problems, it accelerated them. By the close of 2020/21, cumulative losses had surpassed €450m, while the wage bill was consuming close to three-quarters of revenue. The model required Champions League participation and full stadiums simply to remain stable. The pandemic delivered neither.Cleats and Cashflows: private equity in footballSubscribe nowThe second structural issue was the collapse of Inter’s Chinese sponsorship ecosystem. At its peak in 2018/19, Inter generated approximately €160m in commercial revenue, including around €97m from Chinese commercial agreements, much of it linked directly or indirectly to Suning-affiliated counterparties. Yet this revenue base proved far less durable than it initially appeared.The reversal was sharp. Commercial revenue fell from roughly €160m in 2018/19 to approximately €105m the following year, before hovering between roughly €95m and €120m over the subsequent seasons. Although commercial income began to recover from 2022/23 onwards, it remained below the 2018/19 peak by 2023/24.This decline was not merely an Inter-specific issue. It formed part of a broader retreat of Chinese capital from football. The same forces that had undermined Li Yonghong’s ownership of AC Milan also began reshaping the environment around Inter. After years in which Chinese capital had flowed aggressively into European clubs and the Chinese Super League, the government moved to curb speculative overseas spending and reduce football-related excess. The era in which Chinese clubs could pay extraordinary salaries to attract players such as Oscar and Hulk was coming to an end.For Inter, this shift directly weakened the commercial ecosystem that Suning had helped construct around the club. By 2022/23, the model had further unraveled. Cryptocurrency sponsor DigitalBits failed to honour the €85m shirt sponsorship agreement it had signed, forcing Inter into an emergency replacement arrangement with Paramount+ reportedly worth around €11m annually. Around the same period, the club recorded a €61m receivables write-off linked to Chinese sponsorship contracts.The result was a major structural blow: a commercial revenue base that had once appeared to validate Suning’s international growth strategy became volatile, dependent, and ultimately fragile. Instead of becoming the engine that would support Inter’s rising wage bill, commercial income became another source of instability.Cleats and CashflowsFigure 2: A graph showing the development of Inter’s commercial revenue and write downs on receivables and exceptionals (used the FY19-FY24 window due to the unavailability of detailed FY16-FY18 figures).The third dynamic was Inter’s growing dependence on player trading. Profitability during the Suning years increasingly relied on capital gains from player disposals rather than recurring operating profitability. The 2021/22 financial result, for example, included approximately €105m of gains on player sales, compensating for an operating loss of roughly €202m. Lukaku’s sale to Chelsea generated around €67m of profit, Hakimi’s transfer to PSG added another €34m, while André Onana’s sale to Manchester United reportedly generated roughly €42m. A small number of high-profile exits accounted for the overwhelming majority of Inter’s player trading profits during the period. This was not a structurally recurring revenue stream; it was a sequence of one-off disposals used to bridge an underlying operational deficit.Cleats and CashflowsFigure 3: A graph showing the development of Inter’s profit on player disposals and operating profit (excl. player sales, used the FY19-FY24 window due to the unavailability of detailed FY16-FY18 figures).A Champions League Wage BillAt its core, Suning’s thesis rested on a familiar football assumption: improved sporting performance would eventually catalyse broader financial growth. Greater success on the pitch would lead to higher revenues, stronger sponsorships, expanded commercial appeal, and ultimately financial sustainability. Yet the scale of the cost inflation consistently outpaced the growth of the underlying revenue base.The cumulative result was staggering. Across the eight-year Suning period from 2016 to 2024, Inter accumulated approximately €696m in pre-tax losses.Cleats and CashflowsFigure 4: A graph showing the development of Inter’s annual pre-tax profit and cumulative pre-tax profit.To sustain operations, remain competitive, and continue funding the squad, the club became increasingly reliant on debt and external financing. Gross financial debt, including bonds, shareholder loans, and bank facilities, and net financial debt evolved approximately as follows:Cleats and CashflowsFigure 5: A graph showing the development of Inter’s gross financial debt and net financial debt.By the early 2020s, Inter had rebuilt itself into a title-winning club. Yet beneath the trophies sat a financial structure increasingly dependent on debt, refinancing, and future revenues that had not yet arrived. The question, therefore, becomes unavoidable: how did Suning maintain control of Inter for so long despite mounting losses and increasing leverage?The answer lies in financial engineering, most notably through securitised bond issuances and increasingly sophisticated financing structures, the subject of the next blog.Cleats and Cashflows: private equity in footballSubscribe now
