New Delhi: Reigning Italian football champions, Inter Milan, came under new ownership Wednesday after the team’s Chinese owners — Suning Holdings Group — failed to make a loan repayment of nearly 400 million euros, which was due Tuesday.
Inter Milan (F.C. Internazionale Milano) was awarded the 2023-2024 Serie A (top division for men’s football in Italy) trophy Sunday. Its 20th league title was wrapped up earlier this year, after a near perfect season of only two defeats so far, and 29 victories.
Off the playing field, however, the club finds itself with a new owner — Oaktree Capital, an American asset management company. The debt-fuelled acquisition spree by large Chinese firms in recent years has seen numerous filings for bankruptcy and non-payment of loans.
Oaktree said in a statement Wednesday, “On 22 May 2024, Oaktree Capital Management, LP (Oaktree) are the owners of FC Internazionale Milano (Inter or the Club). This follows the failure to repay a three-year loan made by Oaktree to Inter’s holding company on 21 May 2024, with an overall balance of approximately EUR 395 million.”
Alejandro Cano, a managing director of Oaktree, added in the statement that the focus of the new ownership would be the long-term future of the club.
“As new owners, we recognise our responsibility to the community, history and legacy of Inter. We are committed to the long-term success of the Nerazzurri (Blue and Black colours of the club), and believe that our ambitions for the club are united with its fans in Italy and the world,” said Cano.
Chinese retail giant Suning has been caught up in a liquidity crisis since at least 2020, after an acquisition spree driven by debt, according to Nikkei Asia. It has sought multiple bailouts in recent months to continue operations.
Chinese firms, after the 2008 global financial crisis, buoyed by easy credit from state-owned banks, started investing heavily in a myriad of deals across the world, in what has been called a “grey rhino” phenomenon.
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China’s debt-fuelled football ambitions
Grey rhinos are Chinese companies with high debt, deeply entrenched in the Chinese economy and involved in numerous deals, according to the New York Times. For example, between 2012 and 2017, four Chinese firms — Anbang, Fosun, HNA Group and Wanda — made foreign acquisitions worth $41 billion, as reported by the American daily.
As a part of their foreign acquisitions, Chinese companies looked to football. Wolverhampton Wanderers, A.C. Milan, Inter and F.C. Sochaux were bought by Chinese firms. While Wolverhampton Wanderers remain under Chinese ownership, both A.C. Milan and Inter have since been seized by debtors. F.C. Sochaux lingers in the third tier of French football.
In Italy, Inter is not the first club with a Chinese owner to be seized by an American fund due to the failure of repayment in loans.
Its crosstown rival A.C. Milan was bought for $860 million in 2016 by Li Yonghong, a Chinese business-person from Silvio Berlusconi, the former Italian prime minister. In July 2018, Li’s ownership came to an end, with Elliot Investment Management seizing the club. Li had borrowed about $354 million from the American fund, which he failed to repay a year later.
In similar fashion, Chinese conglomerate Suning, which has been facing financial issues, raised capital from Oaktree for Inter in 2021. Three years later, it failed to make the required repayments and the club has now been seized by the American fund.
F.C. Sochaux, founded by French carmaker Peugeot, came under control of Nenking Group in 2020, and was relegated by 2023, after the Chinese ownership failed to generate enough cash to keep it running.
However, this phenomenon of Chinese private ownership of football clubs running into financial issues is not unique to the clubs acquired abroad. Even within China, a large number of clubs have faced financial headwinds as the economic situation in the country worsened, coupled with the fallout of the COVID-19 pandemic.
Between 2020 and 2021, 16 clubs shut operations, including Chinese champions Jiangsu FC, also owned by Inter’s previous owners — Suning Holdings Group.
Real estate firms, such as Evergrande Group owned successful teams in the league (Guangzhou FC), which have struggled since 2020. Evergrande Group was ordered by Hong Kong court to be liquidated earlier this year.
(Edited by Mannat Chugh)
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