A year after being seized by its main creditor Oaktree Capital, Inter Milan stands on the brink of an unlikely triumph. On Saturday night the famed Italian football club faces Paris Saint-Germain in the final of the Champions League, European football’s highest prize.
The US distressed debt investor took control of Inter a year ago after its previous owner, Chinese retailer Suning, failed to repay a €400mn loan secured against its controlling stake in the club, which people close to the firm say was valued at about €1bn at the time of the ownership change.
“Oaktree did a smart thing — they seized it on the cheap,” said the owner of a rival European football club.
Professional investors including sovereign wealth funds, hedge funds and private equity firms have been pouring money into European football in recent years.
But Inter marked Oaktree’s first foray into sport and some observers question whether a $203bn investing powerhouse that specialises in chasing companies for unpaid debts has the skills to navigate the unforgiving world of Italian football.
“These guys have zero understanding of football, media rights and stadiums,” said a senior executive at another European club. “They think they know everything but they don’t. Most people expected them to sell immediately but surprisingly they haven’t.”
Inter’s recent fortunes have striking parallels with those of its crosstown rivals AC Milan, which was seized by US hedge fund Elliott Management in 2018 after the club’s Chinese owner defaulted on a €300mn loan. Elliott revamped the club on and off the pitch before selling it three years ago for €1.2bn to Gerry Cardinale’s RedBird Capital Partners.
Unlike Elliott, Oaktree inherited a team that was thriving on the pitch — Inter were crowned Italian champions shortly before the firm took control and had appeared in the Champions League final a year earlier, where they lost to Manchester City.
However, the club has been struggling financially for years with persistent losses and high debt. How and when Oaktree might ultimately exit is also a big unknown — Inter had been for sale for more than two years before Suning’s debt default but had struggled to find a buyer.
Although turnover rose €48mn in the 2023-24 season to a record €473mn as strong results on the field boosted commercial revenues, Inter lost €36mn — an improvement from an €85mn loss a year earlier but still its 10th straight year without profit. During that period, Oaktree injected a total of €47mn of capital, according to the club.
Following the investment industry’s typical playbook after acquiring a business, Oaktree started with a 100-day plan.
Twelve months later it is behind schedule, according to one person familiar with the situation, who said that while it had found that things in Italy take longer than it had anticipated, its vision of how to strengthen Inter’s financial and operational stability remained unchanged.
Oaktree has sought to change “people and attitudes”, the person said. The club last June unveiled a new board that includes several representatives of the firm and promoted former director Giuseppe Marotta to president and chief executive.
The executive team has tried to focus on maximising revenues by renegotiating contracts with existing sponsors, finding new commercial partners and identifying growth opportunities. At €112mn, Inter’s commercial income last season was less than a third of PSG’s.
“It means thinking about running this club in a sustainable way, which is not what it had been,” said the person familiar with the situation.
As well as fixing the club’s finances and commercial operations, Oaktree will have to oversee the rebuilding of an ageing squad. Inter have fielded the oldest team in both the Italian league and the Champions League this year, with an average age of just under 30.
Oaktree plans to use the “Champions League dividend” — the increased TV revenue and prize money from reaching the final — to invest in its youth teams and women’s squad, and upgrade its pitches, according to the person familiar with the situation.
Inter must also move past previous disappointments this season, having lost the final of the Italian Supercoppa to AC Milan in January and finished second in Serie A behind Napoli despite being top of the table for much of the season.
Looking further ahead, Oaktree’s most challenging task — and one crucial to the club’s finances — is to build a new stadium to replace the increasingly dilapidated San Siro, home to both Inter and AC Milan.
Demolishing the iconic venue is fraught with difficulties, from planning and financing to local politics. “Sometimes it felt like talking about knocking down San Siro was like talking about knocking down the Colosseum,” said the person familiar with the situation.
Inter and AC Milan have explored building separate venues outside the city limits. However, RedBird’s Cardinale told the Financial Times that the arrival of new owners at Inter had given him hope that a joint project to rebuild the San Siro would finally get off the ground.
“With the two of us joining forces, we should be able to bring a world class stadium to Milan which would set the standard for the rest of Italy and continental Europe,” he said.
For now the focus is on Saturday evening. Among those in attendance at Munich’s Allianz Arena will be Howard Marks, co-founder of Oaktree, and Alejandro Cano, its co-head of Europe who is overseeing the Inter investment.
Victory over Qatar-owned PSG would bring not only the laurels of being crowned European champions but €25mn in prize money.
Pundits and bookmakers see PSG as the favourites. Aside from boasting a youthful and exciting line-up of players, the French champions had double the revenues of Inter last season.
But having defeated both Bayern Munich and Barcelona in dramatic fashion on the way to the final, Inter executives reject the underdog label.
“We’ve overcome world-class opponents . . . We’ve reached the final on merit,” Marotta said at a press conference this week. “We mustn’t be arrogant, but ambitious.”
Additional reporting by Silvia Sciorilli Borrelli in Milan
