HONG KONG – The new, strong Chinese owner was supposed to bring Inter Inter back to its glory days. It was spent on prolific shooters like Romelu Lukaku and Christian Eriksen. After five years of investment, the Milan floor football club is at an incredible distance from the first Italian title in the last ten years.
Now the bill has arrived – and the future of Milan Inter is suddenly in doubt.
Suning, an electronics retailer who is the majority owner of the club, is tied to the money and is trying to sell his stake. The club is bleeding money. Some of his players agreed to defer payment, according to a person close to the club who requested anonymity because the information was not public.
Inter Milan held talks with at least one potential investor, but the parties could not agree on a price, according to others with knowledge of the negotiations.
Suning’s football aspirations are collapsing at home as well. The company abruptly shut down its home team four months after the club won the Chinese national championship. Some stars, many of whom chose to play there instead of at Chelsea or Liverpool, said they remained unpaid.
China has failed in a dream to become a global player in the world’s most popular sport. Encouraged in part ambitions of Xi Jinping, China’s top leader and an ardent football fan, a new breed of Chinese tycoon has invested billions of dollars in brand clubs and celebrities, transforming the game’s economy. Chinese investors spent $ 1.8 billion on acquiring stakes in more than a dozen European teams between 2015 and 2017, and the Chinese domestic league soaked in money paid the highest salaries ever awarded to foreign recruits.
But boasting has exposed international football to the peculiarities of the Chinese business world. The Communist Party’s deep involvement makes companies vulnerable to sudden changes in political winds. Free-spending tycoons often lacked international experience or sophistication.
Now conversations about default settings, fire sales, and hasty exits dominate discussions around tables in assembly halls. Mining magnate lost control of AC Milan in the middle questions about his business empire. Owner of a company for the production of soaps and food additives gave up his role at Aston Villa. An energy conglomerate after his share in Prague Slavia the founder has disappeared.
Suning’s condition reflects “the whole rise and fall of this era of Chinese football,” said Zhe Ji, director of Red Lamp, a sports marketing company that works for top European football teams in China. “When people were talking about Chinese football and all the attention it got in 2016, it came very quickly, but it also disappeared very quickly.”
In 2016, Suning paid 306 million dollars for the main share in Milan’s Inter. Suning is a household in China, and stores are stocked with computers, iPads and rice cookers for the country’s growing middle class. Although harmed by the Chinese e-commerce revolution, Alibaba, the titan for online shopping, counts as a major investor.
On a brightly lit stage to announce the deal for Inter Milan, Zhang Jindong, Suning’s billionaire, founder and president, raised a glass of champagne and talked about how the famous Italian team – which has won 18 championships since 1910 and none since 2010. – help his brand internationally and contribute Chinese sports industry.
Praising Suning’s “rich resources,” Mr. Zhang promised the club would “return to its glory days and become a stronger estate capable of attracting top stars from around the world.”
Under the leadership of Mr. Zhang’s son, Steven Zhang, now 29, the club has spent more than $ 300 million on stars like Lukaku, Eriksen and Lautar Martínez, the Argentine striker nicknamed Bull for his tireless pursuit of goals.
Suning also agreed to pay $ 700 million to the English Premier League for the rights to broadcast games in China in early 2019, astonishing the industry.
Suning spent the money on the home club he bought in 2015. He spent $ 32 million to acquire Brazilian midfielder Ramires from Chelsea and 50 million euros for young Brazilian striker Alex Teixeira, who chose the Chinese team instead of Liverpool, one of the most popular football franchises.
The recruits are employed in the sale of air conditioners and washing machines. In one ad, Mr. Teixeira encouraged the spectators buy chinese brand of device. “I’m Teixeira,” he says in Mandarin, adding, “come to Suning to buy Haier.”
The money, said Mubarak Wakaso, a Ghanaian midfielder, has helped make China attractive. “The money I’m going to make in China is far better than La Liga,” he said in a combination of Twi and English in an interview last year, referring to the league in Spain in which he once played. “I’m not telling a lie.”
Suning’s football bets were poorly timed. Chinese government began to worry that large conglomerates they borrowed too much, threatening the country’s financial system. A year after the deal with Inter Milan, Chinese state media criticized Suning for his “irrational” acquisition.
Then a pandemic struck. Although Inter Milan won on the field, they lost certificates from their San Siro stadium, one of the largest in Europe. Some sponsors have moved away due to their own financial pressures. The club lost about $ 120 million last year, which is one of the biggest losses recorded by a European football club.
Back in China, Suning was attacked by e-commerce as well as coronavirus. His troubles escalated in the fall when she decided not to seek a return on investment in Evergrande, a real estate investor and China’s most indebted company, worth three billion dollars.
Suning’s burden will become heavier. This year, must pay $ 1.2 billion in bonds. The company declined to comment.
Suning began to take drastic steps. Last year abandoned its broadcasting contract with the Premier League.
He then shut down his home team, Jiangsu Suning, in February, almost four months after the team won the Chinese Super League title against a team that controls Evergrande. At least one of the team’s foreign recruits has hired lawyers to help recoup unpaid salaries, according to a person involved in the matter.
One former Suning player, Eder, the star of the Brazil-born striker, started the football world after the media reported that Suning did not pay him. On Twitter, Eder said the comments were taken from a private internet conversation without his approval. His agent did not respond to requests for comment.
To save himself, Suning took a step that could complicate Inter Milan’s wealth. On March 1, it sold $ 2.3 billion of its shares to affiliated companies of the Chinese city of Shenzhen. The agreement gave the Chinese authorities the right to vote in the fate of Milan’s Inter.
Greater financial pressure is coming to Milan’s Inter. He has to pay a $ 360 million bond next year. A minority investor in Hong Kong, Lion Rock Capital, which acquired a 31 percent stake in Inter in 2019, could take advantage of an option that would require Suning to buy its stake for as much as $ 215 million, according to one of the people close to the club.
Inter Milan officials are seeking funding, a new partner or the sale of the team at an estimated $ 1.1 billion, the person said.
Until recently, the club was in exclusive negotiations with BC Partners, a British private investment firm, but failed to agree on a price, people who know the negotiations said.
Without fresh capital, Milan’s Inter could lose players. If it cannot pay salaries or pay fees for outgoing players, European football rules say it could be expelled from top competitions.
“We are worried, but we are not scared about this situation yet – we are just waiting for the news,” said Manuel Corti, a member of the London-based Inter Milan fan club.
“Because we are Inter fans,” he said, “we are never sure of anything until the last minute.”
Alexandra Stevenson reported from Hong Kong and Tarik Panja from London. Hi Li contributed to reporting from Hong Kong.