Stadium, planning and structure key to Inter's financial future

Posted by Mike Whittaker

Getty ImagesIs it time for Internazionale to leave the San Siro?

With the release of the Deloitte Football Money League this week, I wanted to take a look at Inter's current financial situation, and how it can be improved in the future. The money league is ranked on a variety of revenue streams for each club, including; matchday ticket and corporate hospitality sales, broadcasting rights including distributions from participation in European club competitions, sponsorship, merchandising, and other commercial operations.

Surprisingly, given the financial issues facing Serie A clubs, Italy has the second highest representation in the league with five of their clubs appearing in the top 20, only England has more with seven.

This league shows the standing of the clubs for the 2011/12 season, as this is the most recent period with submitted accounts. Inter sit in 12th place in the table with a total revenue of €185.9 million, which equates to a serious drop of €25.5 million compared to the year before when the Nerazzurri held 8th place and a revenue of €211.4 million. This is why it has been imperative for the club to offload its highest earners over the last 18 months, and has less money to spend on new arrivals.

Inter's financial plight is a serious concern for the club, and for us fans who want the Nerazzurri to remain as one of Europe's elite teams, but also for them to become financially secure. Issues within the structure of Italian football make this more difficult than for the clubs operating in the other major footballing countries. The most limiting of these issues is the lack of stadium ownership, which shows in the significant difference between match day revenues for Inter and those for comparable clubs in other countries.

In my opinion, moving away from the Giuseppe Meazza into their own stadium must be a priority for Inter, the amount of money the club is losing every year due to not receiving 100% of the ticket revenue is phenomenal. If you compare the Nerazzurri's matchday revenue with Liverpool, a club that in 2011/12 had a similar average matchday attendance (approx 44,250) you can clearly see the difference - Inter made €23.2 million (the fourth lowest in the top 20), whereas Liverpool made a staggering €55.9 million.

With such a vast difference in revenue, the new stadium would pay for itself within ten years, and that's just with the current average attendance. A new stadium would also offer facilities and opportunities that would entice a larger number of fans to attend matches and spend their money in various other areas of the complex too. Not only that, as we've seen with various other stadiums around the world it would open the doors to alternative revenue streams that just aren't available in the outdated San Siro, things like sponsorship deals and renting out venue space for events such as concerts and shows that could add a significant proportion to Inter's cash flow. It could also bring the opportunity of moving the club's HQ to the stadium, saving the outlay for additional real estate.

Television broadcasting revenue for the club in 2011/12 stood at €112.4 million, and accounts for a massive 60 percent of Inter's total revenue, this is the largest proportion for any of the top 20 clubs in the money league. In that respect the Nerazzurri are quite lucky having the sixth highest broadcasting revenue, but the way the broadcasting money is split in Italy with the previous season and the last five season's league position having a bearing, this figure is likely to fall when the 2012/13 money table is published next year.

Another factor in the broadcasting revenue is how well the club does in various competitions - the longer a club stays in a tournament the more money it will receive from televised games. The prestige of the competition is also a massive factor with the Champions League paying more than appearing in the Europa league, as well as the bonuses paid for progressing in each competition it is plain to see why Massimo Moratti and Inter are desperate to return to the top table as quickly as possible.

The final part of the revenue breakdown comes from the commercial side of the club, such as shirt sales and sponsorship. For 2011/12, Inter's figure stood at a relatively pitiful €50.3 million, which again sees the Milanese club with the sixth lowest figure in the top 20. This is the area I see Inter having the biggest potential growth in the future. As I mentioned earlier, a new stadium would open many doors for sponsorship deals for the club.

I would also like to see the club negotiate a new shirt sponsor deal in the near future, either with the current sponsor Pirelli, a secondary company alongside the tire manufacturer or even just a completely new deal all together. It's reported Pirelli pay €12 million per season, as well as being a minority shareholder. This amount is one of the highest shirt sponsors in Italy, but compared to the rest of Europe, (some clubs receive in excess of €20 million) I can't help but think that a club like Inter should be able to negotiate a more lucrative deal.

Merchandising is another area that seems to be overlooked by Inter's business model so far, with Inter stores being few and far between outside of Milano. There are vast amounts of Interisti in countries such as China and Indonesia and the club should be taking full advantage of their existing fan base around the world.

The potential for growth in the commercial aspect of the club is mind-blowing. Bayern Munich actually makes a gargantuan €201.6 million just through their commercial dealings. To put Bayern's dealings into context remember Inter made a total revenue of €185.9 million. This is why I believe for the future security of Italian football all the Serie A clubs should work together and adopt the structure of the Bundesliga, a league that is quickly becoming the most financially stable, through careful planning and running of their clubs.

The key to Inter's future lies in the hands of its owner and president Moratti, who now for the sake of the club he loves has to start treating FC Internazionale like a worldwide brand, run it with a proper business structure and stop treating the club like a small family business. In my opinion he should run his club in exactly the same way he runs his oil refinery business, with the simple aim of making as much money as possible and being one of the best in the industry.

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