Inter’s annual shareholders meeting last week made headlines for several major reasons, with significant takeaways about the club’s current state and future plans regarding not only the organization’s finances, but also the competitive “sporting” resurgence of the team itself.

The meeting just so happened to have already been scheduled for the morning of November 27th, which turned out to be just two days after our 2-0 loss to Real Madrid on November 25th. The mood around the club was already anxious even before then because of a frustrating start to the new season, with results in the first couple of months failing to meet the lofty expectations for Antonio Conte’s team as potentially serious title challengers.

Photo by Claudio Villa - Inter via Getty Images

Despite the manager’s first season with Inter ending up as the club’s most successful since the 2009/10 treble season, the #ConteOut movement had already begun to fester among a more jaded section of the fanbase by the time of the international break in mid-November. After that humiliating performance in a must-win match against Real Madrid, due in large part to “Conte signing” Arturo Vidal’s indefensibly stupid red card for harassing the referee, the increasingly widespread criticism of the coach went into overdrive as more and more Inter fans called for Conte to be sacked.

At the end of last season, the board came together for an infamous meeting with Conte, after he had spent the majority of August publicly threatening the possibility of leaving Inter. Specifically, the main source of the manager’s frustrations was how he and the players had received “very little protection” from negative media narratives — something that Conte clearly believes a big club’s executives are supposed to provide for their team.

Fortunately for Conte, the annual shareholders meeting provided the perfect opportunity for Inter’s board to publicly address the growing disapproval of the manager right away. Club President Steven Zhang and “Sports Area” C.E.O. Beppe Marotta honored their agreement with Conte from that infamous meeting by showing a fully unified front as they used their speeches to definitively shut down any and all speculation about Conte’s job security.

Speaking with the authority of Suning, as the primary executive representing the club’s majority shareholders, Zhang called Conte a “true leader” and praised how he overcame the challenges of a pandemic lockdown to achieve Inter’s best season since the treble a decade prior. Furthermore, the Club President declared that the manager had “all the professional and human qualities required to fulfill [the] mission” of Suning’s rebuilding “project.”

Marotta doubled down on this strong show of faith in the manager, unambiguously calling Conte “one of the best coaches in the world” and praising the progress already made in his first season at the club. Most importantly, Marotta left absolutely no doubts about the manager’s job security for the foreseeable future, specifically declaring that Inter’s board is “creating a LONG-TERM project around Antonio Conte.”

Photo by Claudio Villa - Inter via Getty Images

Conte and the players responded positively with a 3-0 win against Sassuolo — who were previously undefeated — on November 28th, just a single day after the shareholders meeting, highlighted by goal contributions from frequently-criticized midfielders Roberto Gagliardini and Vidal. Conte’s team further built upon this momentum in the very next match, taking on the Champions League Group B leaders and earning redemption with a 3-2 road win against Borussia Mönchengladbach on December 1st.

Photo by Claudio Villa - Inter/Inter via Getty Images

Full Videos of the Three Main Speeches:

Club President — Steven Zhang

Club President Zhang’s speech is the only one of these three that was actually delivered in English, so for anyone reading this who is interested, it might be worth watching if you have the time!

Speaking of the 29 year old, Zhang was recently awarded the “Leading Emerging Partner” prize by the Italian Consulate in Shanghai, in recognition of his contributions to the development of relations between Italy and China. Luca Ferrari, the Italian Ambassador to China, presented the award on November 25th during a gala event in celebration of the 50th anniversary of diplomatic relations between the two countries.

“Sports Area” C.E.O. — Giuseppe Marotta

“Corporate Area” C.E.O. — Alessandro Antonello

Relevant Links from Inter’s Official Website:

• Full transcript of Club President Zhang’s speech
• Article summarizing the official 2019/20 Financial Results

Excerpts Highlighting the Main Takeaways:

Photo by Claudio Villa - FC Internazionale via Getty Images

Comments on the team’s “Sporting Performance”:

Excerpted Section from Club President Zhang’s speech:

The Sports Area, led by CEO Giuseppe Marotta, achieved very positive results last season.

At the beginning of last season, we set ourselves the ambitious objective of beginning to lay strong foundations upon which to build a new era and gradually bring success back to Inter.

Our aim for last season was to begin building a winning mentality, a sense of belonging and a spirit of sacrifice, as well as trying to reduce the gap with our competitors.

In Antonio, we identified all the professional and human qualities required to fulfill this mission. Antonio took charge of Inter’ squad and instantly became a true leader.

The players showed maximum dedication and the spirit of sacrifice that was asked of them.

The league had to be put on hold for three months, in dramatic circumstances. Lockdown was an immensely difficult time for all clubs, especially for the ones in the midst of a process of growth.

However, the changes demanded by the coach led to clear results.

We finished second in the league, a result that meant we qualified for the Champions League for the third year in a row.

And at the end of a grueling yet exciting campaign, we competed in a European final for the first time in ten years.

We know this is the level that Inter must compete at. And we also know this result is not to be taken for granted.

We fight for this every year for the past 4 years since Suning take over.

On-field success is the objective that Inter must always strive for – for itself as a club and for its extraordinary fans.

We are confident that the season just gone has laid the foundations for us to build the success of the club and ensure a great future for us and for the entire Inter family.

Our aims for this season are the same: to continue to grow and establish ourselves as we continue down this path.

Photo by Claudio Villa - FC Internazionale via Getty Images

Full Transcript of “Sports Area” C.E.O. Marotta’s speech:

Credit where it’s due — SempreInter already translated and published a transcript of Marotta’s full speech, so all that I actually had to do for this part was simply copy and paste with a bit of re-formatting.

The season that ended on August 21 was undoubtedly the most difficult season in the world of sport. Only the two world wars had had such shocking effects. Serie A being suspended by a government decree is a unique event in the history of Italy and unprecedented in football.

The 2019/20 season for Inter has sanctioned the principle of a new path. From the beginning the clear goal we had set ourselves was to consolidate the sporting project that the owners had outlined with far-sightedness and competence creating a model on solid foundations that will allow us to return to winning over time through a path of continuous and gradual growth.

We entrusted the management of the team to Antonio Conte, one of the best coaches in the world, who immediately shaped the group in terms of mentality, in the sense of belonging and guaranteed quality of performance and continuity of results.

The season had to come to a dramatic halt for over three months. The lockdown represented an immense difficulty for the clubs, even more so for ours, engaged in a path of construction and growth that has been interrupted.

With courage, self-denial and a spirit of sacrifice we resumed our journey, which ended with finishing second place in the league with 82 points, the most points since 2009/10, the year of the treble, with the best defense in the league and the second best attack.

Even though our journey in Europe has been exciting, we have given all Inter fans a month of great emotions by bringing Inter back to a European Cup Final after ten years.

We are creating a long-term project around Antonio Conte, with whom we have seen the sporting results and values.

We have valued our young talents, I am thinking of Lautaro Martinez, Barella, Bastoni. Inter have become even more attractive for world class players.

Careful and prudent financial management was the basis of the team’s signing policy for the current season. It was a consequence of the general economic context of contraction and of an anomalous transfer window in terms of timing and duration. The majority of the big European clubs operated in the same way.

In a scenario of great uncertainty, still in the midst of the pandemic and the painful limitations that the emergency imposes, the 2020/21 season has restarted.

We know perfectly well that this will also be an anomalous season from an economic and sporting point of view — all over the world, due to the health emergency, the watchword is austerity.

The issue of football sustainability, already widely emerged in the pre-Covid era, is crucial in an unprecedented phase of crisis. The reduction in the cost of labour is a necessary step, to which all components must be followed with a sense of responsibility and realism.

Without real downsizing, this system risks failure. Equal attention must be paid to correctly recognize the great importance that football plays in the ranking of the Nation’s industries in terms of contribution to tax revenues, favoring a certain mechanism of reference for taxation.

Helping the sustainability of the football system without incurring simple demagoguery indirectly means providing enormous benefits to the country system.

The state of mind of great concern of the players for their own health and that of their families; the cases of contagion that involve sudden unavailability, create a great psychological and physical difficulty that inevitably affects the preparation and the random outcome of the matches.

We are asking for an enormous sacrifice from the athletes, who are often also called up for avoidable commitments with their national teams and subjected to unnatural and obsessive rhythms, and to the technical and organizational structures that have had to adapt to an unprecedented emergency situation.

Inter have started a project with the aim of always being competitive until the end of all the competition in which they participate.

The union of intentions between owners, management and coach is the basis for facing together all the inevitable difficulties of a path that we are sure will bring results.

The constant growth of results season after season is our goal to consistently reach high levels. I would like to thank all of you shareholders who support us for your great passion and love for Inter. With the best of hope we will be able to hug everyone together at San Siro.

MARCO BERTORELLO/AFP via Getty Images

Comments on the team’s “Corporate Performance”:

Photo by LARS BARON/POOL/AFP via Getty Images

Excerpted Section from Club President Zhang’s speech:

The economic crisis caused by the pandemic has seriously affected the football industry, accelerating the effects of some issues inside it.

The business model of football has remained unchanged for years, and is hindered by a clear asymmetry that is damaging economic sustainability.

Football clubs are bearing entrepreneurial risks and extremely high running costs, having no control over revenues in return, which are managed by third parties and governed by strict regulations.

The scenario is further exacerbated by the difficulties facing sponsor companies who invest in football, not to mention lost stadium revenues. Football governance on all levels is currently working to address issues that are of vital importance if we want to guarantee a sustainable future for the industry:

1. the modernization of the system with more power for clubs,

2. the evolution of international competitions In Italy,

The move to allow private equity funds to invest in Serie A – one that will help to boost the international appeal of the Serie A brand and allow for enhanced product management – is a key step towards the future.

Yet the primary focus of our efforts must be on building a closer relationship between football and new generations of fans. Football sorely needs innovation and internationalization and it’s vital that we recognize the need for new generations of fans to come through and ensure that the football product is offered to them in a form that suits them. We are competing for the attention of young people with video games, social media and streaming platforms – and it is less and less likely that the youth of today is going to choose to set aside a full 90 minutes to watch a game of football.

This is where the biggest growth opportunities lie.

We must diversify and innovate the football product, targeting younger audiences and international markets and creating new competition formats. We must make full use of the possibilities offered by new tech and different platforms.

Football clubs are increasingly becoming international brands who develop collaborations with brands in the fashion and lifestyle sectors. Infrastructure, including cutting-edge stadiums owned by the clubs themselves, also plays a crucial role in this. The objective is to enable our product to compete with the big global players in the entertainment industry. In the coming year, you will see some of these relevant ground-breaking projects coming out from Inter.

Thanks to the commitment and support of the Suning Group, the economic value and solidity of the club is continuing to grow even in this complex and uncertain time.

Last season, the Corporate Area – led by our CEO Alessandro Antonello – recorded significant results despite the devastating impact of the global pandemic, which had a serious effect on the second half of the year.

Our revenues are still stable compared with the previous year. This result is a proof of the efficacy of the club’s global vision and strategy.

The results also show the continuation of the extraordinary progress made since Suning took over, with Inter’s revenues more than double as a result of the successful business approach adopted.

Our brand – which has increased in value by over 235% in the last five years and is currently valued at €466 million – continues to grow in relevance around the world.

Our global fanbase keeps growing constantly, year over year. We are currently the ninth-biggest club in the world.

The growth is even more significant on our digital channels. The creation of innovative, geo-localised digital content has enabled us to reach 39 million followers, an increase of 16.2 million – or 72% – on the previous season. In the five-year period between 2016 and 2020, Inter has recorded the biggest growth in social media followers of any club in the world.

Our growth between 2016 and 2020 is illustrated in KPMG’s renowned Football Clubs Valuation Report 2020, which states that FC Internazionale’s Enterprise Value is the 14th-highest in Europe, while we are the third-ranked club in terms of growth between 2016 and 2020.

The value of our brand enables us to rise to new market challenges with confidence in our appeal and in the attractiveness of our brand.

The club’s consolidation efforts also include the renovation of its infrastructure.

Following the 2019 inauguration of the new club headquarters, 1908 Inter HQ, last season we began renovation work on the Suning Training Centre. The project will enable us to provide the Sports Area with a modern training centre in line with those of the world’s top clubs. Further investment is planned for the Suning Youth Centre, where a new residence and offices will join the college, which is already open.

Finally, as you know, we are working with AC Milan to build a new stadium for Milan, along with a multifunctional complex occupying the San Siro area.

Photo by Blom UK via Getty Images

Main Points about Financial Results

Photo by Pier Marco Tacca - Inter via Getty Images

Quotes taken from the corresponding financial summary article on Inter’s official website:

• “The financial year saw economic and financial streamlining measures implemented, with a particular focus on monitoring costs and carefully managing working capital, investment and liquidity, which had already been strengthened as a result of the financing operation concluded in December 2017”
• “In the first half of the year, the club generated new revenues and profitability streams, in accordance with the club’s business and development plan”
• “However, as of March 2020, the club’s performance was affected by the global COVID19 pandemic and the subsequent measures”
• “These measures meant that matches were played behind closed doors, resulting in the elimination of match-day revenues as well as the need to refund any affected match-day tickets and a proportion of season tickets”
• “These factors were only partly mitigated by insurance coverage”

The financial year saw:

• losses of €102.4 million
• a drop in revenues of around €45 million to €372.4 million
• EBITDA of €14.5 million (EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization” and “can be seen as a proxy for cash flow”)

Photo by Emilio Andreoli/Getty Images

• The extension of sporting activities until 31 August 2020, past the end of the balance sheet (30 June 2020), resulted in the deferral of revenues from TV rights and sponsorship to the 2020/21 financial year, for a total of around €51 million

Net of these deferred revenues:

• EBITDA stands at €46 million (compared with €105.2 million in the previous year) as a result of the investment made by the club to increase the competitiveness of the team on the pitch, coupled with the non-renewal of a number of sponsorship agreements
• Losses would drop to €70.7 million
• club revenues would stand at €423.7 million — a 2% increase on the €417.1 million recorded the previous season, confirming the consolidation of a figure that has more than doubled since 2016, the year Suning arrived at the club

“Our revenue for the 2019/20 financial year – net of the deferral of revenues to the current season – is stable, showing that we are continuing to move in the right direction. Last season also saw further growth in our enterprise value, brand value, digital performance and global fan numbers.” — Corporate Area C.E.O. Alessandro Antonello

Figures about Inter’s Supporters and Global Brand Growth:

• “The Inter brand has again been confirmed as one of the most valuable football brands in the world (€466 million, 14th position), having risen by 15 positions since 2016 thanks to growth of over 235% in that five-year period”
• “Furthermore, according to Sportspro, Inter is ranked 20th in its rundown of the most marketable sports brands in the world and comes in seventh position in the specific ranking for football clubs”
• “The brand’s content production strategy – which aims to deliver innovative, geo-localised content to the new generations – has led to a significant increase in the number of followers across the club’s various digital channels, with these rising by 72% from the 2018/19 season, to 38.8 million”
• “According to KPMG’s Football Clubs Valuation Report 2020, these figures mean that Inter are the top club in Europe in terms of the percentage increase in its follower numbers.”
• “The overall number of Inter fans around the world has also increased to 428 million, up by 11% compared with 2019, meaning Inter has the ninth-biggest fanbase in the world”

“For the fifth season in a row, the support afforded to the team by the Inter fans was unparalleled in Italy”:

• “Almost 800,000 spectators attended our home matches, just 12 of which were played with fans in the stadium. This equates to an average of 65,800 fans per game, the highest average attendance in Serie A for the 2019/20 season, up 7% on the previous campaign”
• “The two biggest matches of the season, against Juventus and Barcelona, generated all-time gate receipt records for Serie A (€6.6 million) and for a match played in Italy (€7.9 million) respectively”

Photo by Pier Marco Tacca/Getty Images

Investment in Infrastructure:

• “Over the course of the 2019/20 season, the new Club House at the Suning Training Centre was completed, while work began at the Suning Youth Centre, which is home to Inter College – a school for the young players based there – and a residence”
• “The most significant infrastructure project currently planned is the new San Siro district, a €1.2 billion investment to build a modern, innovative and sustainable stadium and revitalize the surrounding area to create a thriving hub open all year round”

Photo by Nicolò Campo/LightRocket via Getty Images

Photo by Nicolò Campo/LightRocket via Getty Images

More Details on Suning’s Investments and the Transfer Market

The following points are taken from further analysis of the club’s financial statements in two articles by Italian news outlet Calcio e Finanza via Sempre Inter.

Photo by Claudio Villa - Inter/FC Internazionale via Getty Images

Transfer Market Finances in 2019/20 Specifically:

Photo by Johnny Fidelin/Icon Sport via Getty Images

Transfer market total of €61.5 million in capital gains:

• €47.1 million of that capital gain total coming from Mauro Icardi’s €49 million transfer to Paris Saint-Germain
• The €47.1 million capital gain for Icardi is a new record for Inter
• Inter also recorded small capital gains from the sales of George Puscas to Reading and Yann Karamoh to Parma, which amounted to €6.9 million and €3.4 million respectively
• Among other transfer revenues, Inter also received €5.5 million from Bayern Munich for the loan of Ivan Perisic

Photo by Claudio Villa - Inter/FC Internazionale via Getty Images

Total of €217.3 million spent on incoming transfers:

• Romelu Lukaku (Manchester United) — €74.1 million (discounted value €67.2 million, €6 million was agents’ compensation)
• Achraf Hakimi (Real Madrid) — €43 million (discounted value €40.5 million)
• Nicolò Barella (Cagliari) — €40.5 million (discounted value €40.05 million)
• Christian Eriksen (Tottenham) — €27.5 million (discounted value €26.998 million, €7.5 million was agents’ fees)
• Ionut Radu (Genoa) — €10.6 million (discounted value €10.55 million)
• Lucien Agoume (Sochaux) — €4.5 million

Moreover, the financial statements confirm what it cost Inter to terminate the contracts of Kwadwo Asamoah and Andrea Romano as well as the money paid to both Diego Godin and Samuele Longo when they left the club. Inter paid Godin €2.1 million, Asamoah €557,000, Longo €538,000 and Romano €243,000.

Suning’s Total Investment of €641 million since 2016:

Photo by Claudio Villa - FC Internazionale via Getty Images

Since the Chinese e-commerce giants Suning bought the club from Indonesian tycoon Erick Thohir in the summer of 2016:

• Total investment of €641 million into Inter
• Initial increase of the club’s capital by €142 million
• Continued financing through a series of shareholders loans, the first of which was worth €217 million in 2016/17, followed by another loan of €119 million in 2017/18
• Of that €336 million loan total, €215 million was converted into capital in the last three years, €70 million of which was in the 2019/20 financial year
• Inter currently have a debt to Suning of roughly €129 million
• The loans have also cost Inter in terms of financial charges relating to interest of around €50 million
• Over the last three seasons, revenue guaranteed by sponsorships with Suning exceeded €163 million
• Suning’s revenues in the four seasons they have been in charge represented 11% of Inter’s turnover, including capital gains. That percentage fell from 18% in 2016/17 to 8% in the season 2019/20
• The total investment, net of any interest and payments relating to loans, stands at €590 million

Photo by Pier Marco Tacca - Inter/FC Internazionale via Getty Images