Inter Milan’s accidental owner

Did a bid for Everton tip a sprawling, international reinsurance and private investment business into chaos? That’s one of the many questions facing 777 Partners, the Miami-based firm that has been waiting for approval to buy the English football club since September last year.

It’s impossible to summarise all the twists and turns of this tale, as laid out in this richly reported deep dive into 777. So please, just take a few minutes to read it.

Beyond that, we look at how Inter Milan ended up in the hands of distressed debt fund Oaktree and explain why a new football regulator is unlikely to be delayed for long. Do read on — Josh Noble, sports editor

Oaktree bets on history repeating in Milan

An aggressive US investment firm. A Chinese owner struggling to meet debt payments. And an Italian football club steeped in history.

This week Inter Milan treated fans of football finance to a reboot of the 2018 saga in which Elliott Management became the owner of stadium roommates AC Milan.

A quick summary of the Inter situation. The club was acquired by Chinese electronics retailer Suning in 2016. When the pandemic ravaged Inter’s finances in 2021, the owners turned to Oaktree — a specialist in debt — to borrow €275mn. The three-year loan came with a 12 per cent interest payment, so when the debt came due for repayment this week, the figure had jumped to almost €400mn.

The Zhang family that controls Suning tried to refinance with Pimco, another big US debt investor. But Oaktree decided to exercise its right to seize the club instead, just weeks after it was crowned Serie A champion.

As the FT’s Lex column notes, the Inter story is just the latest sign of increased activity of debt investors in European football. Specialist funds have stepped in to offer expensive loans based on punchy valuations.

Elliott’s experience at Inter’s fierce rivals points to the potential for attractive returns from such a move. Elliott stepped in at AC Milan after its Chinese owner failed to pay interest on a €300mn acquisition loan. The fund installed its own management team, revamped the playing squad, and swiftly returned the club to the top of Serie A.

In 2022, it sold up in a €1.2bn deal with private equity firm RedBird Capital, but provided about half that sum in the form of vendor financing. Elliott’s return from the deal equated to around 15 per cent per annum of ownership, plus the ongoing interest payments of around 7 per cent from the vendor loan.

Meanwhile AC Milan has started making money, recording its first profits in over 20 years last season.

Los Angeles-based Oaktree had said previously it had no desire to own or run a professional football team — it has zero experience in the sector. The expectation was initially of a quick resale, but now there is talk of a boardroom shake-up.

“We are committed to the long-term success of the Nerazzurri and believe our ambitions for the club are united with those of its passionate fans in Italy and around the world,” Oaktree said this week.

With big debt, persistent losses, and a new stadium to build, Oaktree will have a lot to deal with if it decides to stick around in Milan. But it’s not hard to see why it might still be worth rolling the dice.

Football’s new regulator washed away, for now

Rishi Sunak’s suit jacket may have been the first causality of the British general election campaign, but England’s new independent football regulator was not far behind.

The bill to set up the new body will not have time to pass before the UK’s political establishment downs the tools of state and disperses for a month of being photographed in high-vis jackets and hard hats.

For the Premier League, it offers some respite. Chief executive Richard Masters has become increasingly vocal in his opposition to the bill, warning of the dangers of mission creep and the risk that a heavy-handed state could undermine the great advantages English football has built up over rival leagues over the past 30 years. Top tier clubs want to keep regulating themselves.

But the story does not end there. The Labour party has also said it wants to get involved in football, and supported the reforms that had been in motion. Those who oppose the Tories’ reluctant embrace of regulation are unlikely to find much comfort from a change of government. Indeed, the plans could well be tightened up rather than watered down.

That makes this week’s delay a mixed blessing for clubs further down the pyramid. The advent of a regulator would have increased the pressure on the Premier League to agree a new deal to send money down to the lower leagues quickly.

But some clubs outside the top flight have quietly been hoping that the baton would be passed to a more sympathetic Labour government.

Final Whistle

This week marked another important milestone in the rise and rise of Luke Littler, the teenage sensation that has taken the world of darts by storm.

On Thursday night, the 17-year old threw a nine-darter finish on his way to winning his first Premier League title over No. 1 ranked Luke Humphries. Watch it here.

“One thing I just want to say — to all the doubters, hello,” he said afterwards.