It’s not a typical scenario in the world of professional sports team ownership, but Inter Milan, the champion football club out of Italy, is being seized by investment company Oaktree because its previous owners, Chinese holding company Suning, itself owned in part by billionaire Zhang Jindong, defaulted on a three-year loan.
Oaktree announced the unusual move of having “assumed ownership” of Inter Milan after a period of public jousting between Oaktree and Suning over ownership of the team. Zhang’s son, Steven Zhang, who was appointed president of the club, said the move prevented good faith attempts to “find an amicable solution” and that the company’s “behavior now poses potential risks to the club that could seriously jeopardize its stability.”
Photo by Claudio Villa – Inter/FC Internazionale via Getty Images
Weeks ago, Suning had attempted to refinance its loan through another company, but Oaktree complicated the process and prevented the refinancing from happening.
An Oaktree source told FT that Suning had “plenty of time” to refinance the loan before it expired on May 21 and that Oaktree took steps to seize ownership of the team despite never having owned such an asset before “to protect our investment.” The loan was taken out in the first place as the team’s finances were shaken by the COVID-19 pandemic, and despite its recent championship success the terms of the loan were evidently too steep even for its billionaire owners to keep up with.
What happens now? Despite being new to sports team ownership, The Oaktree source says it’s “in no rush to sell the club” and that they’re “planning to invest time and effort” to maximize the value of their somewhat unexpected investment. The source went on:
“There’s an opportunity at the board and outside the board to connect with the community, the institutions, and the companies around Milan.”
The seizure comes as Suning has been facing myriad other financial challenges in the last few years, thanks in large part to both the pandemic and a property crisis in China.
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