US Investment Firm Oaktree Capital Management Takes Over Inter Milan in Serie A

US Investment Firm Oaktree Capital Management Takes Over Inter Milan in Serie A

Inter Milan was crowned Serie A champions, taken over by US firm Oaktree Capital. US investors show growing interest in European football clubs.

Oaktree Capital Management

Internazionale Milano, famously known as Inter Milan, celebrated their victory as champions of Serie A, Italy’s top football league, on April 22.

However, the club made headlines again a month later when US investment firm Oaktree Capital Management took over.

This acquisition marks a significant trend of American investment in European football, with Inter Milan now joining the ranks of other Serie A clubs under US ownership.

Inter Milan’s takeover by Oaktree is part of a broader pattern of US investors flocking to European football.

Inter is the seventh Serie A club to come under American ownership, and the trend extends across the continent.

Nine out of twenty English Premier League clubs are now owned by American investors.

This wave of investment is driven primarily by financial opportunities.

The primary driver behind the influx of US investments in European football is the potential for significant financial returns.

For instance, Inter Milan was acquired after Oaktree assumed ownership because the Chinese owner, Suning, had missed the repayment deadline for a €395 million loan.

Most US investments in European football involve direct acquisitions of shares rather than loans.

Notable examples include the purchase of Chelsea in England, Atletico Madrid in Spain, AC Milan in Italy, and Wrexham in Wales.

The growing value of elite football clubs has attracted American investors aiming to buy now, hold for a few years, and sell for a profit.

The sale of Chelsea exemplifies this trend.

The club was bought for £140 million in 2003 and sold for £4.25 billion in 2022 to American businessman Todd Boehly and his Clearlake Capital consortium.

While the financial allure is solid, American investors face challenges in European football.

Significant clubs like Manchester United, Liverpool, Arsenal, and Tottenham Hotspur have made financial losses in recent seasons.

Despite the Premier League’s high revenue, the financial health of its teams could be better, with clubs relying on cash injections from their owners.

However, there is potential for profit if costs are controlled.

Many American investors, like Boehly, bring experience from other sports investments, which can help lower costs through shared resources and ideas.

Nonetheless, European clubs must keep up with spending to remain competitive, unlike the closed leagues in US sports, which reduce the risk of relegation.

US investors also face cultural differences and fan expectations.

European sports culture is less commercialized than in the US, and fans can resist commodification.

This cultural clash can affect match day ticket sales, sponsorship, and broadcasting income.

For example, fan protests in Germany forced the German Football League to abandon plans to sell a stake in its media rights business to a private equity firm.

Despite the challenges, American investors are finding bargains in European football. Several clubs have entered administration, presenting opportunities for acquisitions at lower prices than US counterparts.

This is especially true in women’s football, where clubs like Olympique Lyonnais Féminin are valued much lower than their US counterparts.

The potential for profit in European football remains high, attracting continued interest from American investors.

If managed well, the industry can be resilient to economic changes, making it an appealing investment prospect.

As Inter Milan embarks on this new chapter under Oaktree Capital Management, the trend of US investments in European football shows no signs of slowing down, promising an exciting future for the sport.

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