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Inter Milan Transfer Formula” Comes With Some Big Risks

Geoffrey-KondogbiaNo team in Italy has been as active or aggressive in the transfer market this summer than the Nerazzurri. The club has done a tremendous job in strengthening the team with incredible dynamism in a unique and innovative way that Italian media outlet Corriere Dello Sport has dubbed “The Inter Formula”.

Sporting Director Piero Ausilo and General Director Marco Fassone are said to have invented the plan last summer, and the Corriere claimed the idea would be remembered as theirs in “100 years from now.”

The plan in basic terms is that the Nerazzurri take a player on loan (often for two years) and then pay in 12 month or 24 month installments. Spreading the payment does not impact their budget all in one hit and also helps them meet the restrictions imposed by Financial Fair Play (FFP). This system allows them to purchase a number of players (perhaps out of their initial price range) and helps them in bypassing UEFA’s sanctions by making what the paper called “intelligent payments.”

Take for example the signing of Atletico Madrid’s Brazilian centre-back Miranda, who actually is on a two year loan also. This deal according the Corriere dello Sport is worth €12.5 million and a further €2 million in bonuses that will be spread over the two years. Therefore, Inter will be paying for Shaqiri this summer (which they already have) and then Miranda will be paid off over two years. This may take some financial juggling but is nothing that cannot be controlled by some astute accounting.

This was the tactic used by Inter in January in the signing of Xherdan Shaqiri from Bayern Munich. The price was a free loan for six months followed by a compulsory obligation to purchase that will cost €15 million. This price could have risen by €1 million for two extra factors: if Inter reach the Champions League (which they didn’t) or if Shaqiri makes a set number of appearances (which he probably didn’t).

After having Shaqiri for free for six months, Inter are now trying to flip him to another club so that they can make a quick profit on the €15 million they just paid Bayern for him.

Inter haven’t stopped there though, a signed Barcelona’s Martin Montoya on a loan deal with installed payments of €8 million.

These “intelligent payments” have also allowed them to use the bulk of their transfer funds on a marquee signing, while adding quality around midfielder Geoffrey Kondogbia, who arrived from Monaco in a move that surprised most of Europe and he became Inter’s third most expensive signing ever in a deal reported to be around €40 million

If this system is successful then why would clubs not copy this seemingly ingenious plan? It does take some expert negotiating skills as on the outset, the selling clubs do seem to be being extremely generous in the way they are allowing Inter to operate. This again shows the skill of Fassone and Ausilio as they target players who will be allowed to leave on these deals.

But Inter are taking a massive gamble with these deals as they are being paid in installments, and it is clear that the Nerazzurri are banking on qualifying for the Champions League to pay off these sums. If Inter fail to finish in the top three this season, the financial implications will be felt for years. Do they have a plan in place if they don’t?

The Inter formula for better or for worse will seemingly go down in history whatever the answer to the equation becomes. If Inter are in the Champions League next season then the ways that teams approach the transfer windows could be changed as a result.