What happened?
Italian tax police raided Juventus offices in Turin and Milan on 26 November. According to the Italian newspaper La Gazzetta dello Sport, the leaders of the Turin club are accused of falsifying income statements for 2018-2021.
The Turin prosecutor's office opened a case following an investigation by the Italian Companies and Exchanges Commission (Consob) and a report by the Professional Football Club Oversight Commission (Covisoc).
In particular, the supervisory authorities were interested in the deal to exchange Miralem Pjanic for the Brazilian Arthur from Barcelona. At the same time, Turintsy paid € 80 million for Artur, and Pjanic paid € 70 million. But in the reports, both clubs reported a profit of € 60 million. And there are more than one such transfers in business. And doubts concern not only the assessment of the players, but also the implementation of these transactions in reality.
Juventus executives under investigation Football Suspects include President Andrea Agnelli, Vice President Pavel Nedved, former sports director Fabio Paratici, who now holds a similar position at Tottenham London, and a number of former and current employees.
Juventus have confirmed that the Turin prosecutor's office has opened an investigation into the transfer revenue for 2019, 2020 and 2021. "Possible violations in financial reporting under the article on billing for non-existent transactions are being studied," the statement says. The club denies guilt.
How did it all start?
In 2015, Juventus reached the Champions League final for the first time in 12 years, which they have not won since 1996. On the way of the Italian club to the coveted title stood Barcelona (1: 3), led by Leonel Messi. Two years later, Juventus reached the final of the leading European competition again. This time the club could not oppose anything to Real Madrid with Cristiano Ronaldo (1: 4).
Turin President Andre Agnelli decided that without a superstar he would not win the long-awaited trophy. Therefore, in 2018, he turned a sensational transfer: he took Ronaldo from Real Madrid for € 117 million (hereinafter, the amount of transfers - according to Transfermarkt).
Everything went perfectly in the beginning. The growth of subscribers in club social networks amounted to 5 million subscribers in the first day after the transition to Cristiano. Over three years - 63 million people (up to 113 million).
It's the same with commerce. Sales of T-shirts from Turin have doubled to 1 million per season. The move of the world's most popular player pushed through an increase in contracts with Juventus' title sponsor Jeep (from € 17 to 42 million per year) and technical partner Adidas (from € 23 to 51 million). In Ronaldo's first season in Turin, revenue increased by € 58 million, but the club ended the year with even greater losses.
The arrival of Ronaldo also affected the value of Juventus shares, which have been steadily falling since entering the stock exchange in 2001 and for a long time fluctuated at the level of € 0.20-0.30 per share, while in 2001 they started at € 1.19 ... Growth began only in August 2017, and a sharp jump occurred against the background of the signing of Ronaldo in the summer of 2018 - at the peak they reached € 1.45.
Against this background, Juventus sold € 175 million worth of bonds on the Milan stock exchange. And Andrea Agnelli made a statement to the shareholders that now Juventus will begin global expansion, like Manchester United, Real Madrid and Barcelona.
A month after this statement, the football season in the world was interrupted, and the world was quarantined due to the pandemic. This hit Juventus' budget significantly. And Ronaldo turned from a driving force into a stone that pulled the Turin people to the bottom.
Juventus entered the pandemic with the obligation of annual payments to Real Madrid for the transfer of the Portuguese in the amount of € 29 million. The striker's salary was € 31 million, and Juventus transferred another € 26 million to the tax authorities. For three years, Juventus spent € 277 million on the Portuguese, taking into account all expenses.
Investigators became interested in the details of Ronaldo's contract with Juventus Football As a result, Turin ended the financial year (2019/20) with a loss of € 89.7 million, while a year earlier it was € 39.9 million. But even with the resumption of the tournaments " Juventus "continued to get bogged down in the quagmire. The club ended the next financial year with a record loss among the leading European clubs - € 209 million.
“Economic performance is expected to improve significantly in the 2022/23 season,” the club said in a statement, which had by now parted ways with Ronaldo.
In Italy, many associate financial problems only with Ronaldo. However, the last season before the arrival of the Portuguese was also unprofitable for the Turin people (- € 19.2 million). At the same time, since 2013, Juventus has made profit only three times - 2014-2015 (€ 2.3 million), 2015-2016 (€ 4.1 million), 2016-2017 (€ 42.6 million).Over the past five years, the club has run a number of controversial transfers. For example, he spent € 122 million on Argentine striker Gonzalo Higuain (105 matches and 48 goals), who was remembered for only one season, € 87 million on Brazilian Douglas Costa (42 games), Welsh midfielder Aaron Ramsey (49 games and 5 goals) - € 44 million, Croatian winger Marko Pjatsu (14 matches) - € 32 million.
For comparison: Ronaldo scored 114 goals in 134 meetings, i.e. 0.85 per game - this is the third indicator in the history of the club among football players with at least 30 matches in the asset (only Ferenc Hirser and Pietro Pastore who played in the 1920s) ) and the best among players with 100 matches or more.
What is known from the investigation
In 2021, an operation was carried out under the code name "Prism". Former and current Juventus employees were put on wiretapping in the summer of 2021, among them were Agnelli, Nedved, CFO Stefano Cerrato and his predecessor Stefano Bertola, as well as former employees - financial manager Marco Re and lawyer Cesare Gabbasio.
Covisoc was interested in the rapid growth of Juventus' revenues in the transition market - it jumped from € 330.8 million in 2018 to € 508.4 million in 2020. The club was suspected of falsifying accounts and artificially increasing income.
For example, in 2021, residents of Turin bought Nicolo Rovella from Genoa for € 18 million, and then sold to the Genoese club Manolo Portanov for € 10 million and Elia Petrelli for € 8 million. That is, in fact, there was an exchange of players between the clubs, but in the column "Profit" from "Juventus" appeared € 18 million.
Economist Kieran O'Connor, who runs the popular Twitter blog Swiss Ramble, explained how this accounting trick works. When a club buys a player, the transfer amount is divided into several tranches in accordance with the duration of the contract - so it does not put pressure on the budget. But if a club sells a player, then on paper all the profits from the sale are recorded by the accounting department at a time.
According to La Gazzetta dello Sport, under this scheme, Juventus made 42 transactions in three years, which interested the investigators. The loudest of them was Miralem Pjanic's transfer to Barcelona in exchange for Artur.
These tricks are designed to hide the club's real losses due to the pandemic and spending on Cristiano Ronaldo, who allegedly received a "gray" salary during the lockdown. La Gazzetta dello Sport reported that during the wiretapping of the Juventus bosses, investigators heard about some additional payments to Cristiano, which are not specified in his contract, although the other players, on the contrary, agreed to lower salaries.
As a result of these manipulations, Juventus not only bypassed UEFA's financial fair play restrictions, but also traded shares, providing them with fictitious accounts of the club's success. Therefore, Consob also launched its own case against the Turin people. The scandal immediately affected the stock market: the shares of Turin on the Milan stock exchange fell by 25.2%.
Juventus shares plummet 25% after management accusations of fraud
In addition to 42 suspicious Juventus transactions, another 24 transfers were targeted by other teams. In total, 18 clubs are involved in the case, and not only from Italy: Manchester City, Barcelona, Marseille, Lille, Inter, Napoli, Atalanta, Torino, Fiorentina and Roma.
What threatens Juventus?
In 2008, Inter, Milan and Chievo were already accused of a similar scheme - the teams were acquitted. In the Juventus case, everything is somewhat more complicated. If the prosecutor's office proves that the club conducted false bookkeeping, the Signora will face fines.
At the same time, the clubs are facing sports sanctions. According to article 31 of the Italian Football Federation's Code of Sports Justice, the provision of false, hidden or partial information in order to evade federal regulations in managerial and economic matters is punishable by a fine. But if the accounting department was falsified for the sake of a license to participate in the championship, then the punishment may be a temporary exclusion from the competition or a demotion.
The head of the Italian consumer protection association Marco Donzelli has already threatened to send Juventus to the second-strongest division. “We will file a complaint with the Antimonopoly Committee and the Federal Prosecutor’s Office asking to transfer Juventus to Serie B and strip the club of the last league titles won as a result of these potentially illegal operations,” he said.
Juventus threatened to be expelled from Serie A following allegations of fraud Football Juventus was already sent to the second division in 2006 as a result of a corruption scandal (Calciopoli), which also stripped the club of two championships. “It was worse only with Calciopoli,” La Repubblica quotes Juventus employees from Agnelli's entourage.
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