A messy end to a golden era for Juventus

IT’S ALWAYS a mystery why seemingly intelligent people continue to flirt with financial malpractice in this age of intense technological scrutiny. Even the most cunning criminals and canny operators are invariably found out by governing bodies, the law or accountants. This leaves you wondering how professional people can either be so stupid or careless, not to mention occasionally dishonest.

Juventus are in the spotlight again for suspicions over their financial reporting. It’s not the first time the club has been in trouble, their current era of success came after the so-called Calciopoli scandal which involved the illegal selection of favourable referees, among other breaches. Juve were stripped of their 2005 title and were relegated to Serie B.

Juve enjoyed a run of spectacular success from 2011-12 to 2020-21 which included nine scudettos and five Coppa Italia victories. They also reached two UEFA Champions finals in 2015 and 2017 in which they lost to Barcelona and Real Madrid respectively. Juventus were, supposedly, the only Italian club that could seriously challenge the Spanish giants and Bayern Munich, but they were well beaten in their two finals.

Under president Andrea Agnelli, Juve not only won trophies, they also became a more modern, forward-looking club, moving to a new stadium which they owned, giving them a competitive edge over their domestic rivals. They also grasped the marketing bug and relaunched their brand, including a controversial new corporate logo. In 2018, they thought they were sending a signal of intent to European football by signing Cristiano Ronaldo, but in truth, his arrival marked a gradual decline in their fortunes. If CR7 was supposed to be the catalyst for UEFA Champions League success, it didn’t work and he left in 2021 with Juventus’s team clearly past its best.

Agnelli and the rest of the board have resigned amid concerns over the club’s financial practices. Among the questions being asked are the valuations of players in some transfers, such as exchange deals, and the arrangements over player wages during the height of the pandemic. But after investigations by the public prosecutor’s office in Turin and Italian market regulator Consob, Juventus have had to change the way in which they accounted for player payments for the financial years ending June 2020 and June 2021. Players had agreed to waive part of their salaries because of Covid-19 and later agreed “loyalty” bonuses. Consob believes the club has yet to show the logic behind the fair value ascribed to players in transfers with other clubs. Agnelli and 15 others at the club have been investigated but the saga is likely to run for a while as it’s still early days.  As they all resigned, the club continued to deny any wrongdoing, but Agnelli admitted there was a lack of unity which undermined the management of Juventus. The club has, apparently, agreed to amend its accounts for 2021-22.

The pandemic was tough for Italy’s top clubs and in the past two seasons, Juventus have made pre-tax losses of € 460 million and has generated a deficit of over € 600 million in the past five years. At the same time, their wage bill in 2021-22 absorbed 85% of income and their net debt now totals more than € 150 million, a substantial amount but over € 200 million less than the 2020-21 season. In 2021-22, the club had to raise € 400 million from its shareholders, taking the total of fresh equity raised since 2019 to over € 700 million. Investors and the market are not impressed, however, and the stock price fell on the news of the resignations. In 2022, the Juventus share price has dropped by almost 40% and the club’s market value is now around € 700 million.

What will the future hold for Agnelli, whose family’s listed vehicle, Exor, is the majority owner of Juventus? His ambitions have been battered by a series of setbacks, notably the ill-fated European Super League project, which meant he had to step away from the European Club Association and UEFA.  As for Juventus, the current season has been troubled, from a poor start to the campaign to an early exit in the UEFA Champions League. And this new scandal really highlights the danger of flying too close to the sun. Icarus may have been Greek, but he has been soaring over the city of Turin for some time. The question is, how long will it take for Juventus to repair its reputation once more?

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