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?

Aberdeen stadium plan can move them a little closer to the Old Firm

ABERDEEN FOOTBALL CLUB may be in third place in the Scottish Premiership this season, but they are still way behind the Glasgow duo, Celtic and Rangers. After a disappointing campaign in 2021-22, in which Aberdeen finished 10th, their lowest position in a decade, the Dons have regained their place as Scotland’s third club, but their finances reveal just how far behind the big two they are.

Aberdeen’s turnover in 2021-22 totalled £ 13.9 million, a 25% increase on 2020-21. Their pre-tax loss was £ 2.2 million, marginally less than the previous season, largely because their wage bill was up by 10% to £ 10.3 million, representing 75% of income, and other costs climbed by almost £ 2 million to £ 7.6 million. In 2020-21, the wage-to-income ratio was 85%. While the wage bill was more than high enough for the club, it is a fraction of the amount Celtic and Rangers pay their players. Celtic’s salaries totalled £ 58.9 million while Rangers’ were just four million lower than their fierce rivals.

Aberdeen’s income showed a 35% increase in commercial activity, from £ 5.4 million to £ 7.3 million, the biggest contributor – 52.5% – to the club’s turnover. Matchday revenues totalled £ 3 million and were up from £ 2 million, while broadcasting amounted to £ 3.6 million, slightly down on the previous year.

The club has recognised the need to develop a smarter approach in the transfer market. In 2021-22, their profit from player sales was just £ 1 million, barely a third of the profit generated a year earlier. However, this did not include the summer sales of Calvin Ramsey to Liverpool (£ 4.2 million) and Lewis Ferguson to Bologna (£ 3.1 million), which will appear in the 2022-23 statement. Aberdeen also want to focus more on developing their own talent, creating a model similar to some of Europe’s top player traders.

Aberdeen chairman, Dave Cormack, believes the 2021-22 financials demonstrate the club is bouncing back after the pandemic. However, the operating loss totalled £ 5.29 million and net debt stands at £ 3.6 million. There is positive momentum, though, and the club sold record numbers of season tickets for 2022-23.

A new stadium is being planned, which could elevate Aberdeen to a new level. The scheme, which may be part of a significant shoreline regeneration, would cost around £ 80 million and have a capacity of between 16,000 and 20,000. This is not the first concept to be tabled, the club had previously received approval for a ground at Kingsford, but the beach stadium – promoted by the local authority – could have far more financial impact. Cormack said that the most successful regeneration projects always have a centrepiece and the new football arena will provide just that.

Research has suggested the project would provide 260 jobs and £ 6 million in salaries to the community as well as £ 14.3 million of gross value added. Over 50 years, the new stadium could add £ 1 billion into the local economy. Furthermore, Aberdeen envisage that visitors to the area will increase by some 300,000 from the current level of 450,000 per year. Planners have used the redevelopment of Perth that accompanied the construction of St. Johnstone’s McDiarmid Park as an example of what can be achieved.

Solar panels are expected to dominate Aberdeen’s stadium roof and the planners are hoping for a net zero outcome. The first minister of Scotland has aspirations for Aberdeen to become the first net zero city in Europe.

However, no major development comes without hurdles and already, the local council have ruled out public cash being used. This has changed the mood and some are now revisiting the idea of a move to Kingsford. Others believe the council has let the club down, especially as they made a proposal for Aberdeen to remain in the city in the first place.

Aberdeen will be hoping the club returns to European football in 2023-24 after missing out in 2022. They had eight consecutive campaigns in the Europa League between 2014-15 and 2021-22. At the moment, that looks very possible, but longer term, a new stadium can help the Dons close the gap on the Glasgow giants.