Juventus Points Deduction Could Herald A New Dawn

As Juventus reeled from a 15-point deduction by the Italian Football Federation (FIGC), following a probe into the club’s past transfer dealings, its CEO extended an olive branch to rivals.

“I must also thank the supporters of other clubs, as well as people who’ve been working in [soccer] for a long time and famous faces on TV and on social media who have shown that they understand the unfairness and exaggerated nature of these decisions,” chief executive officer Maurizio Scanavino said.

“I think they have understood how the FIGC justice system can behave in an unfair way. This is worrying because it’s happened to Juventus now, but it could happen to another club in the future.”

In normal circumstances, leaders of soccer clubs don’t tend to address opposition fanbases and it is even more unusual for one under fire, as Juventus is, to do so.

After all, in the short-term, there were a host of clubs, from Lazio and Roma to Atalanta and Udinese who benefit from Juventus plummeting down the table.

But, perhaps, those who have sent kind words the Bianconeri’s way realize just how big the implications of this decision could be.

The FIGC said it had docked points for “financial irregularities” and “false accounting” based on allegations the club deliberately inflated player values during transfers to boost its balance sheet.

The reason this has connotations beyond Turin or Italy is it’s a ruling that sees a governing body weigh in on the previously subjective domain of player valuation, which, of course, is one of the soccer administrator’s greatest tools.

At this stage, it’s just one decision, but the question is why would it stop there?

If clubs can’t be trusted to accurately value players the power would have to be transferred somewhere else.

This is hugely significant because for clubs having control over a player’s valuation was only just useful in earning an extra couple of million dollars when selling to a rival, it was also a great way of making sure you kept the club in the black when the financial end-of-year rolled around.

You see, soccer teams around the world have developed an accountancy practice that enables them to log the benefits of the transfer market on the balance sheet and dilute its downsides.

The way it works is that when a player is bought, for accountancy purposes, the fee the club pays is amortized across the length of their contract.

So when Juventus signed Cristiano Ronaldo back in 2018 for $127 million from Real Madrid, the fee was spread across the length of his five-year contract meaning it only had to book a cost of $25 million.

However, three years later when he was sold for $18 million to Manchester United-Juve was able to record the whole fee immediately as a profit.

This method is widely used and accepted, but there have been occasions when eyebrows were raised at agreements between clubs that appeared to look better on the balance sheet than on the soccer field.

The Pjanic and Arthur transfer curse

The peak example of an accountancy-friendly came in the summer of 2020 when Juventus and Barcelona acquired midfielders from each other.

Brazilian Arthur Melo was bought by Juventus for $78 million while Barcelona signed Miralem Pjanic from Juventus for $65 million.

The only cash changing hands was the $13 million difference, but for accountancy purposes, the full whack could be booked.

It didn’t escape many people’s attention that, once the outgoing fee was amortized, the deal quite neatly earned Barcelona the $54 million profit it needed to comply with financial fair play regulations.

The Juventus balance sheet was also richly rewarded by the Pjanic/Arthur deal, which showed how the biggest sides could make transfer decisions that benefited each other.

Of course three years later, with the benefit of hindsight, the transfer looks a lot less savvy.

Barcelona is drowning in debt, selling off assets left and right, while Juventus has been hit with a points penalty and faces further criminal investigations.

But it would be wrong to portray this as an issue that is isolated to a few clubs, in the FIGC probe alone there were many more clubs involved and other deals under the microscope.

It has been reported that Serie A league leaders Napoli’s purchase of marksman Victor Osimhen from French side Lille is also being scrutinized for four players included in the $76 million deal who were valued at around $21 million. Three of whom never played for the Ligue 1 side and are now plying their trade at a considerably lower level.

The trouble for soccer is that it doesn’t do wide-reaching regulations. Global governing body FIFA has been trying to create some form of uniformity in the past few years but compared to American sports like NFL or basketball soccer’s approach is light-touch in the extreme.

It is the weakness of the grasp the associations nominally in charge of running the game have which emboldened the world’s most powerful clubs to attempt to become the regulator by setting up a European Super League a couple of years back.

Given there is a criminal case being readied by Italian prosecutors relating to the club’s listing on the Italian Stock Exchange it could be that the push for greater standardization comes from outside the game.

A landmark ruling in Italy could change the way transfers are governed in one of soccer’s powerhouse nations and who knows what other regulators will be taking a look at clubs listed on stock markets around the world for player trading-related profits now.

Source: https://www.forbes.com/sites/zakgarnerpurkis/2023/01/29/juventus-points-deduction-could-herald-a-new-dawn/