On Friday, Juventus were found guilty of transfer irregularities and docked 15 points by the Italian Football Association's sporting tribunal, a decision that pushes them from third place down to midtable. Eleven current or former Juventus directors were also banned, including former president Andrea Agnelli (two years), former chief football officer Fabio Paratici, who is now at Tottenham Hotspur (2½ years) and sporting director Federico Cherubini (16 months).
It's a massive body blow for the Turin club, so here is a Q&A to make sense of it.
Q: What exactly were they found guilty of doing?
A: Essentially engineering transfers, usually swap deals, where little or no money changed hands but the club drew an accounting benefit (on paper).
It's the magic of amortisation. If you offload a player to another club for, say, a 10 million fee, you get to record that 10 million as revenue. But if you spend 10 million to acquire a player and he signs, say, a five-year deal, you can spread that 10 million evenly across the life of the contract.
Q: So if I acquire a guy for 10 million and offload another for 10 million, I've magically made a profit of 8 million? Ten million in and two million out, because I'm spreading the 10 million cost over five years?
A: On paper, yes. In real life, no. And, of course, you still have to account for 2 million every year for the life of the contract. But in the short term, in your scenario, you can show a capital gain of 8 million.
This isn't illegal and it's how pretty much every single club in Europe does their accounting. The problem arises when two clubs engineer a swap deal and inflate the value of the players involved. Officially, they're two separate deals, but in practice, they mirror each other and because no cash is changing hands, you can put whatever valuation you like on the player.
So in the example above, if you acquire a player for 100 million and move a player on to the same club for 100 million then -- presto! -- you've made 80 million (and so has the other club).
Q: Weren't Juventus already charged with this and cleared?
A: Yes, they and eight other clubs (Genoa, Sampdoria, Empoli, Pro Vercelli, Novara, Pescara, Parma and Pisa) were charged and ultimately cleared. They successfully argued that nobody can put an objective valuation on a player and, therefore, nobody can say a transfer fee -- or, more precisely, the valuation you put on a player in a swap -- is inflated. In other words, a player is worth what the market will play, and the court agreed with them.
Q: So why was the case reopened? It sounds like double jeopardy to me, being tried twice for the same crime...
A: Prosecutors successfully agreed to reopen the case because they say new evidence had emerged. That evidence comes from a separate, criminal investigation known as Prisma, and the allegation is that not only did they create these fraudulent swap deals at inflated valuations, but it was part of a systematic attempt to cook the books. Oh, and according to wiretaps and written evidence (including hand-written notes), they knew what they were doing was not above board.
