The keys to understanding the new investigation on Juventus on the ‘false exchanges’ of players and tax fraud

“False exchanges” of players at prices judged excessive as an accounting trick to ensure financial balance sheets. The open investigation against Juventus is the occasion for Italian football to question an all too common practice, compared to financial doping.

Why an investigation?

Juventus is the subject of an investigation into its recent signings and the way in which the financial results were communicated, between 2019 and 2021.

The club with 36 Scudetti, which is publicly traded, could have offered false information to investors, creating invoices for non-existent transactions, according to the prosecution.

Researchers are studying a total of 282 million euros ($ 319 million) of capital gains, according to the media.

Several leaders, including president Andrea Agnelli, are investigated and the club’s offices were searched over the weekend.

“The club is collaborating with the investigators and is convinced that it can clarify the issues in question,” said John Elkann, head of the Agnelli family holding company, which controls Juventus, on Tuesday.

Juventus is also the subject of another investigation into doubtful signings, launched in October by the federation.

What are ‘fake exchanges’?

At the center of this investigation is a practice -legal- generalized for several years: “false exchanges”, cross-selling of players between two clubs, with little or no money paid.

A clear example? The simultaneous signings of Arthur and Miralem Pjanic between FC Barcelona and Juventus in 2020. Despite the announced prices (72 million euros for the first, 60 for the second), little money circulated. But the effect on the clubs’ accounts was immediate, thanks to the notion of capital gains.

In a transfer, the cost of buying a player is broken down as amortization over the duration of his contract. But an eventual capital gain is immediately added to the accounts.

With Pjanic, Juventus achieved a capital gain of 43 million, the second largest in its history.

Juventus, whose salary mass grew enormously with the arrival of Cristiano Ronaldo in 2018, multiplied these types of operations.

Another example occurred in early 2021. Marley Ake signed for Juventus, for eight million euros, and Franco Tongya arrived at Marseille. The Turin club posted a capital gain of 7.8 million euros.

What risk does Juventus run?

Many experts highlight the abuses of this system of “false exchanges”, with sale prices for players that do not correspond to their status, allowing significant capital gains without the entry of money.

“It is financial doping, it alters market balances and distorts competitions,” lawyer Salvatore Scarfone said Wednesday in Le Corriere dello Sport.

“The difficulty is always to prove the fraudulent intention in the increase of the valuation,” he added.

With regard to Juventus, the investigation relies mainly on wiretapping, according to the press.

Beyond the legal field, for the uncertain moment, the collected elements will be sent to the federation, which can sanction a club that commits financial fraud in sport. Depending on the severity, it can range from a fine to a suspension from the championship, to a withdrawal of points.

Chievo Verona lost three points in 2018 for having made fictitious operations that allowed them to balance their accounts to enter the championship. In 2008 Inter and Milan received fines for fraudulent capital gains.

Change the rules?

This investigation involves one of the most important clubs in Italy, 15 years after the Calciopoli scandal that led to a relegation to second for having influenced the referees.

“We are aware of our inability to react on this somewhat slippery terrain, but we know that we can, with some precautions, adopt measures that can limit the impact of the phenomenon”, declared at the end of October the president of the Italian Federation Gabriele Gravina, after the start of the investigation.

The federation considers not taking into account capital gains when there is no cash flow in transfers, according to the site Football and Finance. (D)