Here are goals and own goals from Juventus, Atalanta and Sassuolo with capital gains
What bizarre emerges from the investigation into the capital gains of football clubs in Serie A. The analysis by Stefano Feltri, director of the newspaper Domani
As expected, many readers reacted badly (many even well) to my piece in which I explained that the Juventus scandal has such proportions as to legitimize not only a boycott of the team , but of the entire Serie A which is completely distorted by the accounting alchemies of the managers resigned.
If Italian football were a serious sport, Juventus should at least have their 2018/2019 scudetto revoked, when they played the championship with a balance sheet with negative equity (liabilities greater than assets), even if the reported accounts did not reveal this.
Before going into the matter, I would like to clarify two questions of method. First: I'm not a magistrate, the evaluation of the criminal relevance of the financial behavior reconstructed by the investigations is up to the judges.
However, the investigations clarify many aspects that were already there for all to see – capital gains, player swaps, absurd operations – and we know how and why the Juventus managers organized them, thanks to documents and wiretaps acquired by investigators and prosecutors.
We therefore have every right to form an opinion on what happened and on moral, sporting and corporate responsibilities. On the criminal ones, on the other hand, only the opinion of the judges counts.
Second premise: honest competition should be in everyone's interest, including the Juventus fans. Instead, from the papers of the Turin prosecutor's investigation it emerges that many of Juventus' alleged opponents are in reality accounting branches of the Elkann-Agnelli team.
And how credible is a championship in which Juventus actually decides its own squad but also that of many of its competitors?
VOMIT
Third premise: everyone does this, the capital gains inflate any balance sheet of the Serie A teams. True, but here I leave the answer to the prosecutors who, in the notice of conclusion of the investigation, make this necessary clarification: «The capital gains (understood as the difference between the net book value and the disposal value, i.e. the sale of the player) are obviously not illegal in themselves, on the contrary they constitute, from a physiological point of view, the reward for the player's growth and the opportunity to achieve monetary income».
In the case of Juventus, however, "the capital gains are planned ab initio in their total amount" and are therefore "obligatory capital gains": in practice, first you see how many millions are missing to reach a desired budget target, which hides part of the losses, and then they build themselves at the table with the clubs willing to do it fictitious operations that bring the numbers back, but which disregard the real value of the player object of the agreements.
On 22 July 2021, in an intercepted conversation, the sporting director of Juventus said to Stefano Bertola, the head of finance of Juve: «I swear I've had some evenings when I went home and I felt like throwing up just thinking about it ».
He talks about the capital gains that are not made by moving real money, but only accounting valuations, which are "all to be built", rather than accruing from the intersection between supply and demand, i.e. between those who want a certain footballer and those who can sell him .
Juventus and other teams exchange players and, in doing so, record astonishing valuations in the financial statements, which do not correspond to any flow of money.
WHO IS PILGRIMS?
The example is the Spinazzola-Pellegrini operation. Juventus sells Leonardo Spinazzola to Roma for 29.5 million on 30 June, and gives them a certain Luca Pellegrini in exchange. Spinazzola, however fragile, is a level defender, he plays for the national team. Luca Pellegrini no one knows who he is (today he is on loan at Eintracht in Frankfurt).
In Juve's internal market accounting, Spinazzola is recorded with a real value of 7.5 million and an exchange value of 22 million. Luca Pellegrini , specularly, has a real value of zero and an exchange value of 22 million.
So Juventus sold a player worth 7.5 million, but from the balance sheet they seem to have made a big deal, because it seems they sold him for 29.5 million. But in reality he sold it to 7.5 plus a player who has a real value of zero but who is valued at 22 million in the exchange. And that's it.
The prosecutor writes: "The legal system cannot tolerate that two private companies, in debt, by reaching an agreement, can artificially increase the value of the traded goods, thus bringing an immediate revenue into the balance sheet, such as to deceive the recipients of corporate communications".
According to the prosecutor's accounts, these misleading corporate communications have significantly altered the perception of the solidity of Juventus' accounts: the financial statements should be revised by 440 million euros in three years, with the consequence of having negative equity both in 2018/2019 (-13.4 million) and in 2020/2021 (175,787 million).
With the balance sheets true, Juventus would probably have had to launch other capital increases and the very registration in Serie A would have been at risk.
According to the prosecutors, Juventus "could not have operated" given the negative equity in 2019 "nor be listed on the stock exchange".
In addition to all this there is the salary chapter, smaller in size but similar in severity, i.e. tens of millions of hidden costs because the club made commitments to pay its players with private agreements kept in special professional offices but hidden from investors, because they are excluded from the company's balance sheet.
So far, the injured parties are the shareholders of Juventus, which is listed on the Stock Exchange, and its creditors: the shareholders because they have paid millions, with the capital increases, into a more fragile company than they believed, and the creditors because they have obtained underestimated interest compared to the real risk of their loan.
But the fans, members and creditors of all the other teams in the championship have also been damaged, because the "mirror" operations on the players to generate the necessary capital gains for Juventus' budgets have distorted the structure of the championship.
THE LOCATELLI CASE
The case of Manuel Locatelli demonstrates this well, a talented midfielder who moved from Sassuolo to Juventus in August 2021, a month after winning the European Championship with Italy. The newspapers write that Juve buy Locatelli for 25 million, but it's more complicated than that.
Juventus obtains a «free acquisition, on a temporary basis, until 30 June 2023» of Locatelli».
Bizarre wording, why should Sassuolo deprive themselves of one of the best players for free?
Because upon expiry, Juventus is obliged to pay 25 million plus 12.5 in bonuses linked to sporting objectives which, however, are practically certain (such as organizing a friendly match at the Mapei stadium in Reggio Emilia).
So Sassuolo renounces an important player, they can budget for a transfer of weight even if the money hasn't entered yet, Juventus can deploy him even if in fact they haven't started paying for him yet. Accounting needs dictate formations, not sports ones.
Even the now ex CEO Maurizio Arrivabene says in the minutes: «I was told at the beginning that Atalanta and Sassuolo are among the friendly clubs».
CONCLUSION
How can you look at a Serie A so distorted by the need to embellish the balance sheets? Do fans really care nothing about what happens before and after the pitch? The illusion that the result of the 90 minutes is determined only by sporting variables should now seem unsustainable to everyone.
( Here the full article published on Domani)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ecco-gol-e-autogol-di-juventus-atalanta-e-sassuolo-con-le-plusvalenze/ on Thu, 08 Dec 2022 07:12:57 +0000.