Juventus' 15-point deduction and the 'plusvalenza' scandal, explained

TURIN, ITALY - JANUARY 18: Roberto Spada, Monica Tardivo, Andrea Agnelli, Pavel Nedved during the Juventus Shareholders' Meeting at Allianz Stadium on January 18, 2023 in Turin, Italy. (Photo by Daniele Badolato - Juventus FC/Juventus FC via Getty Images)

Juventus, Italy's most powerful soccer club, will be forced to forfeit 15 Serie A points after an Italian court essentially found that it had rigged finances related to transfer deals.

The point deduction will be applied to the current season, pending a potential appeal, and will be a crushing blow to Juve's hopes of remaining among European soccer's elite. It will take the Turin-based club from third place all the way down to joint-10th at the midway point of the season — just a few years after it won nine consecutive titles.

Italy's soccer federation announced the point deduction Friday after prosecutors reopened the "plusvalenza" case. The term is Italian for "capital gains," which is what Juventus allegedly made by inflating the values of outgoing players when they were traded away from the club.

The 'plusvalenza' case

Juve, which doubles as a publicly listed company, first attracted the scrutiny of the Italian government in or before 2021. CONSOB, the government authority responsible for regulating the stock exchange, probed dozens of transfer deals that, it suspected, had run afoul of either soccer's financial rules or even criminal law.

Juventus wasn't the only club investigated, but it was the primary one. After a lengthy investigation, all involved were acquitted in May. But the Italian soccer federation announced last month that a federal prosecutor had decided to appeal and re-take up the case.

A month later, on Friday, it announced the sanctions stemming from the appeal. In addition to the point deduction, Juventus chairman Andrea Agnelli will be banned from Italian soccer for two years. Other executives involved were also suspended.

The Italian court responsible for the ruling will reportedly lay out its reasoning in 10 days. Juve will then have 30 days to appeal. It's unclear whether the Serie A table would be modified while a potential appeal is ongoing.

What did Juventus do?

The case hinged on a loaded question: Who, exactly, gets to decide what a soccer player is worth?

In many high-profile transfers, the answer is simple. Two clubs negotiate a price. A player moves in one direction, millions of dollars go to the selling club, and those millions become the player's value on the club's accounts.

The answer gets murky, though, when a transfer is not just player-for-cash, but rather player-for-player(-and-cash). Take, for example, a 2020 swap between Juventus and Barcelona. On aggregate, Juve sent Miralem Pjanic and roughly $14 million to Barca in exchange for Arthur Melo. So how much, in dollar terms, was each player worth?

What Juve and many other clubs realized is that they could inflate the values of players in those swap deals. Juve and Barca decided that Pjanic was 60 million euros ($67.8 million) and Arthur was 72 million euros ($81.4 million), despite neither player being even remotely that good. They could then log those inflated values on their books to help their accountants.

They have argued — and in May, authorities agreed — that only they, the clubs, have the right decide how much a player is worth. Juve, on these grounds, has denied wrongdoing.

Why would Juventus do that?

The "capital gains" — the difference between reported sale price and market price — were short-term solutions that helped Juve (and other clubs) comply with soccer's "Financial Fair Play" rules.

FFP, which has since been overhauled, prevented clubs from spending far beyond their means. Under the rules, a given club's transfer fees and player wages could not exceed its income by more than 30 million euros over a three-year period.

But there were loopholes — namely, that transfer fees were amortized over the length of the player's new contract. If Juventus bought a player for $50 million, and signed him to a five-year deal, the transfer fee would only count for $10 million toward the team's spending limit each season.

The transfer fees it received for outgoing players, though, were simply income. When it sold Pjanic, technically for some $68 million, the sale immediately boosted its spending cap by $68 million.

So, by inflating the values of players in swap deals, Juve would give itself more room to maneuver in that season's transfer market — more financial flexibility to build a squad capable of challenging for the Champions League crown.

But of course, over a longer time horizon, this type of dealing has sent clubs like Juve careening toward financial ruin. The Bianconeri, as they're known, had already fallen off their pedestal atop Serie A and among the true Champions League contenders. They were, even before Friday's penalties, struggling to keep up with AC Milan and Napoli on the field, not to mention the top English Premier League clubs' bank accounts off it.

Now, pending the appeal, they risk missing out on next season's Champions League and the revenue it guarantees. Their short-term thinking has come at a grave long-term cost.

Why is only Juventus being punished?

Juventus is not the only Italian club that has engaged in this type of transfer dealing — and by rule, soccer's rules, it was permitted.

But this was not an investigation by European soccer authorities. It was an investigation by Italian government authorities. Juve is, at this point, the only club that has been punished presumably because, as a publicly traded company, it allegedly misled shareholders and engaged in illicit accounting practices.