Juventus have published their accounts for the 2022/23 season, which was disappointing for a number of reasons. After the Italian Football Federation (FIGC) brought charges against Juventus for financial irregularities, the club’s board of directors resigned, including chairman Andrea Agnelli, vice-chairman Pavel Nedved and chief executive Maurizio Arrivabene.
The club has actually had to deal with two separate legal
cases: the first one involved over-stated capital gains via inflated player
trading values, while there was also another one with allegations of false
accounting involving salary “manoeuvres”.
To add to Juve’s woes, their former star player, Cristiano
Ronaldo, has recently taken legal action against the club over €19.5m unpaid
wages (linked to the salary manoeuvres case).
And to prove that it never rains, but it pours, Paul Pogba
has failed a drugs test, so his Juve career is in the balance, though from a
purely financial perspective this could give the club the opportunity to
terminate the misfiring French midfielder’s contract with a big salary saving.
Still a huge pre-tax
loss
There are two ways of looking at Juventus’ 2022/23 financial
results: on the one hand, there has been a substantial reduction in the
deficit; on the other hand, the pre-tax loss was still huge at €117m and also
one of the largest in Italy.
Juventus’ 2022/23 accounts cover a season when they finished
7th in Serie A (following the points deduction) and reached the semi-finals of
the Coppa Italia. In Europe, they were eliminated at the group stage of the
Champions League, dropping down to the Europa League, where they got to the
semi-finals.
Their pre-tax loss more than halved from €237m to €117m
(€124m after tax), as revenue rose €46m (11%) from €414m to €460m, partly due
there being no more COVID impact, while profit on player sales increased €19m
(67%) from €28m to €47m.
The club noted that the loss would have been further reduced
by around €23m without the adverse impact on revenue and costs of the various
legal issues, both Italian and international.
Their losses over the three seasons up to 2022 were also
among the highest in Europe with their €544m only surpassed by Barcelona €840m
and PSG €725m. The last time that
Juventus posted a profit was back in 2016/17, but in the six years since then
they have lost a horrific €739m (after tax).
The importance of
player trading
Juventus’ profit from player sales in 2022/23 rose €19m
(67%)from €28m to €47m, which was a decent result, but less than half of the
gains made the previous season by Fiorentina €113m (Vlahovic to Juventus) and
Inter €105m (Lukaku to Chelsea and Hakimi to PSG).
The importance of player trading to the Juventus business
model is clearly illustrated by the steep reduction in profits in the last
three years, when they only averaged €35m, which was almost €100m less than the
€132m in the preceding 4-year period. That
said, Juventus had still made the most money in Italy from player sales up to
2022 with €446m, which was nearly €200m more than Napoli €262m and Inter €256m,
followed by Fiorentina €231m and Atalanta €226m. The problem is that this excellent
performance is very largely driven by deals from a few years ago. As we have
seen, the trend is most certainly not Juve’s friend in this case.
Excluding player sales, Juventus revenue has dropped €34m
(7%) in the past four years from the €494m peak in 2018/19 to €460m, though
this is still the club’s second highest ever. The reduction has been driven by
broadcasting and match day, due to worse performance in Europe, partly offset
by commercial growth.
The importance of
Europe
It is imperative that Juventus qualify for the Champions
League to boost broadcasting income, as Serie A TV rights are so low at €1.1
bln, especially after the most recent deal fell 14% (domestic down 5%,
international 40%). As a comparison, the
club that finished last in the Premier League in 2021/22 (Norwich City)
received €114m TV money, which was nearly 50% more than the Italian champions.
Juventus earned €64m from UEFA competitions last season,
which was the lowest of the four Italian Champions League representatives, as
they were eliminated at the group stage. Inter’s achievement in reaching the
final was worth €100m, while semi-finalists Milan received €85m and
quarter-finalists Napoli got €77m.
Juventus’ wage bill reduced by €55m (16%) from €337m to
€282m, as part of what the club described as “incisive structural cost
rationalisation actions”. These included offloading a number of players, some
of them on loan, while performance-related bonuses were obviously lower. It
should further fall this season, as some big earners left the club.
Juventus have been very reliant on capital injections from
their owners, announcing another €200m increase this season. This is the third
time that the club has had to go to the shareholders for cash recently after
€300m in 2019/20 and €400m in 2021/22, which means a total of €900m in just
five years (less fees).
Juventus need to return to their former levels, as success
on the pitch will drive revenue growth. As a minimum, they need to finish in
one of the top four places this season, thus qualifying for the lucrative
Champions League.
Comments
Post a Comment