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Cristiano Ronaldo - More Than Just A Player

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2.60K   //    27 Jul 2018, 00:04 IST

Juventus - Cristiano Ronaldo Day
Juventus - Cristiano Ronaldo Day

There's no doubting Ronaldo's value wherever he goes. A goal-machine and a brand within himself, buying Ronaldo can be looked at as buying an entire business corporation altogether.

With over 650 career goals, 5 Ballon d'Ors and a net worth of over 250 million pounds (or more), he surely is an apex athlete. There's actually no subtle way to describe the magnitude of this man, especially how he has been framed and projected by media and fans all over.

When Juventus bought Ronaldo, they surely would have known they were not just buying a player but a brand that would escalate their market graphs to newer heights.

The deal

To say Juventus 'bought' Ronaldo would be a pretty formal way to describe the deal. It was more a situation where the player was looking to leave and Juventus just happened to have the resources to land him in Turin.

Ronaldo, who had an annual salary of about 30 Million Euros at Real Madrid, was unhappy with the Spanish tax regulations which had landed him in courts for tax evasion cases.

TOPSHOT-FBL-EUR-C1-REAL MADRID
Champions!

Ronaldo seemed to have been caught in a web of tax fraud cases and was hence looking to leave Spain.

A deal was struck with Juventus who agreed to pay Real Madrid above the fee they paid for him in 2009.

The risks look tenable

Even though Ronaldo for 100 million looks cheap, a 100 million euros still is a lot of money for any club to pay- a risk which Juventus has taken in order to justify the future gains which when projected, is a lot more than a 100 million euros.

The Risks? 

Well, the most obvious one being the protection of the asset. Insurance covers accidental injuries (short term-long terms), accidental deaths, permanent disability, etc for a player and even though the insurers will tend to provide adequate covers and favorable protections for a player like Ronaldo, the cover still is not expected to exceed 10 million euros in total.

Adding to the risk is the fact that Ronaldo's fees have to be shed out by the club in 2 financial years and for Juventus to accomplish that while keeping in mind the Financial Fair Play rule would call for some necessary actions.

In the last 10 years, the ratio of record transfers to operating cost has been 22% and Ronaldo's transfer is slightly higher than the average at 28% (Neymar's was 42%). The immediate expected actions from Juventus could mean the offload of some star players, inflated ticket/merchandise prices and increased commercial value of the club.

The Way Forward

Juventus had already announced an increase in the seasonal ticket prices to about 30% from the 2017-18 season. Also, projecting a better spectator number throughout the season, Juventus should look to have an increased revenue amount of over 45 million euros by the end of the 2018-19 season.

As far as players are concerned, offloading the likes of Higuain(30), Dybala(24), Pjanic(28), etc will certainly take some major burden off the team's finance.



KPMG report
KPMG report

Another major segment where the Club will be looking to capitalise are the T-shirt deals and club Sponsors. The current deal with Adidas stands at 40 Million Euros a year as compared to Manchester United's 156 Million Euros or Real Madrid's 140 Million Euros. In recent developments, Juve has launched a new set of fashionable apparels and should be looking to use Ronaldo in the smartest way possible in this segment, considering how big a brand he is. Also, the fact that 520K Ronaldo T-shirts were sold on the first day of sale shows signs of the brightest of possibilities for Juventus in merchandising.

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This also gives Juventus a big opportunity to showcase high pointers in sponsor developments. It put them in greater power to re-negotiate their contracts with the existing partners, or in some cases, replace them with newer ones who will be more than willing forward to come on board with greater lucrative offers; especially considering the high amount of cash-flow of Chinese companies in the recently concluded FIFA World Cup, who comprised of 21% of the total FIFA partners.

Talking about China, Juventus will be looking to expand its territories to the newer markets in China and the South-Asian countries to better their brand image and commercial value. They can surely use Ronaldo's outreach potentials on social media, which is almost 6 times that of Juventus across all platforms (a majority of which comes from South-East Asia), to go more global.

Lastly, the action where it matters

The best way Juventus can leverage from Ronaldo is to bring out the best from him on the pitch. Having lost in the Champions League finals twice in 5 years Juventus would surely love to put that final nail in the coffin this time around. Not to mention the humungous broadcasting revenue (over 150 million) that they can leverage off the domestic league and the Champions League. 

Suffice to say, Ronaldo is probably the most significant signing of the season on the pitch and outside and its just a matter of time till we see the effects unfolding on the former.

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