Finance & Business

CR7 and Juve, why it will make sense

AT the age of 33, and after a career at Real Madrid laden with glittering prizes, Cristiano Ronaldo’s move to Juventus may seem like a surprising decision. But it could be a very lucrative business transaction for both sides that enhances the reputation of the player and helps shift his employer up a gear or two.

From Ronaldo’s perspective, the timing of the announcement was perhaps a little inappropriate. With the World Cup coming to a climax, an attempt to undermine the big event may have been an accident, but CR7 is never shy when trying to steal the limelight. But with Ronaldo out of the World Cup and Italy watching from afar, the move switched the attention from events in Russia, albeit temporarily.

However, some critics may wonder why Juve were so keen to pay € 100 million for a player just coming out of his early-30s. And why is Ronaldo opting for Serie A rather than a highly-paid “Elephant’s Graveyard”?.

Simple. Ronaldo is not a busted flush, like some players of his age group. He’s incredibly fit and he likes to win, he’s also demonstrated that he can change his game to accommodate the advancing years. His new role is not just about ensuring Juventus continue their overwhelming recent dominance of Italian football, it’s also a sign that a Serie A club can still attract the world’s best, even if it is at the latter stages of their career.

Having won countless prizes and plaudits at Manchester United and Real Madrid, he can continue the trend in Turin, and at the same time, become the new billboard face of Serie A. Compare this move to that of one-time Juve target Jack Wilshere (26) to West Ham and you know which one is going to be the more successful. Wilshere, watching from his North Hertfordshire home, will be kicking himself that a move to Turin didn’t materialise.

As far as Juve are concerned, they are buying into the CR7 phenomenon. He has 300 million social media followers and the shirts he’ll be wearing will be the black and white stripes of Juventus. The club will sell thousands of shirts with the Ronaldo name (brand) on the reverse an sponsors will clamour to be involved. Interestingly, Ronaldo also makes money for his sponsors – $ 474 million in the past 12 months according to Forbes. It is comparable to when David Beckham moved to Real Madrid, shirt sales rocketed bearing the Beckham name. Ronaldo will have an even more dramatic impact and, at the same time, the Juventus brand, which has taken command of the letter “J” in Italy, will be rejuvenated and the doubters may be convinced.

Italy’s champions may be standing astride Italian football, and that shows little sign of changing, but Juve are clinging onto the lower reaches of the top dozen clubs across Europe, indeed the world.

Having Ronaldo in their camp will give the club a chance of ramping-up their revenue streams, which trail behind many of Juve’s international peer group. Consider that Juve’s commercial revenues amounted to around € 120 million in 2016-17 compared to Manchester United’s € 320 million, Barcelona’s € 288 million and Real Madrid’s € 281 million. Juventus’ shirt sponsorship and kit deals are much lower than the clubs they like to call rivals in Europe. It is commercial revenues where the potential to grow can really be derived from the arrival of CR7. This is undoubtedly what drove the spike in Juve’s share price when the deal was announced.

Juve are already close to capacity at their shiny stadium, so there are question marks about how much they can increase matchday revenues. Their attendances in 2017-18 averaged 39,000, so there’s limited upside without substantially increasing admission prices and only recently, they announced higher season ticket prices which prompted fans to call for a Ronaldo-type signing to justify the rise. And TV deals in Italy are also lagging some of the more lucrative leagues, although thanks to their status in Europe, Juve made € 233 million from broadcasting in 2016-17. One assumes that with one of the world’s most instantly-recognisable celebrity faces in their line-up, that Juve will be aiming to renegotiate their major deals in the coming weeks and months.

Juventus have paid a lot, but it is less of a gamble if Ronaldo increases profitability and, at the same time, gets the club another stab at the UEFA Champions League. Nobody knows how to win the competition better than him and with his World Cup ambitions extinguished, like Messi and possibly Neymar, what better way for him to choreograph that next career move. It will also enable Real Madrid to rebuild a squad in need of an overhaul and with the World Cup acting as a shop window for the likes of Mbappe, Hazard and Neymar, Ronaldo’s departure allows room for new egos.

There’s also something vaguely applaudable about Ronaldo making the move from Spain to Italy. He’s actually taken a pay cut, according to Forbes, although at € 30 million per year and an endorsement portfolio that brings in well north of $ 47 million, Ronaldo remains a micro economy all of his own. Nevertheless, he could have run down his career in an emerging market and picked up even more cash while locking horns with Rooney, Zlatan and others. He may have gone to a marginally less celebrated league (by current standards), but Juventus are certainly one of Europe’s blue riband clubs and one of the main reasons La Liga became so glamorous was because of Ronaldo himself.

In reality, when you’ve played for Manchester United and Real Madrid, two of the world’s biggest and most high-profile clubs, where do you go next to prolong your career at the top? This is a new challenge within the same elite bracket of the game and for Juve, it might just provide the fresh impetus that makes them Champions League contenders again. Of course, It’s short term, but what isn’t these days in top class football? Watch this space intensely, not just for events in Turin, but also how the rest of Serie A reacts to the arrival of Ronaldo.

Photo: PA

One comment

  1. How very sad.
    I do hope they’ll keep on failing in the UCL at lrast until he stays there.
    Football clubs turned into kinds of McDonalds or the likes, fans ripped off . But probably they deserve it as they will never wake-up.
    Does top football still have any sense?

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