Why the Ronaldo Deal Was A Winning Bet

“?Comunicado Oficial“: Cristiano Ronaldo”

– It looked like a plain and simple tweet.

But it was a sensation.

“If I told you – a week ago – that Cristiano

Ronaldo is now a Juventus Player.

You would laugh me out of the room.

It’s an incredible story, isn’t it?”

1 billion euros – that was supposed to be the transfer price for Christiano Ronaldo

at Real Madrid in 2009.

But when Juventus Turin knocked on the door, things had changed quite a bit.

Ronaldo wanted to move on from Real and was only under contract for one more year.

Real and Juve agreed on a transfer fee of

around 110 million euros.

In turn, Real was able to save a whole year’s salary for Ronaldo: 21 million euros.

After taxes.

So, a win-win-win situation?

Real saved money and got rid of a player who

wanted to leave.

Christiano Ronaldo would receive a higher

salary in his new club.

But what did Juve get from the transfer?

Except the best player in the world. Ronaldo alone earns more at Juventus than the entire

squad of AC Florence.

The total bill for Juventus was: the transfer, Ronaldo’s salary, bonuses and taxes.

This resulted in over 350 million euros.

Was it worth it?

Juventus Turin and its holding company had to raise 350 million euros to sign Ronaldo.

A brief explanation: Juve’s holding company is owned by the Turin-based industrial family

Agnelli and is also the majority shareholder of Fiat-Chrysler.

The announcement to spend a lot of company money on Ronaldo was quite controversial.

The employees protested against this huge spending.

About 30 million euros that were spent on

Ronaldo came from Fiat.

From the employees’ point of view: Unfair.

The company justified the million euro investment

with expected additional revenues, also in

the millions – and Ronaldo was supposed to

become an advertising partner for Fiat.

But the employees of Fiat were practically

alone in the strike.

Ronaldo was an economic factor with which

all other stakeholders could calculate.

The catering and tourism industries in Turin

were already celebrating the new superstar

in their city.

The region expected significantly more visitors.

There was talk of an increase of up to 10

percent.

For comparison: a similar increase is expected

when a city is officially chosen as “Capital

of Culture.”

Juventus also expected a massive increase

in ticket and merchandise sales – 300,000

additional jerseys were to be sold.

The philosophy behind it: “Our squad is now

more expensive – so tickets will also be more

expensive.”

The entire Serie A hoped to become much more

attractive through Ronaldo at Juve.

Meaning: More spectators in the stadiums and

more viewers on TV who want to watch the five-time

world footballer of the year.

Sky-high expectations from all sides – Cristiano

Ronaldo exceeded them.

It only took a week, and Adidas already had

to re-produce Ronaldo jerseys.

The jerseys for the season were completely

sold out.

Within 24 hours, the club had sold more than

half a million Ronaldo jerseys – 850,000 jerseys

were sold in the previous season – from the

entire team.

What do the “Authentic” jerseys currently

cost?

A children’s jersey is available for around

70 Euros – adults pay just under 130 Euros.

If you want to have your jersey printed with

a player’s name, it costs an extra 10.

So on average a Juve jersey costs 120 euros.

Those 520,000 Ronaldo jerseys sold have generated

a total turnover of over 62 million euros

on the first day of the announcement that

Ronaldo will now play for Juve.

Usually, the clubs receive 10-15% of the sales

from the manufacturers – in this case, Adidas.

If Juventus sells the jerseys in their own

fan shop at the stadium or via their online

shop, their share is much higher.

But these figures are relatively insignificant

because most of the jerseys were sold in Asia.

In other words: Juventus made between 6-9

million Euros on the first day through the

sale of Ronaldo jerseys alone.

Some insiders claimed that the figures were

too high – Adidas officially only said that

they have to re-produce, not how many they

sold.

But what the Juventus Financial Report does

show is that Juve earned 16 million more

from merchandising in Ronaldo’s first year

compared to the year before him.

The ticket prices increased by 30 percent.

Juve’s Financial Report shows an additional

14 million euros in ticket sales after Ronaldo’s

arrival.

Even before Ronaldo’s first press conference

as a Juve player, Juventus had earned a large

part of the transfer sum they paid Madrid.

According to Juventus’ official Financial

report, in Ronaldo’s first year, the club

generated over 110 million euros more than

in the previous season.

Some experts claim that the transfer was fully

amortized after only a bit more than a year.

But not only ticket prices have risen – Juve’s

share price was also heading for a record

high.

Juventus almost doubled its market cap and

grew by more than 650 mio in Ronaldo’s

first year!

So much for the raw financial figures – but

there’s more.

Let’s look at implicit values like social

media.

On Instagram alone, he has almost 250 million

fans.

That is ten times the population of Australia.

No one in the world has more.

If Ronaldo’s followers on all social media

platforms are added together, almost half

a billion accounts follow him in 2020.

In the summer of 2018, before the announcement

of the transfer, Juventus had only a fraction

of Ronaldo’s followers on social media.

Within the first four weeks after it was announced

that Ronaldo was now a Juve player, Juventus

gained over two and a half million new followers

on Twitter, YouTube, and Facebook and 3.5

million new followers on Instagram.

Not even Athletic Interest is growing that

fast.

Juve’s channel kept growing and Juventus

has the third biggest instagram account of

all big clubs in 2020.

But it wasn’t just Ronaldo’s face and talent

alone – Juventus orchestrated the transfer

news in a hollywood like manner on all its

channels:

For example, the club visually merged the

newly created corporate identity with the

CR7 brand.

Result: Over 11 million Likes on Instagram

after two days.

The club completely rebranded all their social

accounts with Ronaldo.

Even a special hashtag was created for the

day of the medical check.

It made Juventus trend on Instagram and Facebook.

Ronaldo has been active in social networks

since 2009.

He has posted several thousand pictures and

videos on Instagram.

But one of his most popular posts was when

he announced his move to Juventus.

Today, a football player is no longer only

worth as much as his foot, head, or speed

– experts also say that at least 5% of the

transfer sum represent the player’s digital

value when a deal is made.

In other words: a good social media presence

and reach increase the market value.

For Ronaldo this value is likely to be even

higher.

It’s reported that he earns more money through

his instagram posts than his salary at Juve.

The same applies to the clubs: If you have

players with a large social media following

under contract, the value of the club or company

also increases.

We have worked out a good example of this

in our story “How Nike signed Liverpool”.

It shows how Nike managed to become the new

kit supplier, even though New Balance was

ready to pay Liverpool more base compensation

and had a matching right.

Can other club’s also use this growth hack?

Yes – if the following conditions are met:

1.

the player has a large social media reach

2.

the club exploits the deal in the media.

The footballers with the most followers are

Christiano Ronaldo, Neymar, Messi.

They are followed at a greater distance by

James Rodriguez, Gareth Bale, Marcelo and

Ibrahimovic.

And everybody else.

Each of their market values would be significantly

lower if social media did not exist.

For all of them, the clubs pay social media

coverage in transfers and salaries.

The money that was paid for Ronaldo – The

big transfers lately.

These amounts are astronomical and sound crazy

at first.

But on closer inspection, the figures are

not random results of a bubble but can be

backed by financial data and expected earnings.

Of course, the main reason for Juventus was

that Ronaldo is still – even in his thirties

– one of the greatest, if not THE greatest

footballer of all time and can possibly help

Juve win the Champions League.

He knows how it works.

But there is also the economic factor.

Of course, winning is every club’s main concern.

But in recent years, soft factors have increased

in importance too: for instance, increasing

the fanbase and strengthening the club’s brand

to boost ticket and merch sales.

A club’s ability to attract lucrative sponsorships

is also crucial – this trend is fuelled in

part by social media and the glam factor that

certain superstar players can bring to the

club.

Juventus and Cristiano Ronaldo have done the

trick perfectly.

What superstar transfer would you like to

see in the future?