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‘Swallowing a whale’: the net effect of Ronaldo’s return

Manchester United PLC update

Cristiano Ronaldo will be playing at Manchester United for the first time in 12 years on Saturday in a match that fans will treat as a fun homecoming at Old Trafford Stadium.

The Portuguese striker’s transfer came after a sentimental appeal from United heroes, including former manager Sir Alex Ferguson, to refuse to transfer to his local rival Manchester City.

But behind the scenes, clubs need to make sure the deal is commercially meaningful and buy players in prime to make 36-year-old Ronaldo the best soccer player in the English Premier League. I broke the strategy.

Club insiders liken the signature to “swallow a whale.” Ronaldo, along with Lionel Messi, is considered the largest player of his generation and will cost at least £ 60m, or about 5% of United’s projected revenue over the next two years.

People close to club leaders say that you can’t get your money back just by selling shirts or sponsoring contracts.

Instead, executives are taking advantage of more intangible profits. This includes the belief that Ronaldo raises standards within the team and excites fans who protest the club’s involvement. Unlucky European Super League Project and attract a new generation of supporters around the world.

Cristiano Ronaldo poses in Manchester United shirt after signing the club in August © Manchester United / Getty Images

The club’s recruitment committee Outgoing Vice Chairman Ed Woodward, Football Director John Martov, Scouting Officer Steve Brown, Football Negotiation Director Matt Judge. Manager Ole Gunnar Solkjaer also has the right to veto the possibility of signing.

The list of targets is determined months before the three-month summer transfer period, when most transfers take place.

That was the process signed by Borussia Dortmund’s Jadon Sancho and Real Madrid’s Raphaël Varane this summer. The recruiting team will meet this month to discuss goals for next summer.

Ronaldo’s signature was much faster. His agent, Jorge Mendes, told United executives that the striker had decided to leave the Italian club Juventus on August 24, after a few weeks of tentative discussions with several clubs. It was just.

Manchester City was already in a high-level debate to sign that it had given up on Tottenham Hotspur’s target. Harry Kane.. However, United has swiftly moved to negotiate a Citi alternative deal completed by Friday.

We provided Juventus with a transfer fee of € 15 million, which is amortized over five years, and a performance-related bonus of up to € 8 million. A wage package slightly below Ronaldo’s net annual net of € 31 million in Juventus has been agreed on a two-year contract with the option of extending it by another year.

A person close to Manchester City’s leader said Juventus had closed negotiations with Ronaldo over claiming a transfer fee. “If Citi really really wanted to sign him, United wouldn’t have had a snuff,” he said. “This really ended up in a political marriage. Nobody else really wanted him.”

However, United has shown that it is one of the few clubs that can afford Ronaldo. With fans returning to the stadium, they aim to be one of the wealthiest footballers in the world with annual pre-pandemic revenue of over £ 600m.

© Carl Recine / Action Images / Reuters

Most of this income is stable. Old Trafford is sold out each season through the sale of advanced season tickets and hospitality. Broadcast transactions are centralized by the Premier League and UEFA of the European Football Federation.

Ronaldo’s contract, like other United players’ contracts, includes “downside prevention” such as wage cuts if a team fails to qualify for the Champions League. The Champions League is Europe’s most prestigious club tournament, with € 2 billion shared among participating clubs.

According to consultancy KPMG, Ronaldo helped increase revenues in Juventus, with annual sponsorship revenues for Italian clubs increasing from € 143 million to € 175 million over three years.

United, which had a commercial revenue of £ 279m in 2020, cannot expect the same effect immediately. The club has already secured the largest approved transactions, including: 5 year shirt sponsorship The German technology company TeamViewer, announced in March, is worth € 275 million.

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While the majority of the revenue from selling replica shirts comes from the manufacturer Adidas, the club raises the profit margin on its sale through the official website operated by US-based online retailer Fanatics.

“When Juventus acquired Ronaldo, they started with a significantly lower base of commercial revenue,” said Andrea Sartori, global head of sports at KPMG. “United is so advanced that marginal profits are not very high.”

But strikers help the club’s business. United cites social media reach in defending the value of commerce during a pandemic, with Ronaldo having the world’s largest Instagram, following 340 million.

His Stardust could also draw new attention to clubs that haven’t won the two biggest tournaments since 2013, the Premier League or the Champions League.

Although Ronaldo is expected to be able to push United back into the fight for these awards, club executives believe Ronaldo will also attract a young and international audience, which will benefit the club over the next few years. May bring.

“From a commercial point of view, Manchester United’s acquisition of Ronaldo is like putting the best fuel into the fastest car, but that’s not why we did it,” he said. Someone who knew directly said. Help young team members and shoot your arms on the pitch. “

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