July 23 – Cristiano Ronaldo’s €117 million transfer from Real Madrid to Juventus has polarised opinion with car union protests over the ‘immoral’ size of his transfer and wages, and fan excitement at what he will bring to the Italian champions.
A report the Football Benchmark team of KPMG’s Sports Advisory Practice estimates the annual financial impact of the transfer at €85 million, or €340 million over the 4-year contract period.
But this could be money well spent if Ronaldo drives Juventus revenue to the level where the club is competing with other European giants. Certainly, says the report, brand and social media exposure of Juventus will rapidly grow worldwide. “Monetising on digital activities will be crucial in order for them to meet revenues growth expectations.”
With league TV and sponsorship already locked in, Ronaldo’s impact will not be felt in the early year of his contract. Where the real win for Juventus can be found to support the fee is in the unique communications and sponsorship environment Ronaldo brings with him.
“Within three football seasons, it is realistic for Juventus FC to add an additional €75-100 million, complementing the €120 million reported in their latest accounts as at 30 June 2017,” says the report.
Perhaps the largest opportunity Ronaldo brings is the potential to open up the Juventus brand and media exposure in countries where the club does not have a strong presence.
“Ronaldo’s social media exposure within Asia, South and Central America, and the US would help Juventus to create a more global brand which, in turn, would eventually result in higher revenues. Within this context, Juve have indeed to capitalize on the opportunity to become the second or third favorite choice for football fans. If a star player like Ronaldo moves to a new team, he also bring his sizable follower base with him, as, to a certain extent, fans tend to link more with individuals rather than clubs these days,” says the report.
Andrea Sartori, KPMG’s Global Head of Sports and the report’s author, said: “Monetising the inherent value in social media is crucial for clubs in order to stay competitive and to enhance their profitability. Club channels also provide a unique setting for partners and sponsors to activate their brands and, ultimately, increase their sponsorship value or return on investment. This is the area in which Juventus FC will have to make a major effort to fully leverage Ronaldo’s investment. Management commitment, creativity, innovation and, potentially, new skills not currently available at Juventus FC, will also be required to meet revenue growth expectations. These efforts will obviously be facilitated by further success on the pitch and eventually by the win of the UEFA Champions League.”
See the full report at https://www.footballbenchmark.com/documents/files/public/KPMG%20Football%20Benchmark_Ronaldo%20Economics_Press%20Release(3).pdf
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