Short-term financial harvesting serves interests of both Ronaldo and Juventus

Professor Simon Chadwick

Posted: July 12, 2018

In signing Cristiano Ronaldo, Juventus have acquired a player with a proven track-record of success – both on the field and off it. Financially and commercially, there are consequent expectations that the Italian club will be able to strengthen, something which is already being reflected in the upward surge of Juve’s share price.

If the Portuguese international can maintain a high-level of fitness and performance, then one assumes that La Vecchia Signora (The Old Lady) will play better, win more, and increase its associated revenues.

The ‘Ronaldo Effect’ may help to boost ticket, merchandise and commercial rights sales, as well as providing a point of engagement for new fans – in Italy, Europe and elsewhere (for example, in China). One  therefore senses that both club officials and shareholders are hugely optimistic about the impact that CR9 will have upon Juve.

However, there is something rather disconcerting about the deal, not least the price that Juventus has paid for Ronaldo. Notwithstanding the inflated nature of player transfer values (which, ironically, can probably be attributed to Ronaldo’s arch rival Neymar – who may replace him at Real Madrid), a fee of US$117 million seems excessive for a 33 year old.

Indeed, take Neymar out of the equation; two years ago Manchester United paid approximately the same for Paul Pogba as Juventus has just paid for Ronaldo, even though the Frenchman was only 23 years old at the time.

A specific concern is that CR9 is at the end of his brand lifecycle as a player, which means that his revenue generating potential across the remaining years of his contract is much less than, say, Pogba’s. Whereas United could (in theory at least) get another ten years of revenue generation from their asset, Juventus will be fortunate to get three from Ronaldo. Even then, this is based upon the assumption that Ronaldo remains fit and experiences no significant decline in performance.

As such, if Juve is going to make its money back from the signing, they really need to sweat their new acquired asset. However, this could prove counter-productive if it adversely affects Ronaldo’s game. He is aging and despite what the player might think, both Ronaldo and Juve may have to confront the reality during the coming years that ‘things ain’t what they used to be’. Ultimately, unless they can change, all brands die – Ronaldo faces this prospect.

There’s also something disturbing about the strategic implications of Ronaldo’s signing. Essentially, the player is a cast-off from one of the world’s biggest, most successful clubs. Instead of keeping Pogba and working to build revenues from someone who was at the growth phase of his brand lifecycle, Juventus sold him. This suggests the Turin outfit is grappling to remain in touch with the high-performers of the industry, like Real and Manchester United.

In turn, this rather suggests a serious issue for Juventus; here is a club that appears to be too big and too good for Italian football, yet too small and not good enough to compete with its major European rivals. Accordingly the signing of Ronaldo, rather than heralding a new era for the club, instead somewhat implies that Juve is stuck in the middle and struggling for position, identity and relevance.

Ronaldo’s signing could be a bonanza for Juventus. Equally though, it could be a curse: the club now has to meet the costs of signing a player who is of questionable commercial value – someone who may come to symbolize just how far behind its rivals the club may now be falling.

About Professor Simon Chadwick

Simon is Professor of Sports Enterprise at Salford University in Manchester (UK), where he is also a Co-Director of the Centre for Sports Business. He is also a Founding Co-Director of the China Soccer Observatory and a Senior Fellow of the China Policy Institute at the University of Nottingham (UK). He has worked in football across the world, for various organisations including companies, federations, and governments. He tweets via @Prof_Chadwick