Juventus’ deal to acquire Cristiano Ronaldo might not be the biggest player acquisition transaction in club football. It has certainly been among the most impactful and most talked about player acquisitions in European football.
The deal had an immediate impact of the Italian top division Series A club Juventus. However, the economics of such deals goes far beyond the number of goals scored by the player, his on-field contribution and potential to draw sponsors for the club.
The $130 million signing – sixth highest ever in the European Club history – to acquire Ronaldo from Spanish LaLiga club Real Madrid earlier this has resulted in an instant windfall for the Serie A Club. The announcement of the Ronaldo deal contributed to a 40% jump in the Juventus stock values.
The club ended up selling Ronaldo No. 7 T-shirts in less than a day of 24 hours of the launch. It has resulted in $ 9 million net revenue for the club.
There was a 1.5 million instant jump in Juventus’ social media follower as the club released the news of the deal for Ronaldo. The iconic players like the Portuguese football star, among the top three highest earning sport persons in the world, also become the guarantee for better gate money and sponsorship deals for their teams.
All these revenues put together don’t match the big stars’ transfer fee and wages” of the player? So how does the clubs economy work to sustain and be profitable?
Football worldwide is a big business where professional clubs and entities rely heavily on media rights for up to 50% of their income, while another 20-30% comes from the club sponsorships. The presence of players like Ronaldo with a global fan base contributes significantly to enhance the media rights and sponsorship values for their clubs or teams.
Another 5 to 10% comes from merchandising sales, which in the case of Juventus and Ronaldo has already witnessed a more than $ 9 million windfall to the club.
The clubs usually ends up spending up to 50% of their total earnings on players wages alone, while also contributing to their national economies by way of taxes and other resources.