Portuguese football superstar, Cristiano Ronaldo, has agreed an £88.3 million transfer to Italian champions, Juventus, in a deal which would see him earn a staggering £500,000 per week after tax, ending a trophy-laden nine-year association with reigning European champions, Real Madrid.
Ordinarily, paying such a lucrative sum for most other 33-year-old footballers would be financially illiterate, but this particular 33-year-old serves as a win for all parties involved – most of all for Juventus and here’s why.
Ronaldo is one of the most marketable sportsmen in the world, so marketable that when rumours of a deal was close to being reached started making the rounds last Wednesday, Juventus saw its share value rise by 7.6% in one day at the stock exchange – simply from Ronaldo being strongly linked with a move to Turin, no deal had been agreed.
In the days leading up to the move being agreed in principle and in the first few hours after the deal was announced, the share value of Juventus reportedly witnessed a 31% increase to basically earn the Italian club a return on investment in the stellar transfer.
And this is without putting into consideration the expected increase in revenue from sponsorships as well as the revenue from shirt sales – when Ronaldo joined Real Madrid in 2009 at a time his star was yet to be at this level, the club sold a million replica shirts within six months after his unveiling. Imagine how many shirts Juventus would sell over the duration of Ronaldo’s contract at the club.
And on the sporting level, Ronaldo joins a club where his goals and winning attitude can push Juventus to maintain its dominance of the Italian league and, more tellingly, compete with the top clubs in European competition. The latter would see the club earn more prize money and remain more lucrative in the eyes and pockets of sponsors.
Most of all, Ronaldo’s presence in the Italian league would raise the profile of the league as television numbers would increase, leading to broadcasters offering more money to televise more Italian league matches.
From this TV money which other clubs would also benefit from, the Italian league could become more competitive and attract more fans to the stadia.
For years, the Premier League in England along with the Spanish top division in recent years have long enjoyed far more lucrative TV deals than the Italian league.
England’s top division is currently enjoying a record £5.14 billion deal which started in the 2016-17 season and sees each club earn a minimum of £84 million per season. Spain meanwhile is negotiating a new TV rights deal which could see the clubs potentially share from €2.3 billion.
Italy however enjoys less than €500 million from local TV rights deal and it was only in 2017 when an international TV rights deal worth €1.2 billion came into being. But with a star attraction like Ronaldo, the Italian league is likely to enjoy a much-improved TV package in the coming years – to the benefit of the competing clubs.
With more revenue coming into the Italian league, it gives the Italian clubs an improved financial clout to compete with rivals from England, Spain, Germany, and France (PSG’s star-studded team and improved displays from a handful of other top French clubs have earned the league a lucrative TV rights deal, too).
This expected windfall for the Italian league would only lead to a more competitive UEFA Champions League and Europa League. The Italian league would likely be dominated by Juventus (winners of seven successive league titles at the moment) in the immediate future, but the Italian league would still be the better for it on the long term.