“Swallow the Whale”: the net effect of Ronaldo’s return

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Manchester United PLC update

Cristiano Ronaldo (Cristiano Ronaldo) is scheduled to play for Manchester United on Saturday. This is the first game in 12 years. This game will be regarded as a happy home by fans at Old Trafford.

The Portuguese striker’s transfer was made after Manchester United heroes (including former head coach Sir Alex Ferguson) made an emotional appeal for his refusal to move to local rival Manchester City.

However, behind the scenes, the club must ensure that the deal makes commercial sense, breaking the strategy of buying players in the best condition to make the 36-year-old Ronaldo the highest paid football player in the Premier League.

Club insiders liken the signing to “swallow a whale”-Cristiano Ronaldo and Messi are considered the greatest player of his generation. He will spend at least £60 million, accounting for Manchester United’s estimated income for the next two years. 5% of.

People close to the club’s leaders said that the money cannot be recovered by jersey sales or sponsorship deals alone.

On the contrary, executives are hoping for more intangible returns.This includes believing that Ronaldo will raise the internal standards of the team and inspire fans who protest against the club’s participation in the game. Unlucky UEFA Super League Project and attract a new generation of supporters from around the world.

Cristiano Ronaldo poses in a Manchester United jersey after signing with the club in August © Manchester United/Getty Images

The club’s recruitment committee consists of the following people Outgoing Executive Vice Chairman Ed Woodward, Director of Football John Mutu and Head of Scouting Operations Steve Brown. Manager Ole Gunnar Solskjaer also has veto power over potential signings.

The target list is decided a few months before the three-month summer transfer window, when most transfers will take place.

This is the process of signing Sancho and Real Madrid’s Rafael Varane from Dortmund this summer. The recruitment team will meet this month to discuss goals for next summer.

Ronaldo’s signing was much faster. His agent Jorge Mendes had preliminary discussions with several clubs for several weeks, but only notified Manchester United executives that the striker had decided to leave Italian club Juventus on August 24.

Manchester City are already in in-depth discussions to sign he has given up the goal of Tottenham Hotspur Harry KaneBut Manchester United moved quickly and negotiated an alternative deal for Manchester City, which was completed on Friday.

It provided Juventus with a transfer fee of 15 million euros, amortized over five years, and a performance-related bonus of up to 8 million euros. The two parties agreed to a salary package slightly lower than Cristiano Ronaldo’s annual net income of 31 million euros in Juventus. The contract is for two years and can be extended for another year.

A person close to the Manchester City leader said that they have concluded negotiations with Ronaldo on Juventus’ insistence on the transfer fee. “If Manchester City really, really want to sign him, Manchester United will not smell it,” the person said. “This is really a convenient marriage. No one else really wants him.”

But Manchester United has proven that it is one of the few clubs that can afford Ronaldo. With fans returning to the stadium, its goal is to restore the annual revenue of more than 600 million pounds before the pandemic, making it one of the richest teams in world football.

Manchester United fans showed off a cropped image of Cristiano Ronaldo during the match against Wolverhampton Wanderers last month
Manchester United fans showed off a cropped image of Cristiano Ronaldo during a game against Wolverhampton Wanderers last month © Carl Recine/Action Images/Reuters

Most income is stable. The Old Trafford Stadium is sold out every season through season tickets and hospitality. The broadcast transaction is centrally formulated by the Premier League and UEFA, the governing body of European football.

Like other Manchester United players’ contracts, Ronaldo’s contract includes “downside protection”, such as a pay cut if the team fails to qualify for the European Champions League, the most prestigious club championship in Europe, and a share of 2 billion euros between participating clubs. .

According to consulting firm KPMG, Ronaldo did help increase Juventus’s revenue. During his three years in office, the Italian club’s annual sponsorship revenue increased from 143 million euros to 175 million euros.

Manchester United is not expected to have the same effect immediately, with its 2020 business revenue of 279 million pounds.The club has won the largest endorsement deal, such as Five-year jersey sponsorship In March of this year, German technology company TeamViewer announced a value of 275 million euros.

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Most of the revenue from the sales of copy shirts is obtained by the manufacturer Adidas, although the club does obtain higher profit margins through its official website operated by the American online retailer Fanatics.

KPMG’s global sports director Andrea Sartori said: “When Juventus acquired Ronaldo, their commercial revenue base was significantly lower.” “Manchester United is far ahead, so the marginal revenue is not that high.”

However, the striker does help the club’s business. Manchester United used its social media influence to defend the value of its business transactions during the pandemic, and Ronaldo has the world’s largest Instagram fan base, reaching 340 million.

Since 2013, his stardust may also attract new attention from the club, which has not won the Premier League or the Champions League, the two biggest competitions.

Although it is hoped that Ronaldo can push Manchester United to compete for these awards again, club executives believe that he will also attract a young international audience, which will benefit the club in the coming years.

“From a business perspective, Manchester United’s acquisition of Ronaldo is like injecting the best fuel into the fastest car, but that’s not why we did it,” said a person with direct knowledge of the deal, adding: “Ronaldo’s quality, leadership and experience will help the young players and give us a boost on the court.”

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