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Manchester United will cover the costs of Cristiano Ronaldo’s transfer in new commercial deals worth around £30 million during the next 12 months, which will be stimulated by the megastar’s global appeal, according to a leading analyst.
Experts have heaped praise on another sharp piece of business by United, which reportedly spreads the £19.8 million cost of the deal – including add-ons – over five years.
At the same time Ronaldo’s arrival will almost immediately strengthen income streams and provided manager, Ole Gunnar Solskjaer, can find the winning formula, the player will enhance the club’s chances on the pitch, too.
Cristiano Ronaldo’s return to Manchester United from Juventus has finally been completed
Dr Rob Wilson, an expert in football finance at Sheffield Hallam University, suggests the signing of Ronaldo and the benefits that flow from that could even usher in a new era of domination in domestic football.
Cristiano Ronaldo’s Old Trafford return has finally been confirmed, with the Portugal star completing his dramatic move from Juventus and becoming a United player for the second time in his career.
United have splashed out £12.9million on the 36-year-old with £6.9m to follow in add-ons. Ronaldo has put pen to paper on a two-year deal with an option for a further year after passing a medical in Lisbon at the weekend. It could see him playing for United until he is 39.
Ronaldo’s contract is worth around £385,000 per week, making him one of the highest paid players in the league. That is still a cut on the £500,000-a-week salary he was earning at Juventus.
There was no word from United on what shirt number Ronaldo will take but there have been suggestions that once Daniel James completes his move to Leeds, Edinson Cavani will vacate the No 7 shirt for Ronaldo and move to the No 21 that James currently occupies.
It has been a whirlwind few days for United and Ronaldo, who only last Friday looked destined to arrive on the blue half of Manchester and sign for Pep Guardiola’s City.
But United made a last-ditch intervention with Juventus and Ronaldo’s agent Jorge Mendes, while club legends Sir Alex Ferguson and Rio Ferdinand contacted Ronaldo to dissuade him from joining City.
Key to the commercial success of Ronaldo’s transfer is the power of his personal brand, which instantly extends the club’s reach and appeal. In February, he reached half a billion followers across social media.
He had 261 million followers on Instagram, where he is one of the most followed people in the world. On Facebook, his page had almost 125 million likes and about 147 million followers while on Twitter, there were 91 million people following him.
In contrast, Manchester United’s own social media following stands at around 140 million, according to the Deloitte Football Money League 2021. But news of Ronaldo’s signing immediately boosted the clubs Instagram account by one million followers from 43.1 million to 44.3 million.
‘You have here a match made in heaven,’ Dr Wilson told Sportsmail.
‘Commercially, Manchester United did big deals 10 to 12 years ago and they are beginning to expire. Of course, they don’t have a training ground sponsor currently.
‘My view is that their sporting performance has been sufficiently poor that they have not been able to generate a deal that represents what they feel their training ground is worth. So, they have not signed one.
‘I genuinely do not think there was a partner that was prepared to pay the money that United wanted. So rather than undervalue they have left it without a sponsor.’
United have been without a training ground sponsor since insurance firm AON’s £180m deal, which was signed in 2013, came to an end of July 1.
The club was believed to be in talks with the ecommerce company, The Hut Group, over a £200 million, 10-year deal, but that reportedly foundered amid the firm’s concerns about fan protests against the Glazer family, who own the club.
With the Glazers now making attempts to address fan concerns, which the Ronaldo signing will only enhance, Dr Wilson believes big names will once again be queuing up outside Old Trafford to bask in some reflected glory.
‘What we will see [now] is a training ground partner will be signed up and they will sign a couple of other deals. I think they will accelerate those conversations because of the appeal that Ronaldo brings.
Cristiano Ronaldo left Manchester United back in 2009 to forge a record-breaking career
‘If you were going to get involved with United, now is the time.
‘And if they lift a trophy there are all the ingredients for another period of domination. The transfer fee, the add on and his wages should be more than covered by some of the commercial activity they will be able to generate over the next 12 months.
‘You could see United earning £30m plus this season through additional commercial arrangements.’
Ronaldo has already had an immediate financial impact on the club. When United announced their intention to re-sign the player on Friday shares rocketed almost 10 per cent in price, adding £212 million to the value of the club.
And according to Omar Chaudhuri, chief intelligence officer at the football analytics organisation, the Twenty First Group, the club can expect on-pitch performance to improve and revenues to increase.
Insurance firm, AON, formerly sponsored Manchester United’s training ground
The Twenty First Group has used statistical models to assess the impact of Ronaldo on the field and they expect him to improve the team’s performance in the Premier League and Champions League this season. He will also help generate more cash.
‘Sponsors are additionally attracted to United, now Ronaldo is there,’ Chaudhuri told Sportsmail.
‘It is interesting to look at the precedent when Juventus signed Ronaldo. The main thing you notice with Juventus is the increase in commercial revenue.
‘Their Adidas kit deal pretty much doubled in the year after Ronaldo signed. Adidas obviously saw huge value.’
The kit deal increased from around £20m to £46m per year following Ronaldo’s move to Turin from Real Madrid.
Juventus benefited from a huge increase in revenues after signing Cristiano Ronaldo
There will be no immediate cash boost from the kit supplier for United, however.
‘Depending on what they do with the shirt number I think we will see more shirts sold than ever. But that initially benefits Adidas rather than Manchester United,’ Dr Wilson explained.
‘Adidas pay a licence fee to reproduce shirts and it is highly unlikely that United will see any immediate proceeds of the additional shirt sales produced by signing Ronaldo.
‘It is not about shirt sales now, but at some point, United will be renegotiating a long-term kit supplier contract and the fact that Ronaldo is going to bump shirt sales up 20 per cent or more is really going to help their negotiating position.’
The current deal with Adidas runs until 2025 and is worth £75 million per year.
Cristiano Ronaldo has been in training with Portugal ahead of his return to Manchester United
And there is a valuable strategic aspect to Ronaldo’s arrival, too.
Football in general, and the biggest clubs in particular, are concerned about the changing market in which the relationship between the game and young people appears to be deteriorating.
European Club Association research has found that the live match is considered ‘old fashioned’ by half of youngsters up to the age of 15 and 45% of those aged 16 to 24.
As a result, clubs are searching for new ways to engage young fans. Anything that extends the reach in younger age groups is of huge interest to club owners, so Ronaldo’s social media presence will clearly be a boon.
And furthermore, the attachment between fans and a favourite player is of increasing importance, particularly in emerging markets.
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In some countries, India for example, nearly a third of fans say that allegiance to a player influences their support for a club.
‘There will be Ronaldo fans out there who start following Manchester United and that gives you leverage to sell more product,’ said Dr Wilson.
‘The social media channel that lit up the most was Instagram, which is the 16-24 demographic. Everyone is concerned about the 16 to 24s. Speak to any club executive and that is their biggest headache.
‘On demand, streaming services, the way young people consume digital media means they are less likely to watch a full 90 minutes of football.
‘All the clubs want to break into that 16 to 24 market.’
Ole Gunnar Solskjaer heaped praise on Ronaldo as his United return was officially confirmed
Source: DailyMail Sports