Ronaldo's Juventus impact muted on and off the pitch
Three years after the much heralded arrival of Cristiano Ronaldo in Turin, the fabled CR7 brand has moved on for a fraction of his initial transfer fee. His re-signing with Manchester United has undoubtedly set pulses racing on the red side of the city, but as the world’s record international goal-scorer prepares to make his return at Old Trafford, the legacy he leaves in Juventus is ambiguous at best.
In the summer of 2018, after four Champions League triumphs with Real Madrid, Cristiano Ronaldo shocked the world when he announced his latest triumph at the club would be his last. After helping Los Blancos claim a third successive European Cup, the five-time Ballon d’Or winner opted to move to pastures new – and at the time, Serie A’s top team looked like the perfect fit.
Juventus had cruised to seven consecutive Scudettos prior to Ronaldo’s arrival in Turin, but had not captured a continental trophy since 1996. The Old Lady of Italian football had featured in two Champions League finals during their latest era of dominance, but had been overcome by Spanish opposition on both occasions – the second of which saw Ronaldo strike twice, in a Man of the Match performance. The poaching of Madrid’s star man seemed like the final piece of the puzzle in this context – one that could not only finally see Juve over the line to claim an elusive Champions League title, but also help them tap into massive new markets, with one of the world’s very best players finally wearing their shirt.
Three years later, however, the €116 million price tag for the then-33-year-old looks less and less savvy as a piece of business. Following up on a research piece from 2018, KPMG’s Football Benchmark Team has found that Ronaldo’s time did not entirely live up to the hype, either on or off the pitch.
From a footballing perspective, Ronaldo’s impact was muted at best. Certainly he scored plenty of goals, but Juve’s performance in Europe and domestically stagnated during his time in Turin. Football is not a sport which is won via a balance sheet – and in spite of holding a squad value vastly superior to those of Ajax, Lyon and Porto, Juve crashed out of the Champions League to all three in the years where Ronaldo featured for them. The club, having hoped Ronaldo’s arrival would usher in a new golden age, were unceremoniously dumped out of the competition before the semi-finals during each campaign.
Worse still, though, Juve’s domestic dominance also came to a disastrous end. After winning the league by decreasing margins in Ronaldo’s first two seasons, the Juventus Stadium did not get to host a tenth consecutive title parade – as Andrea Pirlo’s slap-dash stint in charge ended with the club scarcely scraping fourth place. Considering the club was knocking on the door of a Champions League title, and routinely winning trophies domestically prior to Ronaldo’s arrival, it is therefore safe to say spending huge amounts of money on one player did not notably improve Juve on the pitch.
Spending big
Meanwhile, off the pitch, Ronaldo’s impact also resulted in some questionable returns. According to the Football Benchmark Team, Ronaldo earned an annual net salary of €31 million, meaning the club's gross salary expenditure was approximately €57 million. That means that Juventus FC, taking into account both annual amortisation and gross salary, bore a total annual cost of €86 million for Ronaldo alone. This is approximately 22% of the total operating revenues the club generated at the time he joined, which were €400 million.
With Massimiliano Allegri returning as Manager to rebuild at Juve, this cost might have been seen by some as one that would be better invested in the wider squad. As a result, when offers began to surface for the club’s one-time crown jewel, things moved fast. Ronaldo re-joined Manchester United on a cut-price deal for €15 million – and KPMG asserts that this is €14 million less than the net book value of the player at the end of June 2021, taking his overall cost to the club to €272 million over the past three seasons. There may still be benefits to this deal for Juve, however.
KPMG noted, “The €86 million savings on the 2021/22 season will represent essential financial relief for the Turin club, which closed the 2019/20 financial year with a net loss of €89.7 million and is expecting a more severe loss in the region of €190 million for the 2020/21 season. Furthermore, the fixed fee paid by Manchester United FC might be increased, up to a maximum of EUR 8m, upon achievement of specific performance objectives over the duration of the employment contract with the player.”
That is not to say that Ronaldo’s time at Juve had no pluses from a business angle, though. His presence in his first season was particularly significant for matchday and commercial income, and it would have likely been more conspicuous without the breakout of Covid-19. According to KPMG, stadium revenues grew by 25% in his first season with Juve, from €57.2 million €71.5 million. This was partially because it helped the club to rationalise a more expensive ticket price strategy, rather than because of larger turnouts.
From a broadcasting perspective, there was no specific out-turn, as Ronaldo’s arrival occurred just after Serie A collectively sold its rights for the 2018 – 2021, making it unable to reap any sort of boost in its negotiations with interested broadcasters. However, commercial revenues for Juve jumped considerably, registering their highest year on year growth at 30% to reach €185.4 million in the 2018/19 season. As a testament of the entrenched international appeal achieved by the club after the arrival of CR7, unlike matchday income, the commercial revenue stream didn’t suffer any negative effects from the pandemic, as it remained stable in the 2019/20 season.
Furthermore, Ronaldo’s presence caused a commercial upgrade of the value of the Juve jersey before and after Ronaldo’s acquisition. Sponsors previously paid €40 million to appear on it, but once he arrived this was boosted to €101 million. Specifically, Juventus FC agreed upon an annual €45 million jersey deal with Jeep, and an annual €51 million from kit supplier Adidas. The increased visibility provided by the Portuguese superstar also facilitated striking a new back-of-shirt deal with retail company Cygames, worth €5 million per year.
Even so, with the effects of the pandemic, Juve’s revenues took an inescapable hit, making it hard to determine just how important Ronaldo’s arrival was for the club’s finances. The ambiguous results can hardly be said to be purely of the club or player’s making though.
KPMG concluded, “Besides the financial risk consciously undertaken by the club, the history of Ronaldo in Turin could also be characterised by unfortunate timing. While it is evident that Juventus FC managed to increase their commercial revenues and international appeal, it is equally apparent that their expansion strategy was aborted by the eruption of the global health crisis, which prevented the club from fully capitalising on the hefty investment.”
With the foundations of ‘Ronaldo Economics’ seemingly weakening significantly in the latter part of his career, it will now be interesting to see the impact he has at Manchester United. Similarly, the club has invested significantly in an ageing player, who may be less useful to them than strengthening other aspects of their squad – particularly in United’s flaky defensive midfield position. With the Covid-19 recession seemingly giving way to a recovery, however, off the pitch the investment may well pan out better for United than Juve.
