AFFORD TO SIGN
THE REAL MADRID
It is a deal that could signal a power shift in European football, and the Serie A side believe it is readily affordable
It is the transfer that has got everyone talking: could Cristiano Ronaldo really leave Real Madrid for Juventus?
The five-time Ballon d’Or winner may be 33, but he remains a player at the peak of his powers, coming off a remarkable conclusion to the 2017-18 season in which he scored 23 goals in 13 Liga matches and helped Los Blancos claim an unprecedented third successive Champions League crown.
In an era in which nine-figure transfers are becoming increasingly commonplace, there is, nevertheless, a sentiment that spending €100 million (£88m/$117m) on a player who has repeatedly said that he wishes to continue playing into his fifth decade represents good value for money.
Ronaldo is showing no signs of slowing down and so long that remains the case, he will remain one of the most coveted players in the game and will win over those who believe his longevity and quality already made him one of the greatest ever.
Juventus, though, have been not a club habitually associated with making giant transfers in recent years, and certainly nothing in the order of the coup that they are currently undertaking.
At €90m, Gonzalo Higuain stands by far and away the club’s most expensive addition, having arrived from Napoli in the summer of 2016. Juve have only signed one other player for even more than half that amount: iconic goalkeeper Gianluigi Buffon, who arrived in Turin from Parma in 2001 for €52m.
Further complicating matters are Ronaldo’s wages, which are as great as his stellar appeal. Juventus will offer him a four-year deal that will be worth between €220-240 million, working out around €30m-per-year before tax or €60m-per-year after tax.
That emphasises the efforts the club are prepared to make to break their structure to sign Ronaldo, so how exactly will they manage it?
Firstly, Juve will amortise the transfer. That means that the full value of the deal will not go immediately into their accounts for the 2018-19 season. Instead, it will be split up into equal chunks of four, corresponding to the length of the players deal.
In this case, that means around €25m each year, which in combination with his wages means a total of approximately €85m every 12 months.
The Turin club have been running in profit over the past couple of years. Operating costs have been broadly in line with their annual revenues of €400m per year, and though the amortisation of other transfers costs them around €100m annually, their own player sales means that in the 2016 and 2017 accounts they posted gains of €4m and €42m respectively.
Costs jumped in 2018 due to an increase in amortisation in the current squad, and signing Ronaldo will significantly increase their overall operating costs due to the associated amortisation.
But there is no immediate panic. Financial Fair Play (FFP) is not a major concern for Juve as their costs for years 2017-19 will only be assessed prior to the 2019-20 season.
Only if they have a net transfer spend of €100m this summer will they be put under investigation, and that should be a relatively easy goal to manage.
Falling foul of FFP long-term is more of a possibility, yet it is one that Juventus can sidestep relatively comfortably.
Selling players is the most obvious way to raise a great deal of money in a short period. Higuain would seem to have little future at the club, particularly if they’re successful in signing Ronaldo. Jettisoning the Argentine would liberate around €15m of wages annually, plus his sale should raise around €60m.
Indeed, with the departure of Gianluigi Buffon to be replaced by Mattia Perin, Juve have already made a significant saving.
Ronaldo’s presence, meanwhile, will help generate revenue elsewhere in the business. It is expected that sponsorship and merchandising, for example, will rise in the region of 30 per cent, up from €75m and €19m respectively.
Fans will also have to fork out more to see a player who they applauded as he scored a brilliant overhead kick in Real’s brilliant 3-0 Champions League quarter-final first-leg victory in April. Ticket revenues were already expected to rise more than €10m from €60m this season due to increased prices, but the belief is that Ronaldo will generate even more money in this regard.
Furthermore, a new television deal will see Juventus earn €7-8m more in this domain.
The other major revenue stream, Champions League prize money, is more uncertain. With revenue in the competition increasingly linked to performance, the quarter-finals in each of the next three campaigns will become a minimum, although Ronaldo’s presence will, of course, make it easier for them to achieve this objective.
Juventus could also be lent a hand by their sponsors, who could ‘pay’ Ronaldo’s salary with large commercial contracts. For example, the Portuguese could become the face of Ferrari, effectively meaning the car manufacturer pays his wage for use of the player’s image.
It is not, therefore, too fanciful to suggest that Juventus have the means to complete the deal, although it remains a highly ambitious goal for them. If they get their man, though, there will be no doubt that they will be seen once again as one of the major players in the European game, having become nearly men in recent years.
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