Shares in Juventus FC have doubled since it bought Cristiano Ronaldo, and it's probably only the beginning
- Cristiano Ronaldo is up-and-running in the Serie A goalscoring charts.
- But the Portuguese striker's greatest work is arguably being done away from the pitch.
- This is because shares in Juventus have doubled since his arrival. The club's market capitalisation is now €1.5 billion ($1.75 billion).
- But this is probably just the beginning as the club looks to increase broadcasting revenue, sponsorship revenue, and attract a global audience.
- Fans only care about one thing, though. Success. Specifically: success in the Champions League.
- Juventus head coach Massimiliano Allegri warned that the Champions League is "difficult" but also said that with Ronaldo in the team, they are far more likely to win it.
- Read all of Business Insider's coverage for the 2018-2019 soccer season right here.
Cristiano Ronaldo has officially opened his goalscoring account at new club Juventus FC.
After three matches without a Serie A goal, Ronaldo ended his mini-drought on Sunday when he struck twice against Sassuolo and was rewarded with a score of 8.54 out of 10 by data-crunching soccer website Whoscored.com - his best performance in a Juventus jersey to date.
But Ronaldo's greatest work is arguably being done away from the pitch. "Juventus believes the player presents an unparalleled financial opportunity, described by executives as 'the Ronaldo effect,'" according to a report in the Financial Times.
That effect can already be felt.
Since Ronaldo fever gripped Juventus, the club's share price has doubled from €0.69 ($0.81) on July 3, when credible transfer rumours were first reported across Europe, to €1.57 ($1.84) at the time of writing - that is an increase of 127% and has raised the club's market capitalisation to €1.5 billion ($1.75 billion).
If you had $1,000 invested in Juventus before Ronaldo left Real Madrid CF two months ago, that would be worth $2,275 today.
Before Juventus had even completed the $130 million signing, the club bumped up the average cost of season ticket prices by 30%, according to the FT - and all 29,300 of them are now sold out.
The player's arrival in July whipped fans into a jersey-buying frenzy as 520,000 shirts were sold in 24 hours - approximately $62.4 million worth of trade, and that was before he had kicked a ball.
This is probably only the beginning
That "Ronaldo effect" could continue to reap benefits for Juventus as the club looks to increase broadcasting revenue, sponsorship revenue, and attract a global audience.
The Serie A had its stars in the 2017-2018 season, like Juventus forward Paulo Dybala, Napoli forward Lorenzo Insigne, and AS Roma striker Edin Dzeko, but not one of them can boast the worldwide appeal - or talent - that Ronaldo can. This is crucial in attracting an international audience, which is something the Serie A currently lacks.
This is just one reason why Fabio Capello, who won nine Serie A championships as a player and manager, believes Ronaldo can help restore the Italian league as the premier division in European soccer, rather than just one of the top five leagues alongside France's Ligue 1 and Germany's Bundesliga.
"Finally the world is talking about the Italian league again," Fabio Capello said in La Gazzetta dello Sport earlier in the summer, according to the BBC.
"In the 80s and 90s we represented the top. Then we lost our way and weren't capable of investing in infrastructure. With Ronaldo we can attempt to lift our head up," the 72-year-old said. "We need to have the strength and intelligence to exploit the Ronaldo stimulus and give our game an impulse again."
The Italian league generates €1.4 billion ($1.63 billion) a season from domestic and international broadcasting rights which is a far cry from what the Premier League pulls in (€3.3 billion / $3.86 billion). But "the global celebrity of Ronaldo is expected to drag fans and corporate groups to Juventus, with higher broadcasting money to follow," the FT says.
The BBC estimates that TV rights "are now probably worth 20 to 30% more" than they were before Ronaldo joined Serie A, so this means the league could, in theory, negotiate a deal worth €1.82 billion ($2.12 billion) when the current contracts expire at the end of the 2020-2021 season.
Juventus could also generate €255 million ($298 million) a season (up from €200 million / $233 million) providing it performs well in the UEFA Champions League - a tournament it has not won since 1996.
Ronaldo is contracted at Juventus until 2022, so if Juventus enjoyed sustained runs in the competition for each and every year of Ronaldo's deal, then that alone means a €1.02 billion ($1.2 billion) fortune from broadcasting rights in Europe's premier club competition.
YouTube / Goal
It is hoped that Ronaldo's presence will be the catalyst for greater sponsorship revenue, according to the FT.
The club's kit is manufactured by sports retail giant Adidas and sponsored by American automobile firm Jeep. The Adidas deal is worth €23 million ($27 million) a year, according to KPMG, while Jeep pays Juventus approximately €17 million ($20 million).
The increased sales in Ronaldo jerseys at Juventus will mean the club is in a greater position to negotiate a better contract - something it is already discussing, according to the FT, while the Jeep renewal on improved terms will be struck "in the coming years."
Serie A and Juventus lack one thing that Ronaldo is renowned for - an international pedigree - and the club will be hoping to piggy-back off of the player's fame worldwide.
When Juventus president Andrea Agnelli first joined the club in 2010, the FT says he was determined to attract "a new, global audience." With Ronaldo, he is a huge leap closer to building "the world's pre-eminent team."
Indeed, Ronaldo's global celebrity will not hurt the club's own brand. After all, he is one of the planet's most popular athletes on social media with over 330 million followers on Facebook, Instagram, and Twitter. Just one Instagram post on Ronaldo's channel can be worth up to $5.8 million to his personal sponsors like Nike.
When Ronaldo first joined Juventus, he brought 1.5 million new followers to the club's social media channels in a single day - and Juve's accounts continue to gain new fans.
Making new fans is what Ronaldo does well. After Ronaldo transferred to Juventus, he embarked on a personalised "CR7 Tour" of China on a Nike-branded jet where he trained with young soccer players in front of local fans.
And Juventus is looking to engage with soccer fans in similar territories. According to the FT, Giorgio Ricci, head of global partnerships at Juventus, said the club has been holding talks with six "regional" sponsors in China and south-east Asia.
In many ways, it seems like a match made in heaven.
But fans only really care about one thing
Success. Specifically, success in the Champions League.
Ronaldo won the tournament once with Manchester United and four times with Real Madrid. As a five-time winner, he is amongst the competition's most decorated players alongside other five-time champs Paulo Maldini, Alessandro Costacurta, and Alfredo di Stefano.
Signing Ronaldo is no guarantee of success, but considering he is the tournament's top scorer with 115 goals, he can certainly help.
And success is certainly something the club's top brass has their eye on. Massimiliano Allegri, the club's head coach, said that the competition "is difficult and unpredictable."
But: "With Ronaldo, we are far more likely to win it."