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The Economic Impact of Cristiano Ronaldo's Transfer to Manchester United

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September 10, 2021
Written by: Rana Ghosal

The Summer 2021 window will always be remembered for the two biggest shock transfers. First was Messi whose move to PSG came as a jolt to the entire world. And just as football fans began settling down to the new reality, the news of Cristiano Ronaldo joining Manchester United arrived. Both sudden and catching everyone completely unaware.


After a prolonged link-up with Manchester City, a sudden move by its rivals snatching Ronaldo sent shockwaves to the entire football community, so much so, that on the day of news confirmation, Manchester United’s stock soared by 8% at one point of time increasing market capitalization by £212 million before settling to $18.29 at the close of the day, still 5.8% up.

 

 

Manchester United fans have been rejoicing ever since. And on September 11th a packed Old Trafford will be welcoming their idol back after 12 years since he left the Theatre of Dreams.

Many experts have been unconvinced about Manchester United’s move to secure Ronaldo arguing about the already-packed forward lineup comprising Mason Greenwood, Marcus Rashford, Anthony Martial. Keeping the on-field debate aside, however, we look at the various off-field factors and explore the underlying benefits Ronaldo brings to Manchester United from a business standpoint.

 


Immense personal brand equity

To say that Ronaldo is a global sports phenomenon would be a cliché, although what else can be said about the sportsman with the highest number of goals (785), consistently in the top 3 highest-paid athletes on a yearly basis, and the sports star with highest social media followers. That gives an idea about the ‘phenomenon’ we are talking about.

To compare Ronaldo's massive global appeal we have contrasted his social media following with other entertainment icons. As we can see, his social media reach is larger than numerous well-known singers, actors and celebrities. 

 

 

He leads the table with 517 million followers, more than music icons including Justin Bieber at 455 million and Ariana Grande at 429 million.

Moreover, taking a stock of the change in social media following of Manchester United within 7 days of Ronaldo joining, there’s an addition of 3.73 million followers or 2.43% positive growth. 




Keep in mind that this is for an already-strong Manchester United brand, 11th ranked in the Forbes 2021 Most Valuable Sports Brand list with a brand value of $4.2 billion, and already having 153.58 million social media followers from across the world.          


Marketability

Ronaldo endorses a range of brands in his personal capacity, including Free Fire, DAZN, MTG, Pestana CR7 Lifestyle hotels and others earning him approximately $44 million in 2020.

 

 

It can be safe to assume that same brand power will lead to substantial value addition to Manchester United’s sponsorship revenues.

 


Manchester United’s sponsorship revenues have been constant for the past four years. They currently have 23 global partners, 13 financial partners, 9 media partners and three regional partners.

Recently the training ground / kit sponsorship discussions with The Hut Group collapsed over the fan protests against The Super League / Glazer ownership. Also, there are several commercial deals nearing their end and it is expected that United will benefit from:

  1. Increased number of global sponsorships
  2. Increased number of regional deals
  3. Possibility of converting regional discussions to global deals


Image rights

There’s another aspect to the ‘Ronaldo influencing factor’ at Manchester United, his image rights. It could be a factor in any club sponsorship discussion with brands.

Ronaldo sold his image rights to Singapore businessman, Valencia CF owner and part owner of Salford City, Peter Lim in 2015 in a six-year lucrative deal which is scheduled to end in 2021. Whether it would be renewed or a new deal signed remains to be seen but we can be assured that Manchester United would be keenly looking at the development.

What happens in the coming season is for all to see but one thing is for sure, Ronaldo and Manchester United have teamed up again and fans expect the Red Devils to relive their glory days.

In a heartwarming Instagram message, Ronaldo said, “Sir Alex, this one’s for you” so we know comeback is special for all involved. 

 

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Image source: Manchester United

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