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There was still suspicion of disbelief floating around the world of football while one of the greatest players had left a private jet to reach the ground of Turin. Even the sight of thousands of jostling to glimpse upon arriving in their city has failed to summarize the remarkable nature of the transfer.
In the words of the legend, Cristiano Ronaldo should play in China, shaking the last few years. coins out of his career through reputation alone.
Players of his age are not handed the keys to a bank safe.
Ronaldo, as he never fails to remind us, is exceptional. This move to Juventus is more than just shirt sales. His new behemoth paycheck is 120 million euros spread over four years and he won it.
His move gave us an interesting opportunity to examine the effect of a supreme reputation on the stocks of a club. Juventus saw a sharp rise as Ronaldo's rumors began to materialize, sparking the interest of many unmotivated fans and pushing them to look into the inner workings of the teams who decided to launch an introduction in stock Exchange.
Why register a football club?
Modern football has long since crossed the Rubicon in the commercial sphere. The listing is the next move.
Clubs would opt for an IPO because it would give them the opportunity to generate income that could be reallocated – often to pay off debts or fund new players and contracts. Manchester United, for example, was put on the New York Stock Exchange by the Glazer brothers in 2012 to generate cash and reduce their debts.
Fan reactions to such movements vary. Some people describe what they perceive as a liquidation, while others revel in the opportunity to buy a share in their most beloved institution.
Serious investors do not share any of these feelings. The club is now a company, a company.
"Modern football clubs would be run like companies, but the listing aspect means that a club is a business," reiterates Joe Tweedie, director of investments and commerce and publisher of the football website Plains of Almería. "Once the extra layer comes into play, the commercial side of the club becomes exponentially important.Clubs can target well-known players that go against their testing pattern, because of the financial implications. Ultimately, the club must strive to continually improve its dividend growth. "
The teams become indebted to the bottom line of their investors. The result is that they can not act with impunity – no careless dive on the transfer market, for example. This contrasts with an owner like Roman Abramovich who, from 2004, was able to throw his money willingly or forcibly until he landed on the right players.
For the sake of the rumor
The surprise move from Ronaldo to the Old Lady was not hazardous. It was a shot considered to acquire one of the planet's top athletes and sports personalities. A sharp rise in the price of shares is a good proof.
For four months from March, it remained stable, hovering around € 0.65. Then, in July, something curious happened.
Portugal had barely left the field after its elimination from the World Cup in Uruguay when a question demanded attention: Would Ronaldo stay at Real Madrid, the same club as he? had guided to a third consecutive place? Rumors have begun to circulate on his next destination: Back to United? Maybe he's going to retire in Qatar? Even Arsenal?
As the rumors of Juventus became stronger, the share price caught on the hot current and slipped regularly. Between July 2nd and 5th, it increased by 20%; one day later, the price reached its 2018 high at 0.88 €. He hovered in this region until July 10, the day when Madrid confirmed the move, when he briefly touched 0.90 €
Those hoping to ride the wave a day before the official statement were left on the shore while the price stagnated. If Ronaldo's value is so great, why did not it explode when the movement became official?
"It was a more and more typical market move," says Tweedie. "The rumor pushes the prices in one way or another and as soon as the speculation began to materialize, the course of the action would increase naturally … Essentially, the price goes up on the rumor and crystallizes on the news. "
can ruin a bank, but the law can support a football club. At the same time, the often false rumors of sports journalists have the power to influence the financial world.
Everything revolves around the image
Ronaldo's movement has undoubtedly caused the leap in Juve's course. But why? He is a five-time winner of the Golden Ball and is an invaluable addition to any team, but is that why investor confidence has increased?
There is a correlation between the success on the ground and the rise in the stock market value. In most European leagues, by finishing higher tranches, TV rights in your favor. Going far in cup competitions prolongs your screen time, not to mention the potential cash prize on offer. Qualification for the Champions League is very important.
In the case of Ronaldo, however, he may be less about his domination on the field and more omnipresence of his mark.
Sports lawyer and regular follower of football finance Jake Cohen argues that those who support Juve in the market Bet on them to become a more comprehensive global entity in the coming years. "If Juventus is able to capitalize on its image," he says, "the signing immediately positions Juventus as a more attractive commercial entity for sponsors and the value of these sponsorships over the next two years will reflect that." you'll see that Juventus' business income increases significantly over the next few seasons. "
The logic is that the CR7 brand is so big that it will take its new home to invisible levels. Already a big club, Juventus has a jersey sponsor and a kit sponsor. As she gains value, she can start attracting companies that previously would not have thought of getting married to the team.
After signing, the experts quickly speculated on whether Portuguese is the missing element will eventually snatch this trophy from the Champions League very elusive. Given that the winner of the series is a champion five times, this does not seem like an unfair prediction. Has this had no influence in the minds of investors? "The rising share price in the lead and shortly after Ronaldo's signing has had little to do with the increased chances of winning trophies," says Cohen. "In fact, Juventus already regularly wins trophies."
It is this pre-existing success that is the key to this equation. The Old Lady has already succeeded. Series A champions each year since 2012, they need little help in this regard. On the European scene, they have played two finals in three years and are regularly the Italian part that lasts the longest – which means that they receive most of the TV revenue allocated to their country.
There is not much to make a financial sense anyway. If Juve continues to raise the Champions League 2018-2019, the price difference, compared to what it has already received, will not be enough to cause a sensation.
It is difficult to overestimate the enormity of Ronaldo's image. Compare when Paul Pogba moved from Juventus to Manchester United in 2016 for a record £ 93.2 million. The French midfielder was young and in demand, but we barely saw a boost on the stock price of one or the other club. It's a huge transfer between two European giants positioned on two different platforms – one listed on the New York Stock Exchange and the other on the Borsa Italiana – and investors do not. have not even looked at their spreadsheets.
Alongside Lionel Messi, a sworn enemy, Ronaldo tracked down the world as a god among mortals. Almost every milestone and achievement imaginable has fallen in its wake. Perhaps it was inevitable that some of the world's largest financial institutions would be charred by the aura of its presence. Its effect on the share price of Juventus is unprecedented and a demonstration of its colossal stature.
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