La Liga, Premier League, Real Madrid

Why Spending £150million On Cristiano Ronaldo Makes Financial Sense For Man City

Lots of rumors in the Spanish and British press about a bust-up between Cristiano Ronaldo and Jose Mourinho and that Real Madrid are willing to listen to offers for their best player.

At the heart of the story is the fact that Ronaldo was not happy with Mourinho’s tactics in the first leg of the Champions League semi-final against Barcelona. After the match Ronaldo was quoted as saying this about Mourinho’s system:

“‘I don’t like it, but I have to adapt because that is the way it is.”

Ronaldo joined Real Madrid from Manchester United two years ago for a world-record fee of £80m, and he has been simply brilliant as a Real Madrid player.

Real Madrid rarely, if ever, sell their best players, and I cannot see them selling Ronaldo. But lets assume for the moment that Real Madrid decided to sell him. What would such a deal cost?

Both the Spanish and British press have been suggesting that at £150million (€171million). That is a staggering amount of money and will mean that Real Madrid will have doubled their investment on Ronaldo in two years. From a pure business standpoint, if Real Madrid was to receive an offer that large for Ronaldo, it would be really, really difficult to turn it down.

So who could afford to pay £150million (€171million) for a player? Two of the teams that have been linked with Ronaldo recently have been AC Milan and Manchester City.

Milan owner Silvio Berlusconi has publicly stated that he would love to see Ronaldo in a Milan shirt. But at €171million, I don’t think that Berlusconi has that kind of money unless he raids the Italian treasury.

One person that does have that kind of money is Manchester City owner Sheikh Mansour bin Zayed Al Nahyan, who is a member of the ruling family of Abu Dhabi.

Yes City’s Abu Dhabi owners could easily afford the transfer fee, but would they? Ronaldo salary in England would be over £300,000 a week at Man City. So a five year contract would push the value of the deal at over £225million (€256.5million).

With UEFA’s new financial rules coming into play soon, how could Manchester City break even on this deal?

To sign Ronaldo and break-even on the deal, Manchester City would have to see turnover at the club increase by £45million a year. Coincedently the team that wins the Champions League this year will receive £48m from UEFA. So if Ronaldo takes Man City deep into the Champions League (semi’s or final) each of the next five years, then a £150million (€171million) transfer fee could actually make sense.

Especially since such success on the pitch would translate into higher commercial revenue via sponsors wanted to be aligned with the Man City brand.

So I think you can make a financial case that signing Cristiano Ronaldo for £150million would be a sound business move by City’s owners, if the signing of Ronaldo translated into success on the pitch.