Transfers: Evidence of football's irrational market

Cristiano Ronaldo, Champions League Final, Rome, May 27, 2009 (AFP)
Cristiano Ronaldo, Champions League Final, Rome, May 27, 2009 (AFP)
Financial Times (London)

After more than a year of rumours Manchester United player Cristiano Ronaldo is finally set to join Real Madrid for the unprecedented sum of €93 million. Both in England and Spain commentators are asking whether astronomical transfer fees make any business sense.

Author and sports columnist Simon Kuper has written a column in the Financial Times on the event. Elsewhere, Madrid daily ABC argues that there are "sound business arguments" for the transfer fee paid by Real Madrid for Cristiano Ronaldo, and "what appears to be an overblown price may prove to be a bargain." The report in the conservative daily acknowledges that such a huge sum might appear shocking, especially in the context of the current economic crisis, but it is much less questionable than some of the enormous gains made by speculators in stock and financial markets. In buying Ronaldo and the Brazilian Kaka (for 68 millions euros), Real Madrid chairman Florentino Pérez has masterminded "two media events that confirm the football club as a brand leader, which is far ahead of its competitors," says ABC. The cost of the transfers should be analyzed in purely economic terms, because "football is now a huge leisure industry (…) which forms part of an entertainment market where values are much more predictable than they are on the stock market."

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