Such is the financial gulf between Italian giants Juventus and their Dutch opponents that the share price of Juventus Fc SpA (JUVE) sunk like a stone immediately after the game. The selloff signals a lack of belief among investors that the ‘Ronaldo Project’ is going to pay off, and raises questions about the future of the club on and off the pitch.
JUVENTUS STOCK PRICE PLUNGES ON CHAMPIONS LEAGUE EXIT
The Juventus stock price fell suddenly and brutally on Tuesday evening in the wake of defeat against Ajax. Shares in JUVE fell from a peak of €1.7145 ($1.92) all the way to €1.3195 ($1.48) in the hours after the game – 23% decrease.
A healthy rebound of 7.6% awaited anyone brave enough to buy the dip, however the rebound was short lived. The stock price continued to sink leading into Thursday, April 18th.
The dilemma which now faces Juventus investors is one which, directly or indirectly, centers around one man: Cristiano Ronaldo.
How do you solve a problem like Cristiano?
When Juventus signed a then 33 year-old Cristiano Ronaldo in the summer of 2018, it signalled an intention by the club to push ahead on the European front. Juventus had reached the UEFA Champions League final on two separate occasions in the past 4 years – both times losing out to Spanish opposition (Barcelona in 2015; Madrid in 2017).
Costing $100 million for his signature, $12 million in additional fees, and $31 million a year in wages (3 times more than any other player in Italy), ‘project Ronaldo’ was a serious undertaking by a club operating in a football league not known for its wealth.
Yet most of that money was made back within the first few months of Ronaldo’s arrival at the club. Nearly $60 million worth of Ronaldo merchandise was sold in the first 24 hours after his signing, while Juventus also issued bonds worth $169 million in February to capitalize on the striker’s success in the Italian Serie A this year.
Indeed, Ronaldo has been exceptional in the Italian domestic league, scoring 19 goals and registering 8 assists, and helping Juventus to a 17-point lead over second-placed Napoli. The problem is… that’s not why he was hired.
The burden of housing a legend
Juventus are an ageing team who have won their domestic league title for 7 years in a row, and will soon add their 8th. In adding a 34 year-old living legend to their team one could argue that they’ve done themselves no favors in the long run. Juventus did not need Ronaldo to win Serie A again. They needed him for the Champions League – and now that opportunity is gone.
In fact, it’s difficult to imagine Cristiano Ronaldo continuing his evergreen form right into this time next year – the soonest opportunity Juventus have to grab Champions League glory. Selling Ronaldo is not an option: the team must be built around him, and that means signing players with youth, speed, pace and agility to complement the ageing, but still clinical Ronaldo.
Such a restructuring of the squad will cost hundreds of millions at the very least. As for the Juventus stock price, it has proved very responsive to on-field results in the past; pumping 17% when Ronaldo scored a hat-trick and knocked Atletico Madrid out of the Champions League earlier this year. The decisions made by the board in the summer when the transfer window opens will no doubt have a say in the stock price once again.