Soccer star Ronaldo sold for £80m (€94m, $130m)


The European soccer transfer market is a good example of a market where sentiment often outweighs fundamentals. Research by London’s Cass Business School shows that transfer fees have only a 16% correlation with success on the pitch. They found that salaries were the key driver, accounting for 92% of variation in league position.

Spain’s Real Madrid is a prime example of a club obsessed with transfers. Between 2003-6, they bought very expensive ‘galacticos’, but won no trophies. Now their President from those years, Florentino Perez, has returned. His first moves this week were to buy Ronaldo for £80m and Kaka for €65m. The blog sees this as further evidence that sentiment has become relatively bullish, and will maintain its support for Manchester United, with or without Ronaldo.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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