Gareth Bale Madrid Transfer Speculation Raises Questions Over Worth Of Player
The numbers discussed -- $145M or thereabouts -- to bring Gareth Bale to Real Madrid "are staggering," according Gabriele Marcotti of ESPN. As such, how do you "value a player like Bale?" The starting point is how much better he would make Real Madrid and whether you can put a value on it: "the benefit part of the cost-benefit analysis." Because we're dealing with numbers, "you'd look at it in terms of revenues." What added revenue "can Bale bring?"
PRICE MONEY: This one "is quite straightforward." If Bale helps Madrid advance further in the Champions League, "the club will earn more prize money."
BOX OFFICE: Real Madrid "drew nearly 70,000 a game in La Liga last season." There's room for 15,000 or so more per game at the Bernabeu, and of course, "ticket prices can be increased." If Real Madrid becomes more successful, it will draw more (and be able to charge more), "so the concept really is extrapolating how much Bale's presence alone contributes here."
MERCHANDISING: Real Madrid President Florentino Perez "loves to make a big deal out of this, citing the millions of David Beckham and Zinedine Zidane shirts the club sold over the years." It is "tempting to figure that if you sell a million shirts" at, say, $80 a shirt, that's $80M right there. But, in fact, "it doesn't work that way." For every Bale jersey sold, you have to ask yourself this: "Is the purchaser a Real fan who, if Bale hadn't signed, would have bought a shirt anyway?" Even more important is that "when clubs sell a jersey, they keep only a royalty ranging from 10 to 20 percent of the value." And depending on the image-rights contract, "they might have to split that amount with the player."
SPONSORSHIP: Sometimes you will have a player who is so popular that you will "be able to cut better deals with sponsors or attract new ones" simply because he is there. That obviously would not "be the case with Bale." So against all those benefits, you would "weigh up the costs and risks associated" (ESPN, 8/21).