Is Ronaldo Priceless?

That Ronaldo is Europe's most outstanding and showy soccer player would probably be disputed only by a sourpuss. Taking together his performance for his team Manchester United over the last two seasons and his marketing potential, I am unsurprised that other teams are willing to acquire his services at a premium during this transfer season. As this story states, the players is being offered the equivalent of nearly US$ 300,000 per week to transfer to Real Madrid soccer club.

Various articles as this claim that the Real Madrid soccer club is prepared to spend a record €100 million to ensure that transfer. This is a trade that should really go ahead unless his club values him at some figure appreciably above this sum. And yet as Daniel Taylor reports, Alex Ferguson is unwilling to trade the player for any price and is instead prepared to keep him on the substitutes bench in order to frustrate that move.

To my mind, Alex Ferguson is proving here that he is a good soccer manager but has a very poor understanding of finance and economics. It possibly cannot be that the player is too valuable to be sold at whatever price may be offered. In addition, team owners should be concerned that a manager would be willing to pay the high wages and have him rest during match days. Considering the possibility that the team may want to keep the player by all means to keep him from offering his services to a competing club, the fact that the offer and the wages for the player is an appropriate opportunity cost for the acquiring club. In short, Manchester United should price the player and accept the transfer fees. No manager should keep a talented player by all means just to make a point to competitors about not being pushed around. The more astute response would be to establish a reserve price and auction the player to bidders. To blatantly refuse to discuss the sale implies that there is a reluctance to accept that players are assets whose real value can be discovered. However, the madness of the transfer season presents a good platform for testing economic theories.