# How much is Cristiano Ronaldo's Instagram account worth?

Cristiano Ronaldo is known to almost everyone as one of the best footballers to ever play. He is also a marketing machine. That inevitably makes him an Instagram influencer. With more than 181 million followers as of August 2019, Ronaldo is bound to make a ton of money simply from his Instagram account.

This brings up the question of how much Cristiano Ronaldo’s Instagram account is worth. Fortunately, any asset with future cash flows can be valued and that is exactly what we venture into.

##### How much does Ronaldo earn from Instagram?

While there is no official source many unofficial sources state that Ronaldo earns close to a Million US Dollars per post. The exact amount is $975000 according to this article on BBC. (https://www.bbc.co.uk/newsround/49124484)

##### How much will these earnings grow?

Making an educated guess with the hope of being conservative, I am going to assume that Ronaldo’s earnings from Instagram will not grow in the future. He is 34 years old and at the twilight of his career. While he is still a phenomenal player, he cannot play forever. As he stops playing eventually his sponsorships will also reduce. Furthermore, Ronaldo has his own brand, which is not included in sponsored posts.

We make the assumption that for the next 5 years, Ronaldo will maintain the same earnings. After those 5 years, his earnings from Instagram will reduce by 8% annually for the next 10 years. There is no data backing behind this and Is merely an assumption.

##### At what percentage will you discount his earnings (Cost of Capital)?

As Instagram account is not equity, we cannot go into deep details into calculating the cost of equity. With companies, we often notice that the cost of equity ranges from 8% - 15%. To keep things simple, we use 12% as the flat discounting rate for this valuation. We use a higher discounting rate simply due to the fact that an Instagram account is not really a business. Instagram has control and not Ronaldo. Due to that reason,

##### What will the terminal value of his Instagram account be?

When you want to end any valuation, you have to estimate the terminal value. One can do so by assuming that every business will run till perpetuity and value the business at perpetuity. This though, is not possible as Ronaldo is only human.

We could estimate his earnings till he turns 80 or 100 but that will be a lot of assumptions for a very long period of time. The biggest one being the fact that Instagram will still exist.

To make things simple, we decided to use a Price to Earnings ratio. Ronaldo’s page will be declining after 15 years and his growth too will be negative. This will lead to a very low PE ratio. We make an assumption and use 5 as the PE.

##### Conclusion

Running a DCF, we estimate the future earnings of Ronaldo’s Instagram account and discount them back to the present at 12%. That gives us a value of close to 312 Million Dollars.

Ronaldo has 181 Million followers as of August 2019 and Instagram followers are the drivers for sponsors to pay huge sums of money to these athletes. Hence, we decided to divide the value of the account by its followers to get the value of each follower. That amounts to $1.7. Revenue per follower will amount to $1.7.