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Why talent development is critical to a sustainable future for European football

Football has long held a fascination with money that borders on obsession. Yet despite near-ceaseless coverage of the sport’s finances, it has always been a challenge for clubs to make a profit.

Owners have often been required to inject equity or rely on shareholder loans to sustain clubs. But COVID-19 has had a corrosive impact on football finance at every level of the professional game. Some of Europe’s biggest clubs, including FC Barcelona and Manchester United, have reported year-on-year declines in revenue of more than €100m.

All clubs have been forced to consider new ways of managing their resources, with less money to spend on on-field talent. The clearest example of this has been seen in the most recent transfer windows. In the 2020 summer transfer window, the combined value of nearly 1,400 transfer deals conducted by clubs in Europe’s top 5 leagues was around 40% less than a year earlier.

With clubs unable or unwilling to invest so heavily in new players in the prime of their careers – and thus at the peak of their value – the importance of identifying and acquiring talent at an earlier stage has come more sharply into focus.

Our research into the value created by academies and scouting networks across Europe identified best practice approaches and opportunities for the sport’s leading clubs to capitalise on.

Our research methodology

The research - European football – financing a sustainable future through talent development - focused on players whose value had risen by at least €10m above the cost of acquisition. Players were considered in the analysis if they were acquired (either as a result of scouting or having joined their club’s academy) by the age of 23, and for less than €15m.

The analysis covered a five-year period and only included players acquired by Europe’s leading 40 clubs in terms of value creation.

France leads the way in developing valuable talent

One of the key findings of our analysis is that France delivers the gold standard when it comes to developing young players who provide the best return on investment.

France topped the list for the highest number of young talents matching our criteria (45 players) ahead of Portugal, Spain, Italy and Germany. And while French players identified through scouting were on average the most expensive to recruit, they nonetheless generated more value than those from any other European nation (with Brazil, Netherlands, Germany and Portugal following on the list).

Perhaps even more striking was the value generated by players developed in French academies – €41.2m on average. Several of these players now represent the French national team – including Kylian Mbappé, acquired by AS Monaco aged 15 and later sold to Ligue 1 rivals PSG for €145m, and Eduardo Camavinga, who joined Rennes aged 11 and whose estimated market value now exceeds €60m.

Ajax and Atalanta represent the best of each model 

While French players feature heavily in our research, successful academy and scouting models can be found across several of Europe’s major leagues. The top 10 clubs in terms of total value created represent six different European leagues – Portugal, Netherlands, France, Italy, Germany and Spain.

Seven academy products from Dutch club Ajax, which typically recruits children aged 8 to 10, saw their value rise by at least €10m above acquisition costs during the timeframe of our analysis.

Italian side Atalanta, meanwhile, represented the best of the scouting model, with 12 players identified through scouting featured on our list.

The optimum age to acquire talent is 19-21

While children as young as five can join academies in some European leagues, the question of when is the optimum age to acquire players in order to generate the greatest value is not often discussed.  

Our research reveals not only that scouting excellence (acquiring players after age 16) is more likely to lead to value creation than academy productivity, it also shows that the best time to sign players is when they are aged 19-21.

 A key conclusion, however, is that academy and scouting models - and a combination of the two - have much to offer. In future posts we will analyse some of the finest examples of each model, the key ingredients in successful academy and scouting approaches, and the potential implications at different tiers of European football.

"While French players identified through scouting were, on average, the most expensive to recruit, they nonetheless generated more value than those from any other European nation."

Tags

football finances, football, value creation

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