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| 3 minutes read

How can football clubs maximise value from their academies?

The development of young players in academies has always been important to Europe’s leading football clubs, even those less dependent on homegrown talent.

Real Madrid, famed for its lavish spending on the game’s biggest stars, has more academy products playing in Europe’s top leagues than any other club, while Manchester United which, like Real Madrid, is consistently one of the highest revenue-generating clubs in Europe, has named an academy graduate in every matchday squad for the last 80 years.

It is at the tier just below the elite level of European football, however, that academies are most fundamental to clubs’ business models, allowing them to build a pipeline of talent that can be sold at a substantial profit further down the line. The disruptive impact of COVID-19 on traditional revenue streams means optimising academy performance is becoming increasingly critical.

From our detailed analysis of 40 leading European clubs ­in terms of player value creation we have identified the ingredients for best practice in academy development and scouting activity, alongside strategies clubs can adopt to optimise their resources.

Research methodology

Clubs were selected for analysis based on the performance of their academy and/or scouting models during a five-year period, as well as their ability to consistently restrict salary spending throughout this timeframe, which meant that some major clubs, such as Barcelona, Real Madrid, and several Premier League clubs, were not included. Players were included if they were acquired by the age of 23 for less than €15m, and if their current market value (or the price at which they were subsequently sold) was at least €10m above the cost of acquisition.

Portuguese academies perform strongest 
The current Portuguese national squad is packed with expensive stars developed in the academies of Sporting Lisbon and Benfica, including Cristiano Ronaldo and João Félix, so it is perhaps unsurprising these two clubs performed strongly in our analysis, with each boasting six academy products matching our criteria. In fact, 10 of the 14 players to take part in – and win – the UEFA Euro 2016 final featured Sporting on their club CV.

Just above them on our list of clubs with the most high-value academy talents was AFC Ajax with seven players, while Athletic Club de Bilbao (which only enrols players born or raised in the Basque region and is therefore strongly reliant on its academy), Anderlecht, Valencia and Olympique Lyonnais featured with five players.

The 8-to-10-year-old age bracket generates greatest value 

For our analysis, academy recruits were categorised as those acquired aged 15 or under, whereas players acquired from the age of 16 and upwards were deemed to have been recruited through the scouting model.

Our research identified particular age clusters within academy development that lead to greatest value creation. Nearly half (45%) of the players we identified were acquired between the ages of 8 and 10, with another 28% enrolled between the ages of 11 and 13. At an individual club level, there were some exceptions, with clubs such as Athletic Club de Bilbao, R.S.C. Anderlecht and FC Porto achieving greatest value creation from players acquired aged 14-15, while Italy’s Atalanta B.C. had the highest number of recruits in the 5-to-7-year-old age cluster.

Soft skills, stability and scouting networks are key to academy performance
Drilling down further into what makes some of these academies so successful, a number of strategies and practices stand out.

  • Strong local scouting networks and recruiting strategies – a fine example is Athletic Club de Bilbao, which has a network of around 150 local scouts and holds regular scouting sessions for more than 1,000 local players at a time.
  • Equal focus on the two levers of development – these are the technical, tactical and educational levers aimed at developing soft skills. The first two levers are supported by state-of-the-art technology, such as AFC Ajax’s use of 4k cameras and data tracked to a biometric level. In the third, players are given specific tasks and rules to hone skills such as teamworking and professionalism.
  • Provision tailored to the needs of each player – all clubs offer personalised services such as field training, gym, diet and sleep schedules.

Academy productivity can lead to outstanding returns on investment 
While it takes longer to achieve a return on investment than under the scouting model, which we will cover in our final post of this series, the rewards can still be significant, with the average value creation on academy players identified in our study being €28.5m.

There is no certainty as to when football clubs can expect any of their three main revenue streams – matchday income, broadcasting revenue and commercial deals – to return to pre-pandemic levels. However, there is a huge opportunity for them to better understand the role of their academy in making their operating models more sustainable by providing a pipeline of valuable talent for years to come.

The disruptive impact of COVID-19 on traditional revenue streams means optimising academy performance is becoming increasingly critical.

Tags

football finances, football, value creation

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