Why Football Academies are so important?

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Football, relies heavily on having a stable financial environment and the appropriate structure to support the coaches, the players and the staff. While the spotlight often shines on the glamour of top-tier professional football, the foundation of any successful club lies in its academy system. In this article, we discuss the importance and numerous benefits of clubs investing in their football academies. Football academies and sports schools provide young players with structured training, higher education, and opportunities to progress through the ranks of a club’s youth system.

The Importance of Football Academies for Clubs

Investing in football academies plays a pivotal role for clubs, serving as a cornerstone for their sustained success and long-term viability. By nurturing talent from within their communities, clubs establish a pipeline of homegrown players who embody the club’s ethos, values, culture and playing style. These homegrown talents often possess a deep-rooted connection to the club, instilling a sense of loyalty and commitment that transcends financial incentives.

While purchasing established players from the transfer market may offer immediate success, it often comes at a substantial cost. The expensive transfer fees associated with acquiring experienced or overrated players can strain a club’s financial resources. In contrast, developing players through academies proves to be a more economically prudent strategy in the long run. By investing in the holistic development of young talents, clubs not only save on transfer fees but also cultivate a sense of identity and continuity within their squad.

Moreover, academy graduates serve as valuable assets for potential future transfers, contributing to the club’s financial stability and sustainability. The revenue generated from the sale of players coming from the club’s youth system, can provide a significant income flow of funds, which can be reinvested into the academy itself or allocated towards strengthening other areas of the club. This self-sustaining model reduces the club’s reliance on external funding sources, fostering a sense of autonomy and independence. Additionally, it can help a team overcome a season where they may not achieve success in terms of winning trophies.

In essence, football academies play a pivotal role in shaping the trajectory of a club, both on and off the field. Beyond just producing talented players, they serve as incubators of club culture, instilling values of loyalty, dedication, and community engagement. By investing in their academies, clubs not only secure their future talent pool but also safeguard their financial well-being, ensuring continued success for generations to come.

Benefits of Investing in Football Academies

Clubs renowned for their commitment to youth development earn not only silverware but also admiration from fans and stakeholders alike. By investing in academies, clubs showcase a dedication to nurturing talent and contributing positively to the future of the sport. This commitment resonates with supporters, building a sense of pride and loyalty towards the club. Moreover, a strong emphasis on youth development aligns with broader societal values, enhancing the club’s reputation as a responsible corporate citizen.

Source: Ajax

The financial benefits of investing in academies are undeniable. Successful academy graduates often brings in significant transfer fees when eventually sold to other clubs. According to FIFA’s Transfer Matching System, academy-bred players accounted for approximately 12% of global transfers in the last five years, with an average transfer value of $10 million per young player. These transfers not only inject funds into the club but also serve as a testament to the effectiveness of the academy’s player development programs. Furthermore, the ability to produce and sell high-quality talent strengthens the club’s financial position and long-term sustainability.

Many football associations push clubs to prioritize youth development as part of their licensing requirements. Investing in football academies not only ensures compliance with these regulations but also fosters a culture of talent development within the club. By providing young players with access to top-tier football coaching, facilities, and educational support, clubs fulfill their obligations to nurture the next generation of footballing talent. This focus on youth development not only benefits the club but also contributes to the overall growth and health of the sport.

The financial aspect of Football Academies

In today’s football landscape, the traditional approach of building a dynasty through youth development is becoming increasingly obsolete. Historically, clubs like Barcelona, Milan, Ajax, and Manchester United built their success on nurturing talent from within. However, in the modern era of football, youth academies are more about generating revenue than cultivating future stars.

Recent success stories highlight this shift: Cameron Archer scoring for Sheffield United after leaving Aston Villa’s football club, Billy Gilmour shining for Brighton instead of Chelsea, and Cole Palmer moving to Chelsea after being a promising talent at Manchester City. Financial dynamics play a significant role in this trend, with academy graduates representing pure profit when transferred, thanks to their minimal book value.

Source: BEIN sports

Clubs now prioritize cashing in on young talents rather than integrating them into the first team. Even established players like Mason Mount are not immune to being sold for profit, with Chelsea netting £55m for him. This strategy allows clubs to reinvest in cheaper, often foreign talent, aligning with the demands of global football markets.

Manchester United, Chelsea, and Manchester City, all United Kingdom top class clubs, have all capitalized on this trend. They have built a process whereby they can sell an academy player for a substantial amount of money. For example, Manchester City earned significant sums from selling players with minimal first-team experience, demonstrating the lucrative nature of youth development in today’s game.

Establishing and maintaining a football academy requires substantial initial investment in infrastructure, coaching staff, and facilities. The table next (Study by Deloitte – 2018) to this text displays the ten highest transfer fees received by English clubs for players from their academy during the 2017/18 season’s transfer windows. It’s noteworthy that all these transfers originated from EPPP (Elite Player Performance Plan) category 1 academies. Considering that the typical annual running cost of a category 1 academy is approximately £4 million, the values obtained suggest that just one significant transfer is sufficient to cover these expenses for several years.

Source: Deloitte Analysis

Clubs often find themselves in strong competition for promising young players, necessitating strategic scouting and recruitment efforts. The Premier League alone spends over £380 million annually on youth development, reflecting the intense competition for talent acquisition.

Youth academy players must juggle between football training schedules and academic responsibilities, highlighting the importance of providing holistic support systems. Research indicates that approximately 60% of academy players pursue further education alongside their football commitments.

Strategies for Effective Academy Investment

Clubs should implement well-rounded development programs focusing on technical, tactical, physical, and mental aspects of the game. According to UEFA, clubs with structured youth development pathways experience a 65% increase in footballer retention rates.

Engaging with local communities and schools fosters grassroots talent identification and strengthens the club’s ties with its fan base. Football academies should align their training methodologies and philosophies with those of the senior team to facilitate seamless player progression. Bright examples are Barcelona and Ajax, two clubs that have a clear structure and playing philosophy that is instilled from the grassroots all the way to the first team.

Best Academies in Producing Talents and Their Impact

The 446th CIES Football Observatory Weekly Post presents the 100 clubs with the most profitable academies in the world in terms of revenues generated over the last ten years by the transfer of players who spent at least three seasons there between the ages of 15 and 21.

Portuguese side Benfica are clearly in the lead with €516 million, two thirds of which has been collected in the last five years.

Ajax (€376 million) and Olympique Lyonnais (€370 million) complete the podium. As in the case of Benfica, the majority of Ajax’s revenues from the transfer of players from its academy has been generated over the last five years (68%). Despite transfer price inflation, this percentage is much lower for Olympique Lyonnais (50%).

Also in the top ten are three English Premier League clubs (Chelsea, Tottenham and Manchester City), a second Portuguese team (Sporting CP), as well as Real Madrid (4^th), AS Monaco (6^th, largely thanks to the revenues from Kylian Mbappé’s transfer to Paris St-Germain) and Italy’s Atalanta (10^th). Outside Europe, the clubs with the most profitable academies are Brazil’s Flamengo (thirteenth) and Argentina’s River Plate (fourteenth).

Dinamo Zagreb is a notable example. The total amount earned was €193 million, but it could be much higher. Due to the team playing in a less popular championship, their selling power is significantly lower than that of other clubs competing in more affluent leagues. An important statistic worth mentioning is that 69% of the youth players sold in the last decade were sold within the last 5 years, indicating that the academy has been operating at a high standard in recent years, even against more wealthy and powerful clubs.

Another example is Manchester City. The number of players emerging from their academy has exponentially increased in the last five years, accounting for 81% of the last decade. Undoubtedly, the tenure of Pep Guardiola as their manager since 2016 has played a pivotal role. Guardiola’s background and his staunch belief in nurturing new talents align with his philosophy that only players rooted in the team’s culture and ethos can effectively execute his style of play. This strong belief has encouraged the club’s academy to work harder in recruiting, providing high quality football training sessions, and helping young talents grow and develop their football skills.

Perhaps the brightest examples of Manchester City’s academy success are two players who have enjoyed exceptional performances in the 2023-2024 season. Phil Foden has scored 24 goals and provided 10 assists in 48 matches, while Cole Palmer, who was sold to Chelsea, has contributed with 25 goals and 13 assists in 43 games. Their performances not only underscore the effectiveness of Manchester City’s academy but also validate Guardiola’s emphasis on promoting homegrown talents within the team.

Source: BBC

See below the revenues generated by the transfer of academy players. The list presents the top 20 clubs from 2014 – 2023 (€ Millions, Including add-ons regardless of their actual receipt).

1. SL Benfica (POR) – 516€M – Last 5 years: 65%
2. AFC Ajax (NED)- 376€M – Last 5 years: 68%
3. Olympique Lyonnais (FRA) – 370€M – Last 5 years: 50%
4. Real Madrid (ESP) – 364€M – Last 5 years: 56%
5. Chelsea FC (ENG) – 347€M –  Last 5 years: 88%
6. AS Monaco (FRA) – 325€M –  Last 5 years: 20%
7. Sporting CP (POR) – 306€M –  Last 5 years: 38%
8. Tottenham Hotspur (ENG) – 256€M –  Last 5 years: 65%
9. Manchester City (ENG) – 254€M –  Last 5 years: 81%
10. Atalanta BC (ITA) – 250€M –  Last 5 years: 51%
11. RB Salzburg (AUT) – 249€M –  Last 5 years: 82%
12. PSV Eindhoven (NED) – 248€M –  Last 5 years: 75%
13. CR Flamengo (BRA) – 228€M –  Last 5 years: 71%
14. River Plate (ARG) – 223€M –  Last 5 years: 64%
15. FC Porto (POR) – 221€M –  Last 5 years: 59%
16. Real Sociedad (ESP) – 218€M –  Last 5 years: 53%
17. Bayer Leverkusen (GER) – 214€M –  Last 5 years: 64%
18. Paris St-Germain (FRA) – 212€M –  Last 5 years: 82%
19. Aston Villa (ENG) – 203€M –  Last 5 years: 93%
20. Liverpool FC (ENG) – 199€M –  Last 5 years: 46%

These statistics showcase the financial prowess and success of various football academies in nurturing and developing young talents, ultimately benefiting both the clubs and the players themselves.

Conclusion

In conclusion, investing in football academies is not only a sound business decision but also a testament to a club’s commitment to its future. By nurturing young talent, clubs ensure sustainable success while enriching the sport’s landscape.