Market Insight: Death of the Non-Elite Academy

Market Insight: Death of the Non-Elite Academy
Following the release of our annual Soccerex 20 under 21 report, there were a number of emerging themes, but one potentially alarming trend that stood out was that of the lack of players that were developed through non-elite academies. We take a look here into the possible reasons why this might be and the potential long-term ramifications.

In times gone by, before elite Clubs had the extensive scouting infrastructures that now accompany the professional game, non-elite clubs were still in a position to develop local talent through their academies, safe in the knowledge they had time to nurture a player to the level that would see them break into the first team, in most cases the club would receive some form of transfer fee if said players was to be snapped up by a ‘bigger’ club.

In these heady days where there is ever-growing demand for the next ‘Messi’, ‘Ronaldo’ or even the next ‘Mbappe’ (which seems strange to say whilst he is still only 20!), elite level Clubs are not only investing heavily in youth coaching and development, but also on the identification and scouting of the best young talent from all around the world. When you add into the mix the broad array of state-of-the-art academy facilities that many elite clubs now have in place, you can understand where the temptation for young players to move on arises from.

The movement of young players up the football pyramid is nothing new. In many cases, at lower league clubs across Europe, the sale of exciting young players that they have developed is often part of their business strategy, with players sales forming a strong source of revenue in the absence of the big bucks that come from the TV deals in the top leagues.

There is a growing issue however, arising from the fact that elite clubs now are far more willing invest in potential at a far younger age, meaning that once they have identified such talent, a junior can be as young as 9 years old when they can be officially signed to an elite academy, although many top clubs have pre-academy sides starting at U5’s.

The fact that a club cannot secure a young player to a professional contract until they are at least 16 years of age means that before this point, it is far easier for a top-level club to prize them away from their current club. Whilst smaller clubs’ are entitled to compensation in cases such as this, many within the game feel that this quite often doesn’t equate to their true value based on the considerable investment and time that a club of this nature may invest in developing a player from a very young age.

A prime of example of this is highlighted by the case of Jadon Sancho, who finished second in the top 20 of our report. When Sancho decided to head for pastures new in Germany back 2017, many gave full credit to Manchester City for the development of the exciting young prospect. In actual fact, the current Premier League champions signed him at the age of 14 after he had spent the previous 8 years as part of the academy at Watford FC. The fee at the time as calculated under the Premier League’s Elite Player Performance Plan (EPPP) was a mere £66,000.

The EPPP is a youth development initiative that was first introduced by the Premier League and then accepted by all EFL Clubs following a vote in 2011. The main aim of EPPP was to ensure that professional football across England had a world-leading academy system, but it has come under scrutiny with some suggesting that the system serves the elite level clubs better than those in the lower leagues.

There has in fact been something of a role reversal in England in recent times, with Premier League clubs now looking to invest far more heavily in developing youth and attracting young talent, whereas the EPPP seems to have led to lower leagues clubs increasingly looking at transfer options as a cheaper alternative to investing in their academies.

Coupled with the rules outlined in the EPPP on academy players, quite often even when lower league clubs are able to secure young players to professional contracts, this doesn’t always ensure that the club in question receives a windfall should this player leave in future. Under the current rules, if a young player is lured away by another club at the end of their contract but is still under the age of 24, the first club again is entitled to ‘training fee’ compensation, but again, this can quite often be far lower than the fee they would have expected to receive in an actual transfer deal.

So where does this leave non-elite academy development? In recent years, a worrying number of lower league clubs have taken the step of doing away with their academy set-up, some in favour of introducing a ‘B team’, with some as high up as the English Championship no longer seeing the return on investment from developing their own young players. In fact, the broad network of young players that elite level clubs are now taking on is so far reaching, in some cases that the big clubs appear to be merely stockpiling talent, which can be counterproductive to their development based on limited chances for much-needed first team action.

This stockpiling is actually proving to be a driving factor in the decision of some non-elite clubs that decide to close their academies, as the formation of  ‘B teams’ as an alternative is only made possible when they are able to recruit the young players (in reverse) that the elite clubs deem as not good enough to progress any further and are subsequently released.

The long-term issue that could develop from this relatively new trend is that with evermore lower-league clubs no longer seeing the value in maintaining their own academies, it’s possible that in future this may result in young talent in the more remote areas of the UK going undiscovered.

Whilst elite clubs do have extensive networks, it’s not realistic for them to be able to cover all four corners of the globe and therefore, this tactic of poaching young talent could work against them if this was to lead to a reduction in the discovery of elite level young players from non-elite environments, as with a reduced supply this could lead to a surge in the fees paid for young players.

Although this year’s report would indicate that the youth transfer market is somewhat levelling out, it’s quite possible that the implications of this new trend have already started to take hold when you take into consideration the very recent transfer of Joao Felix to Atletico Madrid. While Madrid will have invested heavily in their own youth development policy, the club were still willing to fork out a considerable fee for the young Portuguese; a full 45million euros above our valuation of the player, and this is based on one particular key ingredient; potential.

In summary, it could be suggested that until more is done to ensure that non-elite clubs are adequately compensated when they lose an exciting prospect, you are likely to see more lower league clubs moving away from the traditional academy model as the heavy burden of cost overtakes the necessity to develop local talent. There are even arguments to suggest that this will only see the gulf between elite and none-elite clubs widening even further.

So what are the broader implications of this and could this have a knock-on effect on European football? With the power and money that the Premier League now possesses, it’s understandable why this would attract young European talent as well as homegrown. It is not hard to envisage a time where “lesser” clubs across Europe get fed up with seeing their best young talent move to a select elite few and feel they can no longer achieve the return-on-investment they require to keep their academies going. Only time will tell, but it will be interesting to see how this develops in the coming years.

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