Most football clubs, however, cannot tell the same story as Ajax. Club CEOs often grapple with quantifying the return on investment in their academy. This is especially true in England, where clubs graded Category One in the Elite Player Performance Plan can expect to spend around £3 million per year on their academy, with some of the biggest clubs often spending several times more.
With the coronavirus pandemic putting a squeeze on top-line revenue, it is understandable that clubs are considering revisiting their spending in areas where the benefit can be hard to see. Just this week, Birmingham City announced that they “will be looking at remodelling the Academy system and exploring a “B and C Team” model” despite having recently sold Jude Bellingham for a significant fee to Borussia Dortmund.
Debuts do not mean much in of themselves
Then take the Blues’ rivals Aston Villa, who since 2015 have recorded €14 million in sales of its academy products, or a little over €2 million a year. That places them 25th in English during this period, below clubs like Huddersfield Town, Fulham, and Swansea City. A superficial view of return on investment would suggest that Villa’s academy simply isn’t productive.
In the absence of meaningful transfer income to assess academy ‘productivity’, the go-to statistics for academy managers are first team debuts and minutes. But this is not a conversation that can be easily grounded in objectivity; debuts do not mean much in of themselves, and playing time needs to be understood through the prism of performance and contribution to the team.
This is of course particularly relevant for Aston Villa, with Jack Grealish being a product of the Bodymoor Heath academy. Grealish was pivotal in the club’s Premier League survival last season, and his continued form this season has even invited comparisons with Paul Gascoigne. Aston Villa may not have sold Jack Grealish – despite numerous suitors – but that doesn’t mean that their academy hasn’t delivered a return on investment.
A healthy financial return
Analytical models can begin to quantify this ‘unrealised’ value in a player. Specifically, we can ask: how much would it cost Aston Villa to acquire a player that delivers the same level of performance as Grealish, and how much more (or less) than this hypothetical player does Grealish cost?
Our player model – which evaluates the performance and value of over 100,000 players globally – suggests that a like-for-like replacement for Grealish today would likely cost Villa in the region of a £40 million transfer fee, and a further £4.5 million per year in wages. After amortising the fee over four years (a typical contract length), we’d expect Grealish’s replacement to cost £14.5 million a year, substantially more than Grealish’s reported £7 million salary.
Though Aston Villa have not sold Grealish, it is likely that they’re getting a healthy financial return on their academy in the 2020/21 season, after accounting for the ongoing operating costs of the academy this year.
We’ve performed this analysis for all Premier League clubs in the 2019/20 season, and combined it with transfer fees received to get a holistic view on academy return on investment. Unsurprisingly, it is the biggest clubs in the country that record the biggest estimated ‘savings’ from their academy; it costs a club like Manchester United a significant amount of money to acquire a first team player, so a starter who comes from the academy with typically much lower wages and without a transfer fee is going to represent a significant cost saving.
We estimate that Manchester United’s player costs last season would have been nearly £60 million higher were it not for their academy, such were the performance levels and costs of Marcus Rashford, Scott McTominay, and Mason Greenwood in particular.