Europe’s biggest ‘talent factories’ have earned £1.4 billion in just five years

Europe’s five biggest selling clubs have turned themselves into prodigious ‘talent factories’ and earned a staggering £1.4billion in net income from transfer dealings in the last five years.

These treasure troves of skill and artistry are supplying the continent’s biggest spenders with exciting players, like Matthijs de Ligt, Ederson, Joao Felix, Axel Witsel, Fabio Silva, Alex Telles and Rodrigo.

Famous clubs with proud traditions of youth development, Benfica, Ajax, Porto and Sporting Lisbon are at the top of the money tree, but they are joined by Austrian upstart Red Bull Salzburg, which has been powered up the rankings by technology that has clubs from across the continent visiting their state-of-the-art facility.

These are the clubs that honed the skills of the finest players, before placing them on the world’s biggest stages. Their recent graduates include Hakim Ziyech, Donny van de Beek, Danilo and Ruben Dias.

When judging a ‘talent factory’ the key figure is net income – the amount of money made by selling players minus the sum spent on replacement players.

The total fees these five clubs have earned selling their players in the last five years is £2.4bn, while they have only spent just under £1bn in transfer fees to bring in new players, hence a net income of £1.4bn.

In contrast, Manchester City and Manchester United have made a combined net loss on transfers of just under £1.4bn, according to transfermarkt.com.

The concept of the selling club is not new, but these sides have made it an art form and turned themselves into finishing schools for Europe’s high rollers.

The key is to make sure they make much more than they spend in the market, while maintaining a credible challenge in the domestic league and European cups.

These clubs have tweaked football’s traditional business model, which typically targets three sources of revenue: ticket sales, sponsorship/commercial income and TV rights.

The talent factories are focused on a fourth revenue stream: player trading.

So, they invest heavily in their academies, scouting, analytics and coaches.

The leagues they compete in do not generate anywhere near the huge revenues associated with the Premier League, Bundesliga and Spain’s La Liga, so they have to supplement their income with sales.

A club in the Premier League, for example, benefited from average commercial and sponsorship revenue of £1.4bn in 2018; in Germany the figure was £1.2bn; in Spain it was £0.9bn.

However, in Holland the figure falls to £0.2bn per club and to just £0.1bn in both Austria and Portugal.

These clubs have to sell, and sell big, to keep a toe hold in European competition and the rise of the super agents, such as Jorge Mendes in Portugal, have helped them keep driving prices upwards.

We look at the secrets of success at Europe’s five biggest talent factories.

Benfica: Champions of talent development

Portugal’s Benfica won back-to-back European Cups in 1961 and 1962 and not one since, but they remain the champions of Europe when it comes to producing some of the best and most valuable players on the continent.

This summer saw Ruben Dias, 23, head to Manchester City for £64m and he followed 27-year-old Ederson to the Etihad for £35m in 2017.

These players are the latest in a long talent pipeline.

Nemanja Matic, 32, went to Chelsea for £22.5m in 2014, after the Portuguese club had bought him from the Blues for just £6.5m three years earlier.

The Belgian international Axel Witsel, 31, joined from Standard Liege for £8m and left a year later for Zenit St Petersburg for £36m. And Swedish international Victor Lindelof was bought for £2.8m before being sold Manchester United for £31m in 2017.

This summer saw Benfica bring in Brazilian prospects Everton, 24, for £18m, Gilberto, 27, for £2.7m and Pedrinho, 22, for £16m. There will be short odds on them appearing on the transfer market in the next few years at a significant mark up

As well spotting good players and making them better, Benfica grows its own. The most spectacular transfer of the last five years was Joao Felix, 19, who joined Atletico Madrid for £114m in 2019.

The proof of the club’s success is in the numbers.

In five years, Benfica have sold 12 players for more than £20m. The club’s total income from transfers in that time has been £677m, their expenditure on players just £252m, so the net income is an astonishing £426m.

Benfica’s development as a talent factory began in earnest 10 years ago and now it is investing £10m per year in its academy and youth system, which employs 200 people and has 400 players across 20 teams, plus a further five talent centres around the country.

‘Youth development and player trading is an essential part of our business,’ CEO Domingos Soares de Oliveira told Forbes.com. ‘We’ve decided that the area where we have mostly a big recognition in Portugal is on youth development.’

To make sure that continues Benfica hired Pedro Marques in 2018 as the academy’s technical director, prising him from Manchester City, where he had spent eight years in development roles.

Ajax: Playing the long game to be competitive

A decade ago, David Endt, who spent more than 30 years with Ajax, said: ‘Everybody at Ajax has one goal: to make a young player into a great footballer.’

This was at a time when Ajax was rediscovering its mojo. After six years without an Eredivisie title, the first team was winning again in 2010/11 with a side packed with young talent now familiar to English fans: Toby Alderweireld, Jan Vertonghen, Christian Eriksen and Daley Blind.

But Ajax was not standing still, it was stepping on with the opening of a new performance centre that was the envy of top European clubs, allowing assessment of every aspect of a young player’s game. The facility included nine pitches closely filmed to provide a Prozone-plus analysis.

‘We’re adventurous: we attack, create and play with speed,’ Endt continued in a fascinating interview with FourFourTwo in 2011. ‘We’re not developing for other clubs; we’re developing for ourselves. This is football how we want to play it.’

In fact, Endt’s comments are ambiguous. Ajax have developed talent for themselves, which is what propelled them to four Eredivisie titles in the last 10 years and to within seconds of the Champions League final in 2019, when they were knocked out in the semi-finals by Tottenham.

And yet, the business model, overseen by chief executive and ex-Manchester United goalkeeper Edwin van der Sar, demands they sell. They are one of Europe’s top talent factories.

In the last five years Ajax’s profit on transfers is an eye-watering £271m.

In the last two years alone, they have sold central midfielder Frenkie de Jong, 23, for £77m to Barcelona, Matthijs de Ligt, 21, to Juventus for £77m, Hakim Ziyech, 27, to Chelsea for £38m and Donny van de Beek, 23, for £40m to Manchester United.

Looking at that exodus it’s no wonder Ajax have been dumped out of the Champions League in the group stages this year and last.

But the Dutch masters are playing a longer game and they are restocking their first team with exciting talent like Ryan Gravenberch, 18, who already has two goals and four assists this season in 17 games in all competitions at centre midfield.

Gravenberch and his team-mates are already good enough to sit top of the Eredivisie after 12 games.

Porto: Master of the South American market

The source of Porto’s success is to not only to develop young Portuguese players but to buy at lower prices, cultivate talent and sell on for a profit, often extracted by super-agent Jorge Mendes, who has a close association with the club.

It is a tried and tested method, with Porto plucking South American youngsters and fashioning new stars.

Take Brazilian centre back, Eder Militao, 22, signed from Sao Paulo in 2018 for £6.5m and then sold to Real Madrid, almost exactly one year later, for £44.5m.

Or James Rodriguez, 29, now with Everton, who Porto signed from Banfield in Argentina for just under £7m and sold to Monaco, three years later for £40m.

In the last five years, Porto have made a net income off their transfer business of £230m.

This summer’s standout business saw young starlet Fabio Silva, 18, move to Wolves for £35m.

Silva, in contrast to Militao, is a homegrown talent. The young forward starred in the Porto team that won the UEFA Youth League in 2019, scoring in the 3-1 defeat of Chelsea in the final.

It reflects Porto’s commitment to youth that the trophy is now displayed in pride of place in the ‘Hall of Champions’ at the club’s museum, alongside their Champions League and Europa League triumphs.

Portuguese sides are well placed to develop young talent.

The domination of Porto, Benfica and Sporting Lisbon in the Primeira Liga – a stranglehold secured by the wealth that flows from European competition and transfer income – means that these teams gain experience of breaking down massed defences since the other teams in the division cannot take them on at their attacking game.

In addition, Porto and Benfica’s second teams also compete in the second tier, offering their younger players – including members of Porto’s Youth League side – the chance to gain experience in a competitive league rather than in an under-23 or under-21 competition.

Red Bull Salzburg: Technology and talent wins

It is no surprise that RB Salzburg is high on the list of European football talent factories.

The Austrian outfit has taken youth development to another level since it opened its state-of-the-art academy complex at Liefering, wedged between the city’s two rivers, the Saalach and the Salzach.

The club’s academy occupies a site of 12,000 square metres, where 200 young players from seven countries are supported by 120 staff.

Above the door to the high-tech complex, which opened in 2014, is the slogan: ‘Enter the next level.’

The scientific approach inside has attracted representatives from La Liga, Liverpool and the German Bundesliga, it includes microscopic analysis of how youngsters strike the ball in a virtual reality room in which players are filmed receiving and passing and a near weightless running track to build up strength after injury.

The proof of Salzburg’s success can be seen on the pitch, where they have won the Austrian Bundesliga for the past seven years straight, made progress in the Europa League and their youngsters won the UEFA Youth League in 2017.

But it can also be seen in their bank balance. RB Salzburg had a net income on transfers in the last five years of £226.3m with some of Europe’s most in-demand talent graduating from the Red Bull Arena, including Erling Haaland, who moved to Borussia Dortmund for £18m earlier this year.

In addition, a number of top players have moved to Salzburg’s affiliate club, RB Leipzig, much to the annoyance of Red Bull’s fans. They include Naby Keita for £27m in 2016, (who then moved to Liverpool for £54m) and Dayot Upamecano, who moved for just £9m in 2017. Dominik Szoboszlai is also due to make the switch for £18m in January.

Sporting Lisbon: Old-fashioned dedication

Between them, Sporting, Benfica and Porto have shared all but two of the top-flight titles ever won in the country.

The capital city side’s fortunes on and off the pitch have been badly affected by mismanagement, which has seen their star fall, and they have managed only two Primeira Liga title wins in more than 35 years. In the same period the club has suffered spectacular financial losses.

Perhaps that is why Sporting’s prodigious youth system has struggled to sustain the club as a challenger both domestically and in Europe, in the way the other talent factories have largely achieved.

As youngsters enter and leave the Lions’ academy, the words ‘Effort, Dedication, Devotion, Glory’ loom over them, which tells you all you need to know about the club’s proud history and tradition, not to mention the expectation.

That said, it is a formula that works since Sporting’s youth system has produced two Ballon d’Or winners in Cristiano Ronaldo and Luis Figo.

But Sporting’s young stars came and went all too briefly for the fans’ liking.

Ronaldo, 35, left for Manchester United aged just 18, and Nani, 34, followed him aged 21, although he has maintained an on-off relationship with the club after his glory days at the Red Devils were over.

Joao Moutinho, 34, the playmaker who is now at Wolves, hung around a bit longer, but then blotted his copy book by joining arch rivals, Porto, and gaining his big-money move to Monaco prior to landing in the Black Country.

More recently, Bruno Fernandes spent two and half years honing his skills at Sporting after arriving from Sampdoria for £9m, before heading to Manchester United for £68m, including add-ons, in January. Midfielder Joao Mario moved to Inter Milan in 2016 for £36m after joining the club aged 10. He had a brief loan spell at West Ham in 2018.

Two Sporting players have found their way to Leicester: midfielder Adrien Silva moved for £22m in 2017 but finally left on a free transfer to Sampdoria in October, and centre forward Islam Slimani was a big-money signing in 2017 for £30m but has failed to establish himself.