Article:

Funding challenges for academy and youth investment in football

24 February 2021

There is no doubt the Pandemic has heightened the importance of academy and youth investment. Just over half of Clubs responded to say COVID-19 had increased their emphasis on the need for an academy to inject talent into the first team and generate transfer fees. The question is the extent to which Clubs have the funding available to do this. Only 19% of Respondents stated there was an intention to increase their youth development budget for next season, which compares with 57% of Clubs ahead of the 2019/20 financial year.

This mismatch in needs versus intentions is more prevalent in FL1&FL2 where 65% of Respondents highlighted a need for additional academy investment but only 12% are planning on increasing their youth development budget.

In the lower leagues, there is a growing sense that academies are going to be an ever-important avenue for producing first team players as Clubs look to reduce player costs and cut back on transfer fees while still bolstering talent and squad numbers. It is worth noting that academy wages do not feature in the salary cap mechanism, which makes bringing these players into match day squads even more attractive. With all this said, as Clubs look to insulate against revenue reductions without fans in stadia, there is a split between Clubs that either: (i) see the academy as an important contributor to first team squads and therefore acknowledge a need to invest; or (ii) some see it as an operational cost burden which can be scaled-back in the short term whilst Clubs go through an unprecedented period of financial distress.

Interestingly, despite two-thirds of FL1&FL2 Clubs increasing their emphasis on academies to drive success, only 53% of Respondents were expecting to see an increase in academy to first team conversion for the 2020/21 season, compared with 73% in 2019/20. In saying this, the most common challenges these Clubs identified in bringing through talent from the academies were;

  • the medium-to-long term funding required to invest in adequate facilities;
  • the fear of failure/relegation resulting in Clubs not wanting to take a chance on young players; and
  • the perceived availability of talent in the local area to make the investment worthwhile - particularly prevalent in less densely populated areas of the country.

Read the latest Football Finance Directors Report to for further insights into the 2020/2021 football season.

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CONTACT:

DIGBY JACKSON
Manager / Corporate Finance
07966 237369
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