Friday, June 4, 2010

Soccernomics: Kids as Capital

Joachim Ladefoged/VII, for The New York Times

This time it really is about economics.  The New York Times Magazine has an absolutely fascinating article on the fabled Ajax youth academy in Amsterdam. What is so interesting is the clear (cynical perhaps) motivation of the academy is to produce the rare exceptional talent so that they can sell him for tens of millions of dollars. This is a business model based on the emergence of winner-take-all markets, of which world football certainly is one.

Here is a couple of money quotes from the article:

De Toekomst is not where you come to hear a romantic view of sport. No one pretends that its business is other than what it is. “We sold Wesley Sneijder for a ridiculous amount of money,” Versloot said. “We can go on for years based on what he was sold for.”


When I observed that for all the seriousness of purpose at De Toekomst, I was surprised that the players did not practice more hours or play more games, Rooi said: “Of course, because they do not want to do anything to injure them or wear them out. They’re capital. And what is the first thing a businessman does? He protects his capital.”


Late one afternoon in the cafe at De Toekomst, I was talking with a coach, Patrick Landru, who works with the academy’s youngest age groups, when he asked if he could take my writing pad for a moment. I handed it over, and he put down five names, then drew a bracket to their right. Outside the bracket, he wrote, “80 million euros.” The names represented five active “Ajax educated” players, as he called them, all of whom entered the academy as children, made it through without being sent away and emerged as world-class players. Eighty million euros (or even more) is what Ajax got in return for selling the rights to the players to other professional clubs. Once a team pays this one-time transfer fee, it then negotiates a new, often very large, contract with the player.

The author tries to relate this to the approach in the US in some convincing, and some less convincing, ways. We are certainly moving away from the romantic ideal that sports are good for kids for their own sake and are more and more concerned about player development but we still view youth sports as virtuous in their own right. But if the Ajax youth academy is a money making venture then there is no reason not to expect that these types of academies will arise in the US, offering free training for the slight chance of a pro career. In fact, it is likely that over time MLS teams will do just this.

But I am not sure that as a parent I would let my kid do it: the off chance of a pro-career does not seem worth the psychological toll on kids and the denial of their youth. Here is a 15 year old kid who is a prospect at the academy:

He said he guessed that probably only two or three of the boys he began with when he was 7 would have pro careers in their sport. “I would feel very bad if I’m not one of them,” he said. “I have tried everything I can do to make it. I haven’t done as much in school as I could. I would feel like I’ve been wasting my time all these years. I would get very depressed.”

I asked if some of what he learned at Ajax — focus, perseverance, the ability to perform under pressure — might benefit him no matter what he ends up doing. “No,” he said, shaking his head. “We’re training for football, not for anything else.”


Jeff Alworth said...

I declare this the Oregon Soccer Blog, as hosted by a professional economist.

Patrick Emerson said...

Fair enough. But the proliferation of soccer stories in the media suggest that I am not the only place being overcome by World Cup fever.

Now, if only we can tie-in beer: who will be the first Oregon brewer with a World Cup themed beer??