In the first part of this article we looked at what football investors could learn from the dot com bubble. Our conclusion was that it is worth investing in high risk ideas if the potential return is sufficiently large. Keep that in mind as we present some ideas on Game Changing Investments over the coming weeks.  In a recent blog we explored the idea of looking to invest in areas where the potential productivity of football players was high. Problem: Competition for highly talented players has never been higher. Solution: Create your own talent. But how do you find talent? Opportunity creates talent My children go to a very small, state primary school with under 200 pupils. A few years ago the school won some funding for chess coaching and once a week for two years received a  visit from a specialist chess tutor. In those 2 years the school won the inter-schools city championship (beating large private schools) and produced a player who won national tournaments. The talent was always there, it only took the opportunity to unlock it. With football you need to be able to identify where unrealised potential is and create the opportunity for that talent to thrive.  In wealthy nations this happens though the combination of national football associations and an established network of professional clubs. If you are sufficiently talented you will be identified and given an opportunity.  Club sides such as Independiente Del Valle (Ecuador) and Altinordu (Turkey) have shown it is possible to develop a reputation for excellence in youth development even with relatively few resources. But both are in countries with good footballing infrastructure. This isn’t the case in most areas of the world.  But as we know football doesn’t require huge amounts of expensive specialist equipment. Even in the poorest areas of the world children play football. And where children play, talent develops. One person who realised the potential in these areas is Jean Marc Guillou who created opportunity through his academies. Over time he has run projects in Ivory Coast, Mali, Egypt, and Algeria. The projects in Ivory Coast, Mali, and Algeria have been hugely successful.  The Algerian project was run with a club side, Paradou, who are now regarded as North Africa’s best producers of talent. According to TransferMarkt valuations (yes, I know) they have produced over £40m worth of talent in the last 5 years. The Malian academy may end up being the most successful with 7 current Malian internationals having learned there. So it is possible to develop players. There is a repeatable model that has had success in at least three different countries within Africa. There are also other successful models such as the academy who own a European club (Right to Dream and Nordsjaelland) and the European club who pay an African club to develop talent (Metz and Generation Foot). Is it scalable? There is a proven model; find the best talent, provide facilities, education, a long term commitment, and excellent coaching. The key question is can you do this on a larger scale? This is where you will see your “game changing” returns. The JMG academy and Right to Dream models are highly selective, JMG only takes 15 pupils in each intake.  And where would you search for talent? Ideally you want lots of children and a football crazy population. This really means Africa. We tend to underestimate the size of Africa, both geographically and in population growth terms. Consider Lagos. Population estimates say there are approximately 20m people in the city region. 42% of the population are under 14. This gives us approximately 8m children of which 4m will be boys. Doing similar calculations for European countries shows us that there are more children in Lagos than in the entire nation of Spain or Italy and almost as many as in the whole of England.  Nigeria alone has more 0-14 year olds than the whole of the European Union.  Nigeria has the potential to be a global powerhouse.Not just in football but in just about anything where human ingenuity and skill is required. Hundreds of millions of dollars have been invested in Nigerian high tech businesses, with a startup called Paystack recently sold for $200m to a US online payments company. However, as I am writing this piece protestors against police brutality are being shot and killed by security forces. The situation in Nigeria is volatile and as much as we love football it is trivial in comparison.  We also cannot pretend that this would be an easy project or that there aren’t very good reasons why people are not already investing in Nigerian sport development. But we need to look at why Nigeria underachieves in talent production relative to their massive, football crazy population?  Academies already exist, as do professional club sides, Lagos has money and facilities other parts of Africa can only dream of. So what is the issue, it is talent identification? I’m not sure, Victor Osimhen was discovered, and was part of an academy within Lagos, but his story of how he ended up getting picked for Nigeria U17 shows how precarious a young career can be.  No player of Osimhen’s talent should have to rely on chance meetings and 15 minute mass trials after 9 hour car journeys. What players need is a fair chance of success. And for me the opportunity to provide that help comes from providing an infrastructure where you are less reliant on fate for success. Imagine that instead of investing in scouts, or partnering with a single private academy or club (the low risk, low return model) instead money was spent on creating a whole league. Normally you would expect that level of infrastructure to be put in place by the national football association. However, in its absence, there is nothing to stop the creation of an independent, youth orientated league specifically built around the idea of player development. The exact structure of the league would be up for discussions but … Continue reading Game Changing Investments – African Leagues