On the 21st of July, 2024, a young footballer called Endrick who plays
for the Brazilian team Palmeiras will turn 18 years old. When this happens,
it will trigger a transfer that will see the youngster join Real Madrid.
None of this seems particularly unusual. But there are some curiosities here:
at the point in time at which Real Madrid decided to sign Endrick from Palmeiras,
he was only 16 with just over 200 minutes of senior football to his name. And on top of this,
the fee for the transfer is believed to be in the region of around €60 million.
Now, paying more money on a sixteen year-old with barely any senior experience than you might expect
to pay for most professional footballers at the peak of their powers seems like a
high-risk strategy. But it is an approach that Real Madrid have used for a number of years now.
So why might one of the biggest clubs in the world take this approach to youth
development? And more importantly: does it work?
The watershed moment in Real Madrid’s policy of spending big on youth is generally dated
back to the signing of Martin Odegaard, the Norwegian youngster who signed for the club
at the age of 16 for a fee believed to be in the region of €4 million - small
change in comparison to the sorts of fees that are being handed out now.
Odegaard’s time at Real Madrid was largely underwhelming. Although he
became the youngest debutant in the club’s history at 16 years and 157 days old,
he spent most of his time with Los Blancos either injured or out on
loan before moving to Arsenal in a deal worth €35 million with potential add-ons.
What was not underwhelming about Odegaard’s time at Real Madrid was
the bottom line. Having amortised the original €4 million over the original
three years of an eventual six year contract, the final fee from Arsenal was booked as pure
profit. Not bad for a player who made only 11 senior appearances across five seasons.
With this kind of return of investment, it wasn’t a surprise to see a number of youngsters arriving
for fees at the Bernabeu. And those fees kept increasing. In 2017, Real Madrid met
Theo Hernandez’s €24 million buyout clause to bring him across the city from Atletico.
His time at Real Madrid was also underwhelming, the French international picking up more loan
appearances for Real Sociedad in his time than senior appearances for the Real first team. But
even despite the large fee paid out for Theo, with amortisation taken into account, the club
will have booked a small profit when they sold him to AC Milan for €20 million after two years.
Theo was 19 years old when he was signed in 2017 but that same year, Real would take their first
real financial risk for an under-18-year-old. In May of that year, they agreed a reported fee
of €46 million to bring 17-year-old Vinicius Junior from Flamengo to Spain. At the time,
this was the second most expensive sale of a Brazilian player in the history of football
(Neymar being the most expensive). It was also the largest amount received by a Brazilian club
for a transfer, and the highest amount ever paid by a club for a footballer under the age of 19.
Unsurprisingly, the weight of expectation rested heavy on Vinicius Junior’s shoulders. With that
amount of outlay on a youngster, results were expected immediately. And yet it wasn’t until
the 21/22 season that the Brazilian really made his breakthrough in the senior team. Vinicius
ended the season as the second highest scorer for Real with 22 goals in all competitions,
only lagging behind his teammate and future Ballon d’Or winner,
Karim Benzema. Those €46 million are starting to look very well spent.
The arrival of Endrick at Real Madrid, then, is just the next in a long line
of high fee, high potential signings made by the club going back half a decade. But
the year that Vinicius Junior signed stands out as the real watershed moment. Because in 2017,
two high profile transfers took place. In the first place, Neymar moved from Barcelona
to Paris Saint-Germain for a record €222 million. The transfer market wouldn’t be the same again.
But Neymar wasn’t the only arrival in Paris that year. 18-year-old Kylian Mbappe joined PSG on loan
with an option to buy clause valued at around an eye watering €180 million. Although they tried to
bring Mbappe to the Bernabeu, Real Madrid couldn’t compete. They had to change their strategy.
And if they couldn’t compete with developed players, their best bet was to buy the players
before they had developed. This involved financial risk. But it was a financial risk
that the club were seeing covered by the very players that they were signing. The reality
was that even with the underwhelming signings barely covering their own
costs or incurring small losses, the success stories were more than compensating for them.
This summer, Matt Wiltse, the managing editor of the fan outlet Managing Madrid,
calculated that the 22 players under the age of 23 that Real Madrid signed since they signed Martin
Odegaard came at a combined cost of around €460 million. But of those players signed who
have subsequently moved on, Wiltse estimates that - taking into account amortisation - the
club have made profits of around 189% on their initial outlay. So from a financial perspective,
it’s clear that this approach to youth development is working.
But of course, Real Madrid are less concerned about the financial underlying than they are
about the players that they are bringing through being of a level to keep them competing at the
very top of the European game. Those fears are easily allayed with a quick scan through the
Real squad. Eduardo Camavinga. Federico Valverde. Aurelian Tchouameni. Vinicius Junior. Rodrygo.
All of these players were signed young and have made their way into the senior squad.
Will Endrick join them? Well it’s too early to say. But if history has told us anything,
it wouldn’t be a huge surprise.