FC Porto: The world’s most efficient “Moneyball” football club

In the world of football, many clubs are using the “Moneyball” strategy; and one of the most efficient in this is FC Porto. Porto constantly sells their best players, while always finding new ones to ensure a continuous success. Their economic and competitive achievements during the last fifteen years are extraordinary.

Abstract

The aim of this research is to describe and analyze the example of FC Porto’s strategy: considered to be one of the most efficient football clubs in Europe, they are following a modus operandi that is based on the “Moneyball” model. Through the years the Portuguese club has followed a successful path of scouting, finding and buying (usually in low cost) young talented players mostly from South America (players like Radamel Falcao, Hulk, Anderson, Luis Fabiano, Lucho González and Thiago Silva) and Europe. Porto invests in them and their development and after a few years sells them at a much higher price to other teams. What makes Porto remarkable is that they are implementing this model combining it simultaneously with successes in gaming achievements and are winning trophies. Nowadays, Porto is recognized as one of the best football clubs in Europe, with a global reputation and outstanding successes particularly over the last fifteen years. Moreover, the researcher will make an analysis of Porto’s league position and achievements during the last few years, followed by an analysis of its best and most expensive sales to date. Finally, the last part of the research will be a thorough look into Porto’s upcoming talents.

Introduction

FC Porto is a Portuguese sports club based in the city of Porto, playing in the Primeira Liga, the Portuguese top football division championship (they have appeared in every season, since the establishment of the league in 1934). The team was founded in 1893 and is considered one of the “Big Three” teams in Portugal, together with the Lisbon-based rivals Benfica and Sporting CP. Porto is the second most decorated team in Portugal, with a total of 74 official trophies. In international competitions, Porto is by far the most successful Portuguese team, with a total of seven trophies; of which, the most important are the Champions League in 1987 and 2004, the Europa League in 2003 and 2011 and the UEFA Super Cup in 1987. Together with Barcelona and Real Madrid, Porto has the most appearances in the UEFA Champions League group stage (21). At the end of the 2016/17 season, the Dragons (Porto’s nickname) ranked 13th in the UEFA club coefficient ranking. Porto has built its dynasty by following the “Moneyball” strategy. In other words, Porto is investing on young talented players and then sells them at much higher prices to other teams, maximizing its profits while avoiding sacrifices on its competitive achievements.

Methodology and Data Collection

For the purposes of this research, all data that was collected and analyzed is limited to the last fifteen seasons, from 2002/03 until 2016/17. The data concerns Porto’s position in the Portuguese league and the points they collected during the abovementioned span of seasons. Only data from the regular season of Primeira Liga were collected. Furthermore, the researcher gathered and analyzed (for the same seasons) data about Porto’s economic analysis focused only on the players bought and sold. Finally, the last part of the methodology is an analysis of the Dragons’ top10 most expensive sales to date.

A few more words and interesting stats for Porto

Porto, as mentioned above, is the second most decorated football team in Portugal, with 27 Primeira Liga titles, behind only Benfica with 36 titles. Furthermore, Porto has 16 Taca de Portugal (Portuguese Football Cup) and a record of 20 Supertaca Candido de Oliveira (Portuguese SuperCup). As of the 2017/18 season, Porto has won a total of 74 official titles, of which 67 are domestic and seven were obtained in international competitions. An interesting stat for Porto is that it is the only team in the Portuguese league history to have won two titles without any defeat, namely in the seasons 2010/11 and 2012/13. Moreover, the Dragons are the only Portuguese club to have won the Europa League, the UEFA Super Cup and the Intercontinental Cup; and to have achieved a continental treble of domestic league, domestic cup and European titles (2002/03 and 2010/11). In the current season 2017/18 Porto is currently in the first position with 76 points (2 points ahead of Benfica), aiming to win its 28th Primeira Liga title (that will be the 10th during the last fifteen years).

The area graph below presents Porto’s performance in the Primeira Liga during the last fifteen years.

A main observation of the results is that typically Porto is among the best two teams for the title and has received the third position in the league only three years over this fifteen years span. In total, it has won 9 titles from 2002/03 to date and has finished in the second place 3 times.

The area graph below, presents Porto’s collected points in the Primeira Liga from 2002/03 until the last season.

The year of the first treble (2002/03), Jose Mourinho (who was Porto’s coach from 2002 – 2004) won the 2002/03 Primeira Liga with relative comfort, finishing 11 points ahead of second-placed Benfica, with 86 points, Porto’s best collection during the last fifteen years. That year, the club also won the UEFA Cup, defeating Celtic and reached the treble by winning the Portuguese Cup against U.D. Leiria. Their second highest collection of league points was in the season 2010/11, with 84 points. The outstanding remark on that occasion, is that over that season Porto won its second treble, by winning the Europa League against the Portuguese team of Braga and the Portuguese Cup against Vitoria de Guimaraes.

The success story of Porto FC

The success story of the last fifteen years started in 2002, when Porto hired the up and coming manager, Jose Mourinho; who had worked with Barcelona under Bobby Robson and Louis Van Gaal and had also managed Benfica, prior to starting his career at Porto. His arrival at Porto set in place a decade of successes in Portuguese and European leagues.

In 2002/03 Porto under Jose Mourinho won the league, the cup and the UEFA Cup, marking a tremendous treble, the first of their history. The following season they did even better and won the Champions League, essentially becoming the best team in Europe. That success was certainly a huge surprise for everyone around Europe; that this relatively unknown coach was on the top of Europe with a team that had few achievements for decades and wasn’t even considered to be among the top teams of the continent. So, the main question arises: How did FC Porto achieve that and what were the reasons of its success?

The answer to the abovementioned question is the team’s management model and strategy. Since Mourinho’s time at the club, Porto’s President Pinto da Costa has sought to make profit from buying young, low-cost talented players and selling them after a few years at higher prices to other teams, without sacrificing Porto’s successes. The model that he followed is a version of the well-known “Moneyball” strategy. In the early 2000s, Porto members decided that in order to stay competitive with Europe’s elite clubs from England, Italy, Spain and Germany they had to be shrewd in the transfer market. Porto therefore sought to invest in young talented players. Furthermore, they believe that by giving youngsters a chance to play for them, they would also attract the interest of other teams. This idea has been their key strategy as they strive to succeed on and off the pitch. They understand that the appeal of Europe’s top leagues is where their stars want to play and so they seek to gain from this. Since 2002, Porto has won 16 trophies and have grossed over €400 million only from player transfer sales, which is a remarkable achievement for the club.

President Pinto da Costa argues that “we have to be permanently studying the youth market. This is what allows us to keep fighting, despite having a budget 20 times less in respect to income [than other leading clubs]. Year after year we lose great players and then put our faith in players with great potential.” The knowledge that they will get the opportunity to make their mark on the European stage makes Porto a desirable destination for young talented players and gives the club an edge in the market. Moreover, Porto has gained a reputation among players for being an enjoyable club to play for. For president da Costa, one of the most fundamental values is about making players feel happy. He also says that “in some cases you have a very young player moving to a new continent, a new city, a new club. Those factors could be a serious problem but that’s not the case with Porto. Players come here and feel at home straight away. They immediately understand they have signed for a great club with a winning culture.”

Nowadays, Porto has almost 40 players on its roster, with many loaned out to other teams. Although it has a seemingly huge financial burden with paying wages for all these players, Porto aims to make long term profit from finding the next big star who they can cash on. And until now, it appears they are succeeding in following the path of the “Moneyball” model.

The “Moneyball” model

Over the past year, much has been said about the “Moneyball” model in sports, with most mentions of it being successful and profitable. “Moneyball” in sports first appeared in the USA by Billy Beane, a former Major League Baseball player, who revolutionized the sport during his spell as general manager of the Oakland Athletics. Beane started using stats in order to trade players and to decide its team draft picks. Moreover, the way he was using data analysis and statistics to utilize his players revolutionized the sport making him the pioneer of the effective statistical analysis model in sports. His ability to be competitive with relatively little investment has made many other owners marvel.

“Moneyball” model in football

In the world of football there have been many successful cases of “Monyeball”. For example, teams like Everton and Newcastle have accomplished much on a relatively small budget by scouting and founding top players at low costs. Both sides are making money on such sales; especially players that developed through their team’s academy; Andy Carroll and Wayne Rooney being two of the most well-known examples. In the English Premier League, the best cases of “Moneyball” model are arguably Arsenal and Manchester City. Both teams have repeatedly succeeded by using their youth academies and excellent scouting networks in order to find young talented players, who will play for a few years for them and then will be sold in higher prices to other teams.

Across Europe, teams such as Udinese and Dortmund are also following the “Moneyball” model by developing talents, combining it with successes and then selling their developed talents at high prices. However, there is a club which appears even more efficient at making money from players while staying competitive. In the past decade this club has won their domestic title nine times. Moreover, it has won the Europa League twice and one Champions League title. The mentioned football club is FC Porto.

Example of Porto’s “Moneyball” model

An ideal example of Porto’s transfer strategy is the following: when Porto sold Ricardo Carvalho to Chelsea in the summer of 2004, Pepe was brought to replace him from CS Maritimo. Εventually when Pepe left for Real Madrid in 2007, Bruno Alves, who joined the senior side from their ‘B’ team, gained a more prominent role in the side and was just as successful as the abovementioned players. Nicolas Otamendi replaced Alves when he left for Zenit Saint Petersburg in 2010. Otamendi, stayed only for four years in the club and was sold to Valencia in 2014. Carvalho and Pepe were both sold for €30 million and Bruno Alves left for €22 million, while Otamendi sold for €12 million. This is a perfect example of the technique FC Porto uses to make money and yet remain competitive. The four sold center-backs were acquired for just almost €6 million and sold for €94 million, marking FC Porto as superb sellers.

Below is a list of the top10 most expensive sales of Porto’s players within the last fifteen years.

James Rodriguez is in the first position of the abovementioned list. Porto spent almost €7 million to buy him (when he was 18 years old) from CA Banfield and after three years he was sold to Monaco for €45 million. Hulk and Radamel Falcao are in the second position. Both of them were sold for €40 million to Zenit and to Monaco respectively. The first non-South American football player in the list is the French Eliaquim Mangala in the 7th position, who sold for €30.5 million to Manchester City. The total profit for Porto from the mentioned top10 sales is calculated to €339.5 million.

Consequently, FC Porto’s economic situation during the last fifteen years has risen steadily. By following the “Moneyball” model, they have achieved to build up a strong and wealthy economic profile. The graph below depicts the money that Porto spent for transfers and the money that it received by selling its players within the last fifteen years.

Summarizing the above, Porto (for the seasons spanning from 2002/03 to 2016/17) spent almost €441 million buying new players and received almost €890 million from players’ sales. Their total profit during that span, counting only the factor of buying/selling players is almost €410 million.

In general, Porto’s success rests on three assumptions: recruitment, development and yield. Recruitment links with scouting, development is linked with training and productivity is linked with the performance of the player in the team.

It seems likely that FC Porto will continue following the same successful strategic business plan for years to come. They will continue scouring the globe (particularly the fertile football grounds of South America), in order to recruit young talented and aspiring football players to their shores and then develop them into viable, saleable assets. Nowadays, Porto has many talents at its current roster and more than 200 scouts are cooperating with the Dragons, being always in the front line to find the future talents.

The talents of the future from the current roster

As was mentioned above, Porto has almost 40 players at its roster, combining experienced players at their 30s with young talents at around 20 years old. The average age of the current roster is close to 25.8 years old. Many of the team’s players are at the beginning of their career, aged 23 years old or less.

The analysis below presents the existing roster’s future talents and their current transfer fee value.

Alex Telles (25 years old) and Oliver Torres (23 years old) are the most valuable players of the abovementioned list with a transfer fee of €16 million and €12 million respectively. The Brazilian player Otavio, is in the third position costed almost €5 million. Lastly, Afonso Sousa who is only 17 years old, is considered the next big thing in the central midfield line of Porto. He is currently playing for the U19 team, but the future belongs to him and scouters from Europe are constantly keeping an eye on him. His current transfer fee value is around €2 million, but it will rise when he will be promoted to the first team. The total transfer fee amount of the abovementioned players sums up to almost €36 million.

Results and Discussion

Undoubtedly, FC Porto is one of the most efficient football clubs in Europe. By following the “Moneyball” model they succeeded on winning trophies and building young talented players who are going to be sold in the future in high prices. In that way, Porto is continuously strengthening its finances by earning millions of euro with every sale, while at the same time maintaining a high level of competitiveness. As it stated earlier, the Dragons have won almost €890 million during the last fifteen years only from players’ sales. Profits are expected to rise even more in the coming years, as Porto’s current roster includes many talented young players that will soon be up for sale.

Conclusion

Summarizing, FC Porto is by far one of the most efficient teams at making money from sales of its talented players while staying competitive, following effectively the “Moneyball” strategy. Within the last fifteen years, Porto has won nine domestic titles, two times the Europa League and one Champions League title, becoming one of the best teams in Europe, while at the same time selling its best players almost every year.

 


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I believe in the proverb of Plutarch: "exercise without physical qualifications and knowledge is incomplete". As an ambitious data scientist, I'm always aiming to broaden my knowledge by interpreting & managing data in order to solve complex problems. In Statathlon, I'm combining my main passions: sports & data science

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