I wrote an article a while back about how Orlando City was making a mistake with its priorities regarding the soccer pyramid. They club has sent the academy over to Monteverde, effectively offloading that responsibility to an organization that isn’t going to create MLS talent. I could (and did) write a whole article on how that isn’t the correct move, but that isn’t the direct point about what I’m going to talk about.
Recently, the Vancouver Whitecaps made the most lucrative transfer in MLS history with the $22 million transfer of 17-year-old Alphonso Davies. Davies being a Homegrown product out of the academy will net the Whitecaps 100% of the profits as MLS recently got rid of its 25% tax on theses types of deals.
That means Vancouver gets to keep all of the $22 million. You heard me right. The Caps will get between $16-20 million in a year, and maybe more depending on how Davies progresses (per FIFA transfer rules). When most clubs are struggling to stay above the red line, this singular deal will be more than what any other team profited in 2017.
In fact, only nine MLS clubs profited last season. And none of them even came halfway to what the Davies deal will net. In an arms race with only limited non-shared revenue options, the academy can be the one gold mine that can make clubs large sums of cash. Since the league governs all national TV money, corporate partnerships, and kit deals (Adidas), other than your shirt sponsor, there aren't many quick ways to make double-digit millions in one one transaction.
Because of MLS salary rules, Homegrown transfers can also net you General Allocation Money (GAM). Vancouver will be able to get $750,000 of GAM from the Davies transfer. This is money that allows you to buy players above the max salary cap threshold and is a very important tool in building out a roster. This money is important because it allows you to buy Designated Players or several high-quality players without it counting against your salary cap.
Therefore, not only does Vancouver profit directly, but it gives itself more ammo to build a better team. But unfortunately for MLS clubs, the concept of prioritizing the academy isn't there yet. It’s still very much a league that doesn't transfer within itself, further holding itself back by not utilizing the academy as it should used — as a money maker.
Yes, the league is young and it’s to the point that many of the kids that come through the academy can find their way into the first teams easier than, say, a Chelsea or a Real Madrid. However, given the right priority, the academy could be a club’s biggest generator of revenue and Orlando City, like many others, has yet to realize it.
The move of the academy to Monteverde and the delay of building the training facility shows that Orlando City is making moves that do not prioritize the academy. Unlike clubs like Atlanta United, which I expect to be making millions in the next few years off its academy, City has chosen to go the opposite route of offloading its academy responsibilities.
If City wants to do things right, it needs to take a hard look at the Davies example as to why you prioritize your academy, build the right infrastructure to attract talent, invest in the coaches, and build a true foundation for the soccer pyramid and not just treat it as an afterthought. The academy can be one of a club’s best assets. Orlando City just doesn't see it yet.