What next for Man Utd’s JJ Gabriel and the ‘academy star wars’? | The Football Boardroom

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1:00Henry:JJ Gabriel is widely considered to be a generational talent in English football, but he seems to want out of Manchester United's academy. We're going to pick the bones out of this situation and we're going to ask, what does it tell us about the state of youth football in England? Are we in the middle of Academy Star Wars?

1:25Christian, good to see you I'm in the Ray Wilkins room the late great Ray Wilkins room at St George's Park I've just been watching England seniors training and spending a bit of time with the under 21s all the age group teams are here at the moment and we'll get on to that because there's so much to discuss about young players but how are you? How was Sicily?

1:49Henry:Very good. Thank you for asking. Yeah, just back late, late summer holiday to the home of Godfather. And I guess starting to wonder whether someone's going to make Man United an offer they can't refuse for their prodigious talent, JJ Gabriel. Yeah, you mentioned him, Kid Messi, as he was described when he was depicted on Instagram, amazing skills. And I mean, appropriately as you've come from Aetna, it's been fairly explosive, some of the news here. Just quickly, because it's such an important story, what's going on in the academies. And I think J.J. Gabriel gives us an interesting window into events in the academy world, as well as specifically about him.

2:34I mean, this is a kid who's been admired in London academies, Arsenal, West Ham and others, went to Manchester United and he's 15. I mean, he is fantastic. He's still a bit physically spindly, but look, there's a huge talent there. But just quickly running through the timeline of events while you're away about what's actually happened with him and this falling out with Manchester United, is that it seems that there was a disappointment that he wasn't in the Champions League contention, particularly on the A-list when players like Manuel Agati, who's injured at the moment, were. Obviously, at his age, he could be on the B-list and bought in, but he wasn't on the A-list.

3:12He played in the Youth League match, scored a hat-trick, was outstanding. But then it unraveled quite quickly. For whatever reason, he requested the deregistering of him at Manchester United. And on his Instagram and on his socials, he removed all mentions of Manchester United. so there's an impasse and the England on the 17s are playing uh this evening at 6 30 about an hour or so's time as we speak on Wednesday and he would have been in there he would have been leading the line he's a fabulous player the skill is absolutely outstanding but he's been a little bit like you he's been doing a tour of Europe uh he's been talking to people in Barcelona Real Madrid apparently very interested in him and I think you know I know you've been following the story I mean, there's huge disappointment at Manchester United.

4:03They absolutely are doing what they can to try and make him or encourage him to stay. They don't want to lose a talent like this. Now, look, you've worked with young players, obviously with the three clubs that you've been at, Liverpool, Chelsea and Aston Villa, so you understand how this world works. So you can probably see all sides. But, I mean, you're obviously aware of this special talent.

4:30Henry:Yeah, I mean, I have been aware of him specifically, and I think there's a lot to pick the bones out of here, both specifically about about JJ Gabriel's position and perhaps what it tells us about the state of youth football in and around the Premier League in Europe at the moment. I think for our audience's benefit, I think we should kind of set the context here. So youth football, academy football, give it whatever name you like, is and always has been, or certainly for as long as I can recall, been a very, very regulated activity. It's taken extremely seriously by the Premier League and in particular the movement of players in and out of academies is extremely heavily regulated and policed very aggressively.

5:25Henry:And there are about 14 ,000 kids in academies in English football to give this the scale of youth football and its importance in the game. And in my time, I observed, I would say, a perceptible change in the way that academies are managed and the way in which clubs think about their youth football. I would say when I came into the game 08-09 at Liverpool, running that football club, I felt that the academy was very much a world of its own. But definitely in the last 15 to 20 years, I would say that youth football in the Premier League has shifted more and more to look and feel more like the senior game, particularly in the issue of player movements, player valuations.

6:27Henry:and fundamentally the extent to which I think the underlying economics of youth football have become something in sharp focus in the boardrooms of every Premier League club. Is that something you particularly noticed at Chelsea under Abramovich? I think Abramovich was very much a pioneer and he understood and seemed to get very quickly the notion that actually, if you could have a highly successful youth programme and run it with a very much a business lens, and that business lens was we recruit young players, we develop those players, we have as our end game, Yes, one or two becoming John Terry or Frank Lampard and playing for the first team at Chelsea.

7:25Henry:But actually, if we can produce professional footballers at any level, then they will create value. And you only need one player to come through and be a£10 million footballer. And that will more than pay for the annual costs of running an academy. And he was seeing that, you know, way back. And I think over time, other clubs in the Premier League started to home in on the potential in and of itself to create profits from the development of young footballers. There are other major factors at work as well here, Henry. But I want our audience to understand that I've often said this, that there's barely a football club in top flight English football who makes profits from their day to day activities.

8:15Henry:but youth football when done properly can be a highly profitable activity and Abramovich spotted that and all of his rivals in the Premier League have over time rode in behind that plan. What has changed because we seem to have gone from a sort of non-poaching model almost to a Wild West I've seen it called. Yeah that is what people are beginning to really cotton on to. I think what that refers to are a couple of things the first is the sense that really there was an informal understanding for many years that and i think this was kind of seen as axiomatic in english football and and amongst people running english football clubs and running the game at the premier league and the fa that a player moving through the academy um in the area they lived and seeing it through at that academy from maybe nine through to 16, 17, 18 was an ideal development profile.

9:20Henry:And in particular, moving around and jumping around rival academies was definitely something that was considered to be probably not in the players' best interests. And I think certainly the big six clubs, as they're now referred to, tended to let their rivals get on with their academy business. And the sense is that with one particular transaction, the move of Rio N 'Gamo from Chelsea to Liverpool in 2024, that that sort of has been seen as a moment in time where that norm changed. And now we're seeing all Premier League clubs, you know, trying to try and assign players from each other. And that's why this notion of the Wild West is starting to be observed.

10:12I mean, he's still young. I mean, he's now with the, you know, the seniors, England seniors. He's had a remarkable development and acceleration of his career in terms of what he would have gone for. I mean, the numbers are fascinating because I imagine there's six or seven times. He's worth six or seven times in terms of what Chelsea would have got in compensation, which I think was probably about two million up front. These are just reported numbers, but with add-ons going up to seven or eight. But this is a player now who we've seen, particularly in this inflated market, particularly with the England premium on a player, who is probably worth 50, 60 million plus.

10:53Henry:Well, this is the point. And what I was trying to say in terms of this evolution in my time in the game is that lots of people have commented on the fact that post-Brexit, a few years after Brexit, it started to, I think by 2021, it was no longer possible for English clubs to sign players from the continent under 18 years old. in particular 16 and 17 year old players. And so that single moment in time suddenly meant that English clubs had to look inward to English players playing in English football to fill out their rosters of young footballers. The second big factor, I should say, by the way, driving, driving increased focus on the purchase and development and sale of young players has been financial regulation in the game.

11:52Henry:And I think probably the moment that really, really would be seen as the key catalyst was when the Premier League started to actually prosecute clubs for breaches of financial regulations in early 2023. And so those two factors definitely are seen as catalysts of increased focus on buying and selling young players. And why selling? Well, Well, of course, as our listeners have heard on many previous shows, it is a accounting fact that if you sell a footballer who came through your academy, who you either paid nothing for or very little for, and you sell them for top dollar later, then that profit contributes to your revenues under the new financial regime and contributed to your losses under the previous regime, both of which seem to have produced, Henry, frankly, an incentive to sell homegrown players, essentially to balance those financial regulations.

12:58Henry:And that has been a big factor here. And when I look at it from the outside looking in, that has led clubs like my former club Aston Villa to really invest very very heavily in making sure that they've got a big pool of young players and if those young players make it and make it I mean become players that are professional footballers then the ability to sell those players for profit has been an absolute life bud for clubs in terms of being able to comply with financial regulation You were very much part of that at Villa, weren't you? In terms of improving the academy. I can remember bumping into you in the car park and just saying, this is what we have to do early on in your tenure there.

13:43Yes, it was a core part of our strategy.

13:46Henry:You're right, Henry. And it was a core part of our plan. And obviously I'd seen just how successful that had been at Chelsea. Now, I did not imagine in those early days at Villa that we would be in a situation as a club where, I think in the last five years, if you include Jack as a homegrown player, Jack Grealish, Villa have generated well over£200 million in revenues from the sale of academy footballers, players, nine players in particular, adding up to over£200 million, players who were signed for either nothing or next to nothing. And that has been a very important aspect, by the way, in Villa's balancing of their FFP calculations.

14:29Henry:But I come back to my take is that it goes beyond Brexit. It goes beyond FFP compliance. Fundamentally, there is what I think sophisticated financial investors and those are the people who now own most of our football clubs. I think they see simply an underlying opportunity to create significant value by buying young players. And you mentioned Engamo's tribunal. And I think we should home in on that because this will become relevant as we try and pick the bones out of the JJ Gabriel case. Engamo are moving from Chelsea to Liverpool. Those of our audience who don't understand those moves between this is this was a player who moved just before his 16th birthday.

15:18Henry:So just before he becomes what's called a scholar and at least a year before he becomes a professional footballer. OK, and when clubs cannot agree an appropriate level of compensation, let's call it a fee, then a tribunal is convened to determine what fair valuation is. And in the case of Engamoa, that tribunal determined that the footballer was worth about£2.8 million in a front end fee. And then add-ons that would follow, for example, if the player played 100 times in the Premier League or was capped for England, which might add, it is reported, up to£4 million. So Engamoa would move for£2.8 million up front, but potentially rising to£6.8 million if every single one of those thresholds would met.

16:18Henry:Now what happened next? I think just over a year after the move, so in fact, round about his 17th birthday, turning professional, Enger Moa is playing first team football at Liverpool. And another year later, he, I think, finds himself, hey, you were there in and around the England World Cup squad. You have rightly pointed out that the market value of, you know, a left or right winger playing for Liverpool Football Club, who, by the way, is in and around, you know, the national squad, is an absolute multiple of the 2.8 million or indeed the 6.8 million that that tribunal has fixed. And let me tell you, Engamoa's tribunal phoenix is the record ever determined by a tribunal for an academy level footballer.

17:16Henry:The two previous record holders in the previous five years were Harvey Elliott, who moved from Fulham to Liverpool. I think that was about one and a half million. He too became a valuable professional player. And prior to that, Ethan Ampadu. So in that five year period, three absolutely emblematic tribunal rulings, the highest determined fee for a player was£2.8 million. But that's so low. Why? I mean, who are the people who are actually deciding fair value? Well, let's think about low and what that refers to. Firstly, if you are trying to compute fair value, like much of football where subjective opinions have to be brought to bear on these crucial financial matters, then you have to look at precedent.

18:10Henry:And so if you are ruling on the Engamoa tribunal, you look back at the previous example of a 15, 16 year old player moving category one, category one, and that was Harvey Elliott. And you double that valuation. So it's not an easy art. But yes, I absolutely agree with you. Most people would say, maybe with the benefit of hindsight, but not very much hindsight, that that figure looks very low. And I would argue, Henry, I would argue that the sophisticated investors who own and control our Premier League clubs today, indeed, many of our championship clubs, have looked at that particular aspect of our UK football scene.

19:03the fact that if you buy players in that sort of 14 to 17 age group and you can't agree a fee and that fee goes to a tribunal ruling,

19:15Henry:I think there is the sense that those values leave plenty of opportunity to make huge capital profits if you've done your homework well on that footballer. And I think that's driving more and more clubs to home in on that profit opportunity. The fact it happens to be incredibly helpful if you do it well for your FFP calculation is an added benefit. But the fundamental point here is just how profitable it is if you buy well. Obviously, some players, when they move at a young age, I mean, Drew Bellingham, you know, he's been out there at St. George's Park training. I mean, you look at his moves, hasn't even touched the Premier League.

19:54He went from Birmingham at a young age. young players and their family those around them their advisors their parents they can work it very well and he seems to have worked out a pathway to the top at an early age so it can work out because i'm always interested in the sort of you know the parents perspective and all this and and these are sort of kids who are almost having sort of untold riches dangled in front of them but you look at ju bellingham he has got to the top by doing it very sensibly he's taken it step by step he went to Borussia Dortmund developed there and now he's at Real Madrid Jadon Sancho when he left Watford at a young age went to Manchester City in the academy there and then they they sold him on but it hasn't really worked out so they are cautionary tales either way so I'd like to just gone out St George's Park put a few more um FA coppers in the meter So, yeah, I mean, I do slightly worry about that element.

20:55Henry:Let's talk about those two because, and something else you said there, you know, I think, again, it's important for our audience to understand this notion of sort of untold riches. Let's be clear, until you're 17 years old, even in your 16th year, so the old sort of apprentice school leaving year, your pay is effectively determined by the league, maybe today£250 to £300 a week. That's what Rio would have earned having left Chelsea for that final year, his 16th year, before turning pro at Liverpool on his 17th birthday. So there would have been a conversation about when you turn pro, then your first year pro pay will be this.

21:47Henry:And normally that first pro contract would be a maximum of three years. So this is how we see what that's going to look like. But I just want our audience to understand that that that's part of the equation. And another sort of myth here is with these sort of 14, 15 year olds that sort of agents are all getting very rich, very upfront. agents are not allowed to earn any money from young players until they turn pro at 17. Now, there will be people listening to this in the game who will raise an eyebrow and say there are ways and means always for agents to get remunerated. That's very, very difficult to police and regulate it.

22:25Henry:And I'm sure that's true. But I think it's the pathway point you've mentioned that is the most interesting aspect. And I think hanging over all of these cases, I think it's fair to say that the traditional view has been or the ideal profile and pathway is for an elite young player to join their hometown or convenient academy and work their way through, take a scholarship deal at 16 and turn pro at 17. And then maybe, maybe that's the point. Think Wayne Rooney coming through at Everton. I think Wayne Rooney made his first team debut at 16. And that is a classic profile. Jude Bellingham is another almost emblematic profile.

23:18Henry:And by the way, very important aspect of Ju's story. I want to make sure all of us understand this because this may be relevant when we talk about J.J. Gabriel. Ju Bellingham is, again, debuting in the championship for Birmingham age 16. So playing first team football at a prodigiously young age and he signs a pro contract and then moves to Dortmund shortly afterwards. What was the significance of that? That Birmingham City received a£25 million, rising£30 million transfer fee. Some would say as an appropriate, but it didn't have to be that way. That was a reward for those seven, eight years developing Jude as a professional footballer.

24:06I can remember being at the England under-19s when they won it in Slovakia. Was it two, three years ago? And one of England's best players was Karni Trugmarker, who was at Villa with you at the time. And I mean, I can remember messaging you and saying, wow, this kid is an absolute talent. I think he was, what, 17, 18? He would have been then. And yet, how was his career? What's been best for his career?

24:32Henry:Well, his situation is quite analogous, actually, to JJ Gabriel in the sense that it played out a couple of years later. But fundamentally, a player who had a year left on his contract, in our case, he had signed his first pro contract at 17. And so that would typically be a three year contract. And quite soon after that, clubs, well-run clubs are looking to extend that contract and move it out. But Connie Chukwamaka was, did not, indicated that he had no intention of signing a further extension. And so effectively, when he had one year left on his contract, despite us offering him, you know, superb, a superb contract to stay, I must say, he made it quite clear that he was not going to sign.

25:26Henry:And this is very analogous to the situation Manchester United now find themselves in with Gabriel, because we faced a situation where, of course, we could have asked Carney to see through his contract. And if he had done so, maybe play for us. He was already getting. I think he had 14 appearances for us in the first team between the age of 17 and 19. So he was definitely coming through nicely and developing well and could continue to have gained minutes. But he could have left at the end of that year to Europe for a minimal fee to Aston Villa. And indeed, with a year to go, we were receiving a lot of incomings from other clubs, aware that there was a situation where he was out there in the marketplace and was not showing any willingness to extend at Villa.

26:23Henry:And in the end, Chelsea bought the player for£20 million from us with a year left to go to effectively protect our value. Our first choice, second choice and third choice, trust me, would have been to extend the footballer. But when it became quite clear that he wasn't going to extend to protect value, we sold the player to the highest bidder and Chelsea were the highest bidder. Just on a philosophical basis, if you are a player, a very talented 15, 16-year-old, and your parents are guiding and driving your career, and you do look at Premier League clubs, and they do seem to be, as you're suggesting, almost using academies, some of them, almost for a trading model rather than necessarily a player development model first and foremost.

27:13Can you understand why actually they think, well, we might as well move?

27:18Henry:Yeah, I don't want to leave our audience with that perception. It's not that our academies are becoming purely trading business models. It's more of an evolution that the underlying profit potential within these academies has come into much sharper focus, I believe, in recent times. And again, I want to stress this word pathway because we must be fair. Nobody around Rio Ingramoa is saying that that move has been anything other than hugely successful. You know, he's left Chelsea where I think most of us believe, you know, at the most basic level, they have so many footballers, so many elite footballers in that club.

28:09Henry:Then the pathway is very, very unclear. And he's gone to Liverpool and he is an established first team footballer within a year of that move. So whatever the underlying financial aspects of that transaction, and they are less clear on a pure measurement of pathway. And by the way, I have a very old fashioned view on pathway. To me, pathway and money are ultimately the same thing. In other words, if a player on a long-term development plan ultimately lands in the first team in the Premier League, then the money will look after itself. And I look at Drew Bellingham's pathway and that has been a brilliant managed pathway.

28:58Henry:And that did involve, as I say, a prodigious start as a professional footballer in the Championship and two moves in Europe yet to play in the Premier League. Let's talk about JJ Gabriel's situation. I should stress he is a couple of years younger than the situation I faced with Kani Chukwameka, but the contractual position is very similar. Manchester United's risk is if they do not sell the footballer now and simply wait to next summer, then he can leave to Europe next summer, given he's an EU passport holder. And the compensation for that might be something order of magnitude four or five hundred thousand euros.