Borussia Dortmund: Football’s Yellow Wall Street

The new-look Borussia Dortmund are one of the most exciting teams in Europe today. Currently sitting nine points clear at the top of the Bundesliga, Die Schwarzgelben are drilling holes in defences up and down Germany, and their youthful squad, one awash with international starlets, is showing no signs of slowing down. Dortmund are on course to topple the Bayern dynasty by ending the Bavarians’ six-year reign on the throne of German football, but it isn’t just their goal-scoring proficiency that is gaining plaudits.

Dortmund’s savvy systematic approach to player-acquisition is once again bearing fruit

The Westfalen club has long been known for its unique business structure, one that places emphasis on investment in young talent and a reluctance to spend big. Looking back across the last few years, some might argue that this model hasn’t worked, with Bayern Munich’s financial supremacy near-monopolizing the league; but Dortmund’s savvy systematic approach to player-acquisition is once again bearing fruit, and Premier League clubs should take notice.

Dortmund have clearly invested heavily in an extensive scouting network, one that patrols leagues across Europe and beyond and isn’t afraid to poach players from big clubs failing to offer their youth talent adequate opportunity. These young players are often willing to sacrifice high wages in place of assured game time, recognising that minutes on the pitch will best-establish themselves and, consequently, put them in positions of greater financial reward later down the line. The most obvious, and recent, example of such an acquisition is 18-year-old Jadon Sancho, the ex-Manchester City winger who is lighting up the Bundesliga with his swift feet and eye for assists. Dortmund secured Sancho for £8 million at the end of last season, prying him away from a giant club offering him a giant contract. Pep Guardiola recently spoke of his disappointment in failing to keep Sancho at the club, saying “we offered [him] a huge deal for the academy in terms of salary, he was the most well-paid player in all the academy”. Sancho’s decision to reject Guardiola’s offer is proof that money can’t always buy talent. Dortmund, instead, would invest in his experience; a far more valuable commodity. Having made 34 competitive appearances for the club since his arrival – 34 more than in Manchester – Sancho’s market value has skyrocketed to £79 million, an 806% increase, as reported by BBC Sport in December. His impressive form has also seen him earn his first international call-up, making him the first player born this century to play for England.

It is clear that Dortmund’s business model for player acquisition works

Sancho’s exponential growth, both in terms of financial value and professional experience, is far from an isolated case. Dortmund acquired the then-16-year-old Christian Pulisic on a free transfer from US regional side Pennsylvania Classics in 2015, a testament to the global reach of their scouting network, who became a regular starter on a wage of £25,000 a week – all the while remaining a teenager. Consider that Manchester United recently signed Portuguese defender Diogo Dalot, also a teenager, on a contract of £50,000 a week; a player who has made just 5 appearances this season. The transfer of 20-year-old Ousmané Dembele to Barcelona for over £100 million represents Dortmund’s most lucrative player investment to date; it took just one season to multiply the youngster’s value seven-fold following his £14 million move from Stade Rennais in 2016.

Dortmund recently agreed a deal in January 2019 for the transfer of the aforementioned Christian Pulisic to Chelsea for £60m, the American set to follow in the footsteps of his once-Dortmund teammates Aubameyang, Mkhitaryan, Sokratis and Durm in moving to the Premier League. A profit of over 100% was made on every one of these transfer deals, with the exception of Mkhitaryan, where Dortmund could muster only a 25% profit. In a statement announcing his departure, Pulisic praised the club’s faith in youth talent; “I would not be here without the club and their belief in giving young players a chance.” Ousmane Dembele’s 2017 transfer to Barcelona saw the Frenchman similarly credit Dortmund for their belief in him at an early age. “What I liked about Dortmund was that they became interested in me very early, before anyone else”, he said in an interview with Onze Mondial. As in their acquisition of Jadon Sancho, Dortmund prove time and again that appealing to the prospects of the individual supersedes the need to appeal to bank accounts and player agents. This is made easier, of course, because their young transfer targets typically don’t require significant transfer fees, nor are they burdened by the pressures of mercenary agents. Dortmund are equally careful in their decisions to sell these youngsters; the club has often proven reluctant to accept initially-lucrative bids in place of trading their assets (as they may as well be called for business purposes) at their most valuable. On the Dembele transfer, the fourth highest in history, Dortmund said they rejected Barcelona’s initial approach because their offer “did not correspond to the extraordinary footballing and additional value of the player and the present economic situation of the European transfer market”. In other words, they won’t be bought until they want to sell, and won’t be hoodwinked by large transfer sums that don’t account for a player’s projected increase in value.

Dortmund prove time and again that appealing to the prospects of the individual supersedes the need to appeal to bank accounts and player agents.

It is clear that Dortmund’s business model for player acquisition works, but it requires a degree of patience in allowing those investments to pay off, which makes replicating this structure difficult for larger clubs with increased demand for results. Chelsea, for example, engage in a transfer system that also regularly buys young talent, who are then loaned out to clubs across the world to effectively outsource their development. While this has proven financially beneficial for the club – though rarely do they make a significant profit if they decide to sell to these loanee clubs – Chelsea seldom reap the rewards of this system because the ‘experience’ offered to these youngsters is not of a sufficient quality compared to the top-tier of English football; game time is only as valuable as the league in which it is played. Tottenham Hotspur come closest to Dortmund’s approach to player development, though they perhaps place too much faith in their own English talent – a noble strategy, but one that demands years of progress in a league dominated by purchased foreign talent. Through developing acquired players across a number of seasons by fulfilling the promise of valuable game time, Dortmund achieve regular periods of domestic success; the product of their careful accumulation and cultivation of talent. Their fans last enjoyed this cycle of success in the 2012/13 season, where they were Champions League finalists, and the two seasons prior, when they won consecutive league titles for the first time since 1996. The club’s faith in youth was equally-evident during this period. 17-year-old academy product Mario Götze proved influential in both title-winning campaigns, whose €37 million release clause was triggered by Bayern Munich in 2013. Dortmund also invested in 20-year-old İlkay Gündoğan prior to that period of success, signing him from FC Nürnberg for €5 million and making him a regular starter. He was bought by Manchester City for €30 million in 2016.

Through developing acquired players across a number of seasons by fulfilling the promise of valuable game time, Dortmund achieve regular periods of domestic success

The years following Dortmund’s Champions League final defeat saw many of their most important players depart the club, and represented the natural progression of a squad at the peak of its accumulated quality. Götze, Lewandowski, Hummels and Błaszczykowski all departed, and Dortmund’s period of dominance ground to a halt. In times of domestic struggle, however, the club’s commitment to talent investment does not cease in place of quick-fix solutions. They have rarely spent recklessly on the acquisition of a big-name player. As of 2019, Dortmund’s record signing is central defender Abdou Diallo, at €28 million. Instead, they prefer to turn to the temporary and cost-effective solution of loaning unwanted players from around Europe, those who plug a gap in the squad sufficiently enough for a single season. The club has, for example, lacked a permanent striker since Aubameyang’s departure, but rather than irresponsibly spend on a low-quality replacement, they enlisted the services of cast-outs Michy Batshuayi and Paco Alcácer – both of whom found an incredible run of form during their time at Dortmund. As it stands, Alcácer, who joined Dortmund on loan from Barcelona at the start of the season, is the Bundesliga’s top scorer. While loaning temporary players does not provide a lasting solution, irrespective of their performance, it gives the club time to procure a talented permanent replacement, one inevitably catching the eyes of scouts as loanees hold down the fort.

It is likely that Dortmund’s current squad, one brimming with young offensive and defensive talent, represents the return of the aforementioned cyclical period of success. Years of carefully-coordinated recruitment has meant that the club may once-again challenge on both the domestic and European front, as they did so effectively five years ago. While this might mean that, in the years to come, the talent in their ranks may be snatched up by Europe’s bigger fish, it will be to the lucrative financial prosperity of both the club and the players in question – and that’s a pretty effective business model.