With every transfer window passing by we see good and bad business going around. Many think that Tottenham Hotspurs did well to sell Gareth Bale for a huge figure, many think Roma did well for selling Pablo Osvaldo, Erik Lamela and Marquinhos and still being able to set up a better team. Others take Udinese and Arsenal who have been known for selling players for huge figures when they bought them in the first place for cheap. Nevertheless, the past twenty seasons show us that there is only one team ruling the transfer window season in, season out; it is FC Porto. The Portuguese club has made profit in 17 out of 20 seasons from transfer windows and in the only three seasons they did not make a profit their loss did not go over three million Euros.
Making profit from transfer windows does not make a team successful; true but Porto have even won plenty of trophies ranging from domestic leagues, cups, super cups, a Champions League and two Europa Leagues/UEFA Cups, they have won way too many trophies in the past 20 seasons and they have shown the world that winning does not necessarily start with spending money.
In 1994, Sir Bobby Robson was appointed as a manager for FC Porto and his experience on the bench gave the players at his disposal an extra push and the club was not in need of new signings as average players looked great in the system he laid. The club was making slight profits in the first 10 years of this twenty year period, they reached a total of €38.3 million at the end of the 10th season while making losses in two seasons 2001-2002 and 2003-2004, though the losses do not count much as we can see on the graph, the line only slighty drops down. In 2002, Jose Mourinho was appointed as the club’s manager and with a few raw talents at his hand, he made them reach their best and fulfill their potential. During the second half of the twenty years shown in the graph, Porto sold Fernando Couto (Parma), goalkeeper Vitor Baia (Barcelona), Secretario (Real Madrid), Sergio Conceicao (Lazio), Helder Postiga (Tottenham hotspurs), Jorge Andrade (Deportivo La Coruña) and Jardel (Galatasaray). All teams mentioned above were dominating European football back then. During the season 2002-2003, Porto managed to win the treble: League, Cup and Champions League, lead by Jose Mourinho, they hung on to their winning stars one season and decided to cash out on them the following one.
Two seasons after winning the Champions League Porto held mass sales and players such as Deco, Ricardo Carvalho, Paulo Ferreira, Carlos Alberto, Derlei and Pedro Mendes all left generating more than €95 million Euros of which around €43 million were spent on signing new players. Leaving a profit of more than €50 million in only one season!
The following season, they struck a deal with Dinamo Moscow and sold them five players including Maniche for around €40 million while Luis Fabiano joined Sevilla. Two seasons later the second big jump took place, Anderson left for Manchester United and Pepe to Real Madrid. Porto continued to do the same business with Lucho Gonzalez and Lisandro Lopez leaving for Marseille and Lyon respectively, Bruno Alves and Hulk to Zenit Saint Petersburg, Radamel Falcao to Atletico Madrid, Ricardo Quaresma, Alvaro Perreira and Freddy Guarin to Inter, Joao Moutinho and James Rodriguez to Monaco and many more others yet the club that made a profit of €370 million from transfers still has players like Jackson Martinez who is valued at €40 million, Fernando, Alex Sandro and Nicolas Otamendi. Their squad value at the moment may be worth about €190 million though Benfica top them at around €230 million.
Nevertheless, it is the players’ performance during the season that will increase their value exponentially and make them worth even more. They opened this season with a 3-0 win against Vitória Guimarães in the Portuguese Super Cup and they are already in occupying the first place in the league with four wins and a draw from five games played. In the Champions League, they won their first game away to Austrian side Rapid Wien. Thus they have a good record of 6 wins and a draw from seven games played.
In the above figure, the bars colored in blue are what Porto won during the past two decades while the yellow ones are the 99 years before. 20 years ago Porto were not the same powerful team they are today, the club has almost achieved half of its success during the past two decades of football despite being a 119 year old club. It is quite remarkable to see that they have managed to win as much trophies in this period as they did in the 99 seasons before. They were definitely a good team before but now they became the dominant team in the Portuguese game with Benfica, Sporting and other teams struggling to match them with strength even if Benficas still to this day attracts more fans to attend their games.
Benfica may still be the team that has won the Portuguese league title the most but this does not reflect who has been better. The above Donut Chart shows the winners of the past 19 League trophies while the current one is still not over unsurprisingly Porto are in first place. It is clear to see which club has won the competition 14 out of 19 possible times while Benfica managed to win it only twice the same as Sporting while Boavista won it once. Benfica are helplessly trying to reduce the gap between them and the current champions and this summer they made a €23.5 million loss by signing players from all over the globe to try to break the trend but it seems Porto are just way too organized and good for that to happen.
It is quite common to see a team or two dominate the league in their country but to what we have here at our disposal is a domination without financial exploitation, Porto are showing the world how balanced books can still ensure success and that spending large sums of money might win you a trophy or two but it is a bad investment on the long term.
A great combination of financial directors, managers such as Andre Villas Boas and many others, a scouting network and passionate supporting fans made the club what it is today. This is a perfectly executed sports business plan and many teams and directors should learn from such a sustainable plan.