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Just found this useful guide to the Scout report system on Segas FM08 website. It helps you work out what all the stars mean on the scout reports

New Star rating system & Scouting
Scout reports are the key to finding new players for your club and are laid-out in a quick and easy way to read. This year Football Manager supports a brand new star rating system which can be found in both coach reports and scout reports. The system works as follows:

Scout Reports: Scouts will watch players while on assignment or when directed by you to scout someone. Depending on the skills of the player and the scout they will issue a rating for each player they see. Scout a player more than once and you will reveal even more information about that player which may then change his star rating.

Coach Reports: Coaches are always available to give feedback on your own players and will constantly update their evaluation of them. You can access these at any time by going to the player page and looking at their report and how the players are rated depends on the skill of the players and the coaches.

Here is a breakdown on how the star values work:

Key: Player X = scouted player / Club Standard = standard required for senior player at club

7 Stars - Player X loads better than Club Standard
6 Stars - Player X better than Club Standard
5 Stars - Player X slightly better than Club Standard
4 Stars - Player X same as Club Standard
3 Stars - Player X slightly worse than Club Standard
2 Stars - Player X worse than Club Standard
1 Stars - Player X a lot worse than Club Standard

Player reports are split up into several different sections

Best Position: This section is simply for telling you the best position of the player in question, it will also give you an indication of another position this player might be equally adept at.

Ability: This section gives you an idea of the current ability of the player.

Potential: The section tells you how good this player could potentially be at your club.

Character: This section gives you idea of the character of the player a how well he could fit in with the current crop of players.

Strengths: This will tell you the strengths of the player, you should pay attention to this area to see if he fits into the style of play you are playing.

Weaknesses: The weaknesses of the player are detailed in this section, be careful when looking at this section and make sure his weaknesses are not likely to be too costly to your team should you choose to purchase him.

In addition to these Scouts will give you the following information:

Transfer: This section will give you an indication of how interested the player would be in joining your club, what price his current club might let him go for, the amount of wages he may demand.

Recommendation: In this area you'll get a recommendation stating whether the player is a decent player, a good, quality, definite signing or that the player is not worth singing.

For all of the above categories there is a one word or star icon to give a quick overview of that category. This can be very useful to look at when flicking through many scout reports if you are looking for a particular type of player.