Sir Reginald Hargreeves' Sparrow Academy will be a primary focus of The Umbrella Academy season 3, and there's a reason to believe the billionaire created the new group because of Number Five (Aidan Gallagher). Colm Feore plays the patriarch of the original Hargreeves family, consisting of seven adopted siblings. Despite not serving as a supportive father figure, Reginald raised most of them to form a team of superpowered crime fighters. After a brief time jump in season 2, the surviving siblings returned to the primary timeline to find the Sparrow Academy has replaced them.
Upon leaving behind 1963 in the hopes of returning to a repaired present-day timeline, Five and his siblings–Luther (Tom Hopper), Diego (David Castañeda), Allison (Emmy Raver-Lampman), Klaus (Robert Sheehan), and Vanya (Elliot Page)–find the Sparrow Academy has taken up residence in their old home. Not only has a new group replaced them, but Reginald is still alive and well in the timeline they travel end up in. More shocking is the fact that Ben (Justin H. Min), or a version of the sibling, is also alive and seemingly acting as a leader to the Sparrows.
With the existence of the Sparrow Academy, it begs the question as to why Reginald felt the need to form this new group of superpowered individuals. While this will undoubtedly be explained in The Umbrella Academy season 3, some insight can be drawn from Reginald's encounter with his kids in the 1960s during season 2. In the episode titled "A Light Supper," Reginald invited the members of his future Umbrella Academy for dinner to discover why they had been trailing him. The adult siblings failed to impress Reginald and instead presented themselves as a dysfunctional group with a knack for failure. It was assumed this negative impression caused Reginald to form the Sparrow Academy in the future, realizing the Umbrella Academy was destined to fail. Granted, Reginald's solo conversation with Five following the dinner may have given a more justifiable reason for the billionaire to create the Sparrow Academy.
Moments after the disastrous meeting between Reginald and the siblings, Five stayed behind to chat with his father. Reginald referred to Five as "the sensible one of the bunch" just before Gallagher's character revealed he was much older than he appeared. The duo shared a drink as Five described his struggles with time travel as Reginald suggested that he "start small" with seconds rather than decades. The conversation seemed harmless, but with Five speaking of his potential with time travel and difficulties with control, Reginald may have been frightened by Five's powers. That revelation, in addition to the issues surrounding the rest of the Hargreeves siblings, could be enough to deter Reginald from forming the original group.
Five also apologized for giving his adopted father a hard time growing up. While the 1960s version of Reginald didn't see any reason for the apology, he could have kept that in the back of his head. With Five's immense powers and the notion that he would eventually give Reginald a hard time, there's more of a reason to bypass the Umbrella Academy for the Sparrow Academy in the hopes of better controlling the team. Whether or not this reasoning comes into play remains to be seen, but it will be interesting to see if The Umbrella Academy season 3 justifies Reginald's decisions behind the Sparrow Academy's formation.