Tuesday, June 6, 2017
With the close of the Premier League season, attention has quickly turned to the speculation of which star players will be bought by teams seeking to improve their squads over the offseason. Last summer, Premier League clubs spent over £1 billion on players (http://www.bbc.com/sport/football/37209664), with the highlight being the record transfer of Paul Pogba from Juventus to Manchester United for a reported £86m (€100m).
Transfers are huge business for all involved and therefore the effects of Brexit may be an own-goal as far as Premier League clubs are concerned.
End of Free Movement?
At present, Premier League clubs are aided in their pursuit of the top footballers by the free movement of workers for European citizens under EU Directive 2004/38/EC (the “Directive”). This makes the purchase of talented footballers from around Europe much easier than it is to buy the best players from South America. If a player is from a non-EEA state, a work permit is required. In the UK, this process is restrictive and complex, with some permit applications taking months to complete.
The biggest impact of potentially losing the free movement of European citizens for Premier League clubs will be on their youth recruitment. At present, Premier League clubs scour Europe for the brightest prospects aged 15-16 years and offer them lucrative deals to move to the UK. This has a number of benefits for clubs: 1) the transfer fee that may have to be paid for a teenager is a fraction of the cost of established stars. 2) FA rules require clubs to a have a specific number of “home grown” players in their squad so as to encourage the development of local talent. As this definition of “home grown” is quite flexible, a player from Spain or Italy could count as part of this quota if they were at the club since 15-16 years of age. This is advantageous for clubs as it ensures that they do not have to reduce the quality of their squad just to reach a quota of “home grown” players.
Many clubs have also taken advantage of free movement laws by acquiring young talented players who cannot receive a work permit in the UK and immediately loaning them to clubs in the Netherlands and Belgium where work permit laws are restrictive. The player stays there for a number of years until he has EU residency and can avail of free movement to then move to the UK. For the club, this is advantageous as they control the rights to a future prospect who, if he develops as expected, will become a valuable asset that they can use themselves or they can sell for profit.
If free movement of persons was to end in the UK, the Premier League’s conveyor belt of young talent may come to an abrupt end. Whilst this may have a positive effect for the development of UK born footballers, it will likely have a negative impact on performance. Premier League clubs may find that they fall behind their European rivals as a result of these barriers to acquire the best players, with performances on a European stage being used as the benchmark for quality.
The Premier League is currently the most powerful league in football with billion pound TV-rights deals, growing profits and world-wide fandom. It is marketed as the “best league in the world” if it no longer has the best players due to employment rights issues, it is quite easy to see a negative impact on the future revenues for clubs and their owners.
Once the UK leaves the EU and should the UK lose the free movement of persons, the Premier League’s only option would be to lobby the UK Home Office for work permit exceptions for footballers. At present exceptions are available such as special dispensations for “exceptional talents”. It is clearly foreseeable that similar dispensation would be necessary to ensure that European players could move to the UK to work and that those currently availing of their free movement rights in the UK are not negatively affected by a change in their rights. This would allow the Premier League to continue unaffected by any possible harsh effects of Brexit.
The potential effect of Brexit on the transfer of players is as uncertain as the general effects it will have on business so it will be interesting to follow its development as Brexit negotiations develop.
In the immediate future, expect to see Premier League clubs plan for the worst case scenario by increasing their recruitment. With rumours of a number of clubs carrying transfer “war-chests” of 100s of millions, it looks like this summer will be another bonanza for players, their agents and selling clubs.
For further information about this article, please contact contributor Stephen Parnell. The Philip Lee sport group advises many public and private entities in the health and sport sectors. The group is led by Philip Lee and supported by senior associate Eoin Brereton. Anne Bateman is the firm’s data protection partner and advises our sport sector clients on all aspects of intellectual property, data protection and privacy.