How will Brexit affect The Premier League?

Fans will often say that football and politics should not mix. The excitement of seeing our favourite teams perform on the weekend offers many fans a ritualistic escape from the reality of their daily lives, electing to spend their hard-earned cash for a few meagre hours of football-induced catharsis. Yet, the truth is that football and politics are inextricably linked, whether we like it or not.

None more so than when discussing the impact of Brexit on English football. By now, the chronicles leading up to the Brexit vote and the subsequent aftermath of the political fallout have been well documented. However, less is known about possible repercussions for the English game as a whole resulting from the UK’s divorce from the European Union (EU). Much of the emphasis has been placed on the possible ramifications that a so-called ‘hard’ Brexit could have on the Premier League (PL) and understandably so given its reputation as world football’s commercial powerhouse, generating huge revenues for both clubs and their respective shareholders and for the English economy. Yet, as is often the case with life-changing socio-political events, those that potentially stand to lose the most are the stakeholders at the lower end of the food chain.

Brexit will likely affect English football in many ways, some that we may not even see come to pass for a great length of time. However, the most notable and immediate changes will likely involve player transfers and recruitment, academies and the prevalence of homegrown talent, football tourism and its economic benefits, as well as a hit to various revenue streams including TV and matchday income.

Player Transfers and Recruitment

It comes as no surprise that all 20 Premier League teams in 2016 opposed the Brexit vote. A 'hard' exit from the EU would most likely see the return of tighter regulations regarding the movement of goods and people, causing a cataclysmic shift in the way these truly international institutions operate.

Brexit would likely create a scenario in which players from EU and European Economic Area (EEA) countries become subjected to the same stringent visa and work permit restrictions as players from outside the continent, tightening the criteria by which players can be recruited and creating a tougher market for clubs to operate in. This could see transfer spending go down in the short term and drastically reduce the regularity of bank-busting blockbuster signings that we have become accustomed to over the years. It may, however, force clubs to become savvier in their recruitment and reduce their propensity of paying over the odds for highly-priced and sometimes underwhelming talent.

Instead, all players coming into the league would have to face the same ‘governing body endorsement’ (GBE) rules set by the English Football Association (FA), which allow certain players to receive work-permits based on both the quantity and frequency of national team appearances, something which EU players are not currently subjected to. Under these new guidelines, the Guardian reports that 65% of the Premier League’s current European players would not meet the GBE threshold to be able to represent an English club. In fact, in 2016 the BBC claimed that 332 players in the Premier League, Championship and Scottish Premiership would not have satisfied these requirements for granting a UK work permit.

The obvious implication of this is the effect it could have on the League’s diversity of talent, especially unrecognised international talent. It is worth mentioning that had the new proposed work-permit criteria been applied in the past, the PL could have been deprived of players such as N'Golo Kante and Riyad Mahrez (formerly of Caen and Le Harve respectively), two of the league’s greatest success stories.

This wouldn’t exclusively affect footballers either. Let’s not forget that English football has benefitted from an influx of coaches from Europe in recent decades. Currently, 14 of the 20 PL clubs have a non-British coach at the helm. Furthermore, many of these coaches are backed up by international coaching staff and medical teams, who in turn operate at clubs that employ a whole plethora of European workers at all hierarchical levels. These individuals will also be faced with the same restrictions.

The wider implications of this change of policy are the imbalances in recruitment it will cause throughout all of the English Leagues, with the lower divisions affected most drastically. Whilst top teams will still manage to sign national superstars and A-grade talent, lower league sides will find it harder to recruit unrecognised and unproven international personnel. Although this could stimulate investment in academies and the promotion of youth, it will mean English teams will be restricted in an increasingly international market, unable to acquire some of the most tantalising and exiting talent that the continent has to offer.

But with change comes opportunity, and the UK’s impending exit from the EU does not necessarily spell the end to the English Football’s international make-up. The FA has proposed to relax the GBE criteria in order to create a fully open market, enabling Premier League clubs to secure elite talent from South America, Africa and Asia as easily as they currently access European players. If this promise is kept, both the PL and English Football Leagues (EFL) could begin to see an exciting evolution of its demographic make-up. Yet, only time will tell whether the governing body will come good with its promises.

Academies and Homegrown Talent

There is no denying that English players have had the most to lose from the internationalisation of the Premier League. Back in 1992, the League’s inaugural season, English players started approximately 70% of games. In the 2018-19 season, this dropped to just 33%. Much like the United Kingdom itself, a large part of the Premier League’s success has hinged on an influx of foreign labour. Although critics often bemoan the league’s proclivity for purchasing international ‘ready-made’ talent at the expense of the development of young British players, the competition’s cultural diversity is precisely the thing that makes it such a global attraction.

However, with Brexit set to affect clubs’ recruitment strategies, some opportunists hope that leaving the EU will increase the prevalence of English clubs fielding homegrown talent and promoting their academy graduates. The FA has made it overtly clear that it sees Brexit as a chance to increase the number of English players in the Premier League, subsequently boosting the overall level of the national team by exposing more youngsters to high-level football. This is something which the Premier League’s interim CEO Richard Masters has fervently denied, citing the national team’s recent World Cup and European Cup triumphs at various youth levels as a prime example of the current system working just fine.

Regardless of the Brexit result, the FA has already announced its plans to change the regulations surrounding the cap on non-homegrown players in a 25-man squad, reducing it from 17 to 13 for each team, with the new structure set to take effect by the start of the 2021/22 season. Currently, under these new guidelines, a total of nine teams would fail to meet the necessary requirements, including Liverpool, Spurs, Manchester City and Chelsea, prompting a dramatic change in the way in which these clubs scout players and formulate their squads. Despite this, the FA claims that these new proposals will not affect the international make-up of the league.

Currently, the Prem has more players represented in international tournaments than any other league. At the 2018 FIFA World Cup, 108 of the 736 players selected by the competing national teams were Premier League players, 38% more than from La Liga. With around 260 overseas players currently playing in the Premier League (equating to an average of 13 per club), English football’s governing body argued that if sides had been limited to playing their most-used 13 non-homegrown players last season, only 42 of 10,469 appearances would have been impacted. Therefore, though there may not be a markedly visible impression on the national composition of most starting XIs across the league, the new policy may create a substantially more British feel to most substitutes benches on matchdays, potentially affording more opportunities to homegrown talent.

However, teams in the lower divisions of English football live and die by their academies, producing homegrown talent as a means of survival by flourishing at the club and sold on for maximum return on investment. Production, as opposed to recruitment, will be the ultimate driver. FIFA's regulations on the protection of minors allow players between the ages of 16 and 18 to move between clubs if they are both based in the EU. Thus, as a consequence, Brexit may end up putting a premium on young British talent and ultimately turn these young starlets into prime assets, boosting their value and providing a more lucrative revenue stream for teams with stellar academies.

Football Tourism and Economic Contribution

The economic activity stimulated by the Premier League is substantial. The competition is watched in 189 countries and attracts more than 700,000 match going visitors every season to the UK, with clubs employing around 12,000 full-time staff of all nationalities. In 2016/17 alone, the League contributed an estimated £3.3 billion to the Exchequer via taxes, with clubs’ operations predicted to have had a Gross Value Added (GVA) impact of £7.6 billion to the UK’s GDP, supporting over 100,000 full-time jobs across the UK. And this is only from the top division.

Source: EY Report - Premier League 

In other words, the Premier League is a massive fiscal contributor to the British economy. It supports a vast range of businesses and industries all throughout the supply chain, with a plethora of trades collectively benefitting from the League’s success and global appeal. More importantly, these tangible benefits are not purely concentrated in big cities. Communities throughout the country such as Bournemouth, Norwich, Sheffield, Burnley and the like, all gain from the significant economic returns generated by world football’s commercial powerhouse. Over 500,000 young people annually take part in Premier League funded programmes, with many community football facilities delivered via the Football Foundation which is funded directly by the financial trickle-down effect of the Premier League.

A would-be ‘hard Brexit’ risks disrupting all of this. Not only has the vote left substantial questions regarding the state of the UK’s immigration policy beyond the new January 31st deadline, but the symbolic nature of the decision itself to leave the EU will transmit a precarious message to the international community. For the first time, foreign players, coaches, staff and fans may not feel as welcome as they once were. If these key stakeholders increasingly become underrepresented throughout the English Leagues, fans will lose their affinity for a country that once represented the game’s most diverse tapestry of cultures. International appeal for English football may begin to lag behind that of its German, Spanish and Italian counterparts, ultimately leading to a reduction in football tourism, a drop in sponsorship appeal and the slow and gradual diminishment of weekly global TV audiences. Could English football, synonymous with diversity and inclusion, could lose some of its multicultural lustre? Will Brexit potentially affect the health of UK football’s job market? Only time will tell.

TV & Matchday Revenue

The Premier League’s stadium utilisation rate of 96.5% is European football’s highest, with a total capacity of 800k across all of its stadiums and 520k season tickets sold annually. The League’s appeal is there for all to see, making the potential damage of a ‘no deal’ Brexit glaringly obvious.

The predicted chain of events follows a very simple logic. Less tourism leads to diminishing numbers of travelling fans, lowering demand for tickets and shrinking attendances across the League, further harming the League’s already struggling reputation with dwindling matchday atmospheres within stadiums across the country. Dampened noise and empty seats strip some of the gloss off the League’s matchday experience, something that is unlikely to go under the noses of its top sponsors and commercial partners. Likewise, empty seats don’t exactly make for Hollywood viewing, with full stadiums and diverse crowds creating a much more enticing package for broadcasters.

At the time of writing the British pound is worth €1.16, representing an 18.9% drop in spending power since August 2015 (from €1.43). Many notable economists have claimed that a ‘hard Brexit’ could hamper the currency further. Therefore, for English clubs that wish to spend big in the market, it will cost them more. Likewise, it could make it tougher to match the increasingly high wages being offered by their European counterparts, potentially leading the pendulum to swing the other way and cause players to shun the Premier League and stay within the Eurozone. Deloitte also signalled the weakening of the pound as a contributory factor in Manchester United surrendering its top spot in the 2019 Football Money Leagues report, lagging behind Spanish giants Barcelona and Real Madrid.

In the same report, nine out of twenty of the world’s highest revenue earning clubs were English, propped up predominantly by remarkably high TV revenue. Additionally, clubs such as Leicester, Southampton, Crystal Palace and Brighton & Hove Albion all featured in the top 30 rich list despite their size and stature. But Brexit could threaten this status quo and provide a more even playing field for other European teams seeing to break into this elite crop of commercial elites.

Three of Europe’s ‘Big Five’ leagues are due a substantial increase in their TV revenue when their new rights cycles kick in, with England and Italy being the only two leagues whose revenue will actually experience a substantial drop (see figure 2). A considerable factor in the Premier League’s attraction, not just for fans and international audiences but also elite players, is its financial pull and the ability for teams to pay over the odds to recruit world-class talent. With Brexit set to threaten its financial hegemony, we could see players thinking twice before moving across the pond to ply their trade.

 Source: KPMG Football Benchmark

Brexit - Is it all doom and gloom for Premier League Football?

Not necessarily. The Premier League has established itself as a global brand recognised the world over and continues to be the football’s premier competition globally. However, its financial hegemony was never destined to last forever, with fellow European competitions all vying to match the sort of lucrative revenues it has enjoyed over the years. If the League cannot stand-out from a financial point of view it will have to distinguish itself in other ways and modernize with an evolving market. This monumental task will be up to incoming CEO David Pemsel and his team, who should view Brexit as a chance for the PL to show that its allure can transcend borders and continue to be a key component of ‘brand Britain’. One thing is for sure, Brexit is a complete detachment from the values of multiculturalism and diversity that embody English football.

As for the EFL, the FA remains adamant that the Brexit decision will not affect the way in which clubs will sign and recruit players. But there’s no denying that the world will be eagerly watching how the English leagues will evolve with the times and adapt to their changing habitat. We may see a renaissance in the youth system and a growing willingness to produce developing talent to counter a more cutthroat transfer market, forcing English teams to become shrewder in the way they conduct business. Such a change in culture could ultimately be beneficial for the financial stability of clubs across the country but only on the proviso that they recognise the changing nature of the landscape in which they operate. If English clubs continue under the modus operandi of ‘business as usual’, we could see the further demise of historical footballing institutions such as Bury and Bolton. Brexit, for better or worse, could be the defining event that spurs a fundamental shift in English culture, both within football and beyond.

Writer Profile

 Name: James Cavanagh

Nationality: British

Age: 24

James Cavanagh is a recent graduate from the Johan Cruyff Institute’s Masters in Football Business in partnership with F.C. Barcelona, completing the course with distinction, having previously graduated from Loughborough University with a BA in International Relations. James’ interests include football governance & policy, football history & sociology, media and journalism, fan engagement, sponsorship sales, the acquisition of media rights and political philosophy. Currently seeking employment opportunities within the football industry, specifically focused on journalism, communications, public relations and marketing.

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[Sources]

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- Barnes, Joe. “Brexit GOALS: EU Divorce to Reinvigorate Premier League, Says Brexit Party MEP Rupert Lowe.” Express.co.uk. August 2, 2019.

- Deloitte Report. “Deloitte Money Leagues 2019.” January 2019

- Ernst & Young report – “Premier League - Economic and Social Impact.” January 2019.

- Kelly, R. “How Brexit will affect Premier League football.” Goal.com. March 22, 2019.

- Levitt, Daniel. “How Might Brexit Affect the Premier League?” The Guardian. February 14, 2019.

- London AFP. “Will Brexit Hurt the Premier League?” France 24. March 26, 2019.

- Premierleague.com. “Premier League statement on Brexit and access to talent.” November 21, 2018.

- Savage, Michael. “Football Faces Brexit Chaos over EU Player Transfers to UK Clubs.” The Guardian. May 12, 2019.

- Wood, Mike Meehall. “5 Ways That A No-Deal Brexit Could Affect The Premier League.” Forbes Magazine. January 15, 2019.