If Theresa May’s government are to negotiate a ‘hard’ Brexit, football could be heavily affected.
The EU referendum debate had immigration at its core, a theme which will also be at the heart of the Brexit negotiations. As a result of this, the English game could go one of two ways.
The government will either make it more difficult for EU nationals to play here, or they will open the country’s footballing doors even wider and attract talent from across the globe – without work permits having to be such a big issue for non-EU talent.
Due to the political uncertainty around Brexit at the moment, both options look possible. Political reputation and wider immigration issues are at the heart of both options. For example, if the football industry is granted special dispensation on immigration laws, then other entertainment industries will start to demand similar agreements for international talent in their sector.
However, according to a study by accountancy and consulting firm EY, the Premier League contributed £3.4 billion to the UK economy in the 2013/14 season alone – and this figure has undoubtedly grown season upon season since then, and will probably continue to do so.
Premier League money is filtered into the league through chains of transfers and Checkatrade Trophy payments. This high economic value may encourage the government to relax immigration laws for the football industry.
So, in terms of a ‘hard’ Brexit, one of the rules that would change is that players from European Union countries would not be allowed to move to Britain until the age of 18. This is two years later than the minimum age currently set by EU law.
As clubs have been increasingly reliant on new players from European clubs to add quality to their youth teams in recent years, all clubs will have to play their part in increasing the quality of homegrown players post-Brexit.
The demand for young English talent in the transfer market will become higher than ever. This will create a perfect opportunity for EFL clubs to invest in their academies, as Premier League clubs will have to pay attention to the talent available at smaller British clubs.
For many clubs in the Football League, the player compensation fees laid out by the Elite Player Performance Plan – England’s long term player development strategy launched in 2012 – resemble an attractive source of income.
As a hypothetical example, say Player X joins Grimsby Town’s Category 3 academy aged nine. At the age of fifteen, he is signed by Arsenal. Arsenal must pay Grimsby Town a fee of £59,000. If Smith goes on to play 70 times for Arsenal’s first team, Arsenal will have paid Grimsby Town £1,059,000 up to that point.
With some clubs in League Two operating at a loss of around £250,000 per year, this initial £59,000 fee represents over one fifth of that season’s loss being cut. The possibility of getting over £1,000,000 for Player X over future years is more attractive than selling him for a smaller flat fee when he is a few years older. It is a risk that many owners and chairmen may be willing to take.
However, the possibility remains that a player like X may break into the first team at Grimsby Town – and leave for a larger transfer fee when he is in his late teens. There are many financial decisions to be made while developing a player – which is the responsibility of the coaching staff and the board to consult with each other to make the correct decision.
Football fans up and down the country, would prefer to see homegrown EFL players stay at their clubs and build a career by adding value to the first team there. However, the reality is that club finances are generally low, particularly in League Two, and smaller clubs will find it extremely difficult to turn down this sort of money. Buy-back or loan-back clauses could be inserted into such deals, but that is a complex topic for the other day.
We must also remember that the club may be forced into losing a young player sometimes. Any young boy’s head would be turned if Manchester United, Chelsea or Arsenal were to come knocking. The younger generation grow up supporting their idols, and not many turn down an opportunity to grow up to play alongside them.
So ultimately, football is facing just as much uncertainty from Brexit as any other industry.
Uncertainty does not have to be a bad thing though, particularly for smaller clubs, if they plan ahead and maximise the potential of the talent in their academy systems. Depending on the approach that the government decide to take following Brexit negotiations, demand for young British talent in the transfer market may become higher than ever before.