29 June 2016 14:42:47 IST

Will EPL feel the Brexit kick?

Acquiring foreign talent may become expensive if the pound continues to fall

After the world woke up to the reality of Britain exiting from the European Union on Friday, the media has been abuzz with its impact on growth, trade and investment, jobs, immigration, etc. But one area that has received scant attention so far is football — or more particularly, the English Premier League (EPL) and how Brexit will affect it.

Football is an industry that runs into billions of pounds if one looks at the clubs’ valuations, transfer of players, players’ wages, sponsorship deals, TV broadcast rights and merchandising.

Five clubs

According to KPMG’s valuation of the world’s richest clubs, there are five English clubs in the top 10 — Manchester United, Aresnal, Manchester City, Chelsea and Liverpool.

The most obvious impact of Brexit would be the movement of players. Now players from EU will be treated as foreigners in Britain and may have to apply for a work permit to play in the EPL. So EU players after two years, when Britain formally exits from EU, will have to compete for work permits with players from South America, Africa and Asia. Though a majority of the non-EU players come from South America and Africa, there is a small but growing number from Asia.

Once UK leaves the single market, over 400 players in EPL and the Scottish League will have to follow rules imposed on non-EU players, which means getting a work permit would also depend on the FIFA ranking of the countries they come from.

A growing number of clubs in the EPL are owned by foreigners. This year’s champions Leicester City is owned by Thai businessman Vichai Srivaddhanaprabha, Chelsea by Russian billionaire Roman Abramovich, Manchester United by the Glazer family of the US (who also own the Tampa Bay Buccaneers in the NFL), Manchester City is owned by Sheikh Mansour, Deputy Prime Minister of UAE and a member of the Abu Dhabi royal family and Liverpool and Arsenal also have American owners.

Sinking pound

The falling value of the pound after Brexit is also causing problems.

“If the pound continues to fall, foreign talent will become more expensive. That could have a huge knock-on effect on the summer transfer window,” says Simon Chadwick, Professor of sports enterprise at the University of Salford, quoted in agency reports. So if the pound continues to plummet acquiring players from the EU will get more expensive for English clubs.

West Ham United largest shareholder David Sullivan wrote on the club website before the referendum that, “There are going to be a lot of implications for the Premier League and football in general. If sterling continues to fall against the euro, players at European clubs will become more expensive as that impacts our buying power.”

Stoke City Chairman Peter Coates, which has nine players from the EU, has said, “The outcome is not a complete surprise to me. The argument was always about immigration and the economy... and the great British public is more concerned about immigration than the economy.

“It will not make it (the signing of foreign players) any easier, but I've no idea where it will end up. It's bad news for football and bad news for the economy.”

So for the next two years, which is the time it will take for Britain to exit the EU formally, there won’t be any drastic changes. But a period of uncertainty has begun.

There is also a growing opinion that the Football Association could lobby with the UK government to tweak the work permit rules to ensure that English clubs continue to attract top talent from Europe. But Brexit could threaten the EPL, which is by far the most popular and closely followed football league in the world with millions of fans.