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What would Brexit really mean for the Premier League?


April 12, 2016

By Daniel Geey and Jonny Madill

In the run-up to the Brexit referendum, there have been a steadily increasing number of articles on the Brexit consequences for the Premier League. This blog sets out our high level thoughts on what we can expect to see down the track should Brexit occur and the consequences for work permits, free movement, quotas and free transfers in the Premier League.

Work Permits and Free Movement

The doomsday scenario suggested by some (such as here and here) is that Brexit would result in a host of players who fail to meet the current work permit criteria.

“More than 100 Premier League players would be affected with Aston Villa, Newcastle United and Watford facing losing 11 players from their squads”.

Whilst this observation is correct, it sidesteps one fundamental principle, namely, that it remains unlikely that the same work permit principles which currently apply to non-European Economic Area (EEA) workers would similarly apply to EEA workers post-Brexit. This is set out below in more detail.

It’s also highly unlikely that any non-UK, EEA players who, for example, are on existing Premier League contracts would suddenly be deported. Not only would it be improbable that such working restrictions would be applied retrospectively but practically it could reportedly take two years (and possibly longer) to iron out the intricacies of what Britain’s relationship with Europe would morph into. Before that time, it would be difficult to imagine how the implementation of any interim regulations could succesfully be put in place given that they may change once any Brexit agreement is concluded.

In any event, such negotiations between a UK government and the EU would no doubt be fraught with problems. This excellent Economist article concludes that:

“To get a feel for the negotiating dynamic, imagine a divorce demanded unilaterally by one partner, the terms of which are fixed unilaterally by the other. It is a process that is likely to be neither harmonious nor quick—nor to yield a result that is favourable to Britain.”

The EU certainly wouldn’t be incentivised to make the transition as smooth as possible. Quite the opposite; such a rigorous, difficult and drawn-out negotiation would be a marker to deter other Member States from thinking (and doing) the same.

Equally, two years may not be long enough to renegotiate Britain’s subsequent relationship with the EU. As a quid pro quo, the EU will want to extract as many substantive concessions regarding the free movement of EEA workers as possible particularly if the British Government aims to receive the benefit of near tariff free EEA trading. This is vital given that (according to the Economist) “almost half Britain’s exports go to the rest of the EU.” As the EU takes almost half of Britain’s total exports, the Government’s priority will  be to ensure such exports are not subject to particular trade tariffs (one of the major benefits of being in the EEA trade bloc) which would make British goods and services more expensive.

Even this is not a straight-line play-off between two of the biggest issues (i.e. tariffs vs free movement), though it does set the scene for the highly complex negotiation that will ensue. For this reason, anyone thinking that it is a foregone conclusion that the same (current) work permit rules that apply to non-EEA players wanting to play in the UK will similarly apply to European players is simply guessing. If the UK government’s priority is to benefit from tariff free EEA trade, degrees of free movement concessions from the UK government are inevitable.

If Brexit occurs, a tiered player immigration approach is likely. The strongest restrictions will continue for non-EEA players (see my blog on the recent changes here). I would suggest (pending the UK government/EU negotiations) that a second, mid-way category is applied where EEA players will be in a more privileged position because of the concessions that the UK government will have to make on various issues. The third category will be UK born players who will be in the most favoured category because of the ease with which they can be employed by clubs.

As such, there may be no immediate short term impact but, in due course, a major overhaul of the work permit regulations for EEA players would be required.

An important additional point to consider is the  FIFA Regulations on the Status and Transfer of Players. Specifically, Article 19  which limits the movements of under 18 year old players. As Marcotti points out, Article 19 permits the “transfers of minors between the age of 16 and 18 within the EU or EEA”. If Britain is no longer in the EU, it would be unlikely to benefit from this exception.

Quotas and the Home Grown Rule

Some have questioned both legally and practically whether if outside the EEA, (and thus not potentially bound by the fundamental Treaty principles around nationality discrimination) nationality quotas could be reintroduced.

Currently, one of the fundamental pillars of the EU Treaty prohibits discrimination in the grounds of nationality. Should Brexit occur, many believe that discriminating against non-UK nationals through for example nationality quotas should be imposed to promote the national team thus exposing more English players to top level football. Premier League clubs would certainly not want to be fettered in their ability to  pick only a certain number of English/UK born players for the simple reason that it would reduce the ease of recruiting top class European players.

There had previously been a FIFA driven proposal for a 6+5 rule to be imposed. That was shot down in part after liaising with the EU because of concerns that such regulations would have been illegal (see here for more detail).  Post-Brexit however, whilst it would be politically difficult for the FA to impose direct nationality restrictions on the Premier League and Football League, it could potentially implement such regulations across its own FA Cup competition.

The previous political compromise between UEFA and the EU was the home-grown player rule (see here for more detail). The rule was drafted in such a way that it did not directly discriminate on the basis of nationality (i.e. where a player was born) but rather where a player trained between the ages of 15-21. Some of the unintended consequences of the rule actually encouraged foreign players to play and be recruited into leagues and academies at a younger age. This had the side-effect of actually displacing young UK born players so ‘foreigners’ would meet the home-grown criteria. In theory, discrimination on the grounds of nationality could occur post-Brexit but again this is somewhat unlikely due to the political compromise that may need to be concluded to allow the UK to benefit from tariff-free or limited tariff trade that would otherwise harm UK exports.

Would free transfers still occur?

The knock-on impact for Britain of no longer being bound by European Court judgements, in certain instances, would be whether cases such as Bosman  (based on freedom of movement at the end of a player’s contract (see here)) would still be applicable. This would in part depend on the legal relationship that is established between the UK government and the EU post-Brexit.

Interestingly, EU law may still  apply to a transfer if there is  an appreciable impact within the EU (e.g. a Member State transfer involving a Member State citizen in or out of Britain). In any event, the Bosman free transfer[1]  principles have already been applied to purely domestic situations (which do not involve issues of EU jurisdiction) (e.g. Campbell to Arsenal; Ings, and McAllister to Liverpool; and Sturridge to Chelsea). As such, it would be unlikely that the FA, Premier League or UK government would rush to impose additional restrictions on the free movement of its citizens or workers employed in the UK in order to prohibit their movement at the end of a player’s contract.

 

[1] For completeness sake, selling clubs whose players are under 24 receive a fee determined by an independent tribunal for domestic ‘free transfers’.