Transfer of Power: Brexit and the Football Transfer Market
The UK’s departure from the European Union has affected almost all industries in the country. Football is no exception and nowhere in football will the effect of Brexit be more keenly felt than in the transfer market, where fresh rules have come into effect now that pan-European regulations no longer apply. The Home Office has approved the FA, Premier League and EFL’s joint proposal for the new rules that will henceforth govern the movement of players into the FA’s professional ranks. On top of this, EU regulations and decisions are no longer binding on the UK. After a quiet January window dominated by financial uncertainty, many eyes are turning to the summer window, when hopes are high that the pathway back to sporting normality will be clearly lit.
What can we expect from the first major transfer window of the post-EU era? Below are some key changes and their potential effects going forward.
The current UEFA rules stipulate that at least 8 players in a Champions League/Europa League squad of 25 will need to be ‘home grown’ – a rule replicated in the Premier League, save for a slight difference in the definition of ‘home grown.’ So, you might ask – if UEFA and the Premier League have their own rules, why is Brexit relevant?
The reason is that these rules (both UEFA’s and the FA’s) define ‘home grown’ players by reference to their training, not their nationality. The English FA rules also do not require players who will still be under 21 by 1 January in a given season to be registered as part of the squad – they are automatically eligible to play. Currently, then, if a player is 18 when his first season in England starts, he will not count towards the squad until he is 21, at which point he will be deemed ‘home grown.’ Had Kylian Mbappe chosen the Premier League over PSG when leaving Monaco, he would now be a home grown player under the current rules – despite having arrived after making his international debut.
A key reason for this construction of the rules was compliance with article 45 of the Treaty for the Functioning of the European Union (as it now is) – the right to free movement for EU workers. Restrictions based on nationality would have been illegal under EU law, while any restrictions that might have an equivalent effect – such as the home grown rules – had to be proportionate and no more than necessary to achieve their legitimate objective of encouraging the development of young footballers.
The UK no longer has an obligation to protect the free movement of EU nationals, which means it no longer has to construct its home grown player rules to minimise impact on players from Europe. So far, in order to maintain the quality of the league, the FA has opted not to change the rules, but that has not always been their stance. In 2015, proposals were made to increase the home grown player quota to 12, and while the appetite to do so may have subsided for now, there is no longer any legal impediment to tightening the rules. Should England crash out of the Euros early this summer, it could precipitate a fresh inquiry into the nation’s system of talent production, where stricter home grown player rules will be on the table for the first time in decades.
You can’t win anything with (European) kids
FIFA regulations prohibit the international transfer of players under 18 by default, with a few specific exceptions. Intra-EU transfers are one such exception. Following Brexit, English clubs will no longer be able to sign players under 18 from EU clubs (and vice versa) using the Intra-EU transfer exemption. This means that clubs will be unable to bolster their academies here with talented young players from abroad. It will also prevent departures like those of Jude Bellingham and Jadon Sancho, with promising teenagers playing first team football unable to move to or from England until they are 18.
Clubs who have had success from such strategies – whether on the pitch, as with Arsenal’s recruitment of Cesc Fabregas, or on the balance sheet, as with Manchester City’s of Brahim Diaz – will be forced to narrow their scouting range in future. The rule is intended in part to encourage teams to focus on more local talent production and reduce the ‘stockpiling’ of young players by bigger clubs, although some smaller clubs may be aggrieved if they identify a talented player early in their career but cannot afford them by the time they are 18. There is also a slight risk of lowering the level of competition in the youth ranks of elite clubs, to the detriment of player development. However, the Fabregas success stories are relatively few and far between, and with most academy players never reaching the top of the professional game, there is a strong welfare argument in favour of limiting the age at which prospects are encouraged to up sticks and emigrate for their opportunity at the elite level.
The Magic 15 Points
The magic 40 points for Premier League survival is an oft-cited metric in football, but there is a new points threshold in town. In order to be eligible to play in England, all overseas players must now obtain a Governing Body Endorsement, beginning with a points based assessment.
The GBE has existed for some time, but now includes players within the EU, who would previously have been able to move freely under EU free movement rules. A player can bypass the full assessment if they are a key part of a highly ranked national team, but otherwise, they will need 15 points to qualify automatically, while a score of 10-14 will make them eligible for consideration by an independent panel with the power to grant GBEs on a case-by-case basis.
In addition to obtaining an endorsement from the FA, European players must satisfy the additional requirements for the T2 Sportsperson visa route. This includes their employer (team) issuing a valid Certificate of Sponsorship, applying for a visa and paying the visa fees and surcharges. There is also a financial maintenance requirement which can be met either by a player or his club (although this really shouldn’t be a problem for most teams!) and a minimum English language requirement. Most clubs should have some experience of the process from dealing with non-European players in the past, but there is clearly now an extra administrative and cost burden on clubs and the European players themselves.
The updated requirements may encourage more non-European players to move to England, as the work permit system is now unified for all incoming players. However, expect European transfers to still make up the bulk of overseas acquisitions for the top two divisions. Due to the high ranking of the major European leagues in the new GBE points system, any player who makes a match day squad in a league game (whether they play or not) for a club in one of Europe’s top five leagues, or gets used in a cup competition by that club, will get 12 points for that feat alone. Players in the Dutch or Portuguese top divisions, meanwhile, will still qualify automatically if they are first team regulars. It is therefore still likely to be easiest to bring players from Europe to the UK on an automatic endorsement.
Regular internationals in FIFA’s top 50 ranked nations will also get a free pass (the higher ranked the team, the less regularly a player needs to appear). However, lower league teams may struggle to show that their intended signings reach the points threshold even for a review – at which the player would still have to be deemed ‘of the highest quality’ to be granted their GBE. The system might consequently be hard on smaller clubs without the financial means to exclusively pursue established talent. If it were in place in 2014, Riyad Mahrez, playing in Ligue 2 and yet to make his Algeria debut, may never have been eligible to join Leicester, whose fortunes ever since might have been substantially altered. At the same time, though, the system is likely to ensure that academy players are able to break into first teams in the EFL and Premier League more readily, with the hope that this will accelerate their development and bolster the national team’s fortunes long-term.
One to Watch
Brexit’s effect on football transfers may not be immediately stark and obvious; many of the impacts, though important, will be subtle and take time to develop. It is not the bombshell that Bosman was 25 years ago, and many of the key changes – restricting overseas youth signings, limiting mid-to-low ranking European player recruitment and potentially promoting the use of local academy talent – are not headline-grabbing matters. Blockbuster transfers will not be affected and when finances stabilise, it will be largely business as usual for the biggest spenders in the market. Even the much-discussed “English player premium” should see minimal impact at senior level under current rules (although watch that space with younger players).
This relatively low immediate impact is to the credit of the FA, the Premier League and the EFL. Brexit has presented an opportunity – and doubtless a tempting one – to overhaul squad requirements and transfer policies for the first time since the Bosman ruling. However, with Covid-19 having already created so much uncertainty and disruption in the world of sport, the time was not right for further upheaval. There will be time – hopefully in the not-too-distant future – for the game’s authorities to consider how best to further adapt English football to existence outside of the EU within a more stable environment. For now, though, clubs have a set of rules with which they can comfortably work and which do not require them to throw their plans and scouting out of the window. And for the savvy and prepared, there may even be new world of opportunity.
For more information please contact Daniel McDonagh.