The Political Economy of Football V2

The effects of the Covid-19 pandemic have been felt in this year’s transfer window, although Brexit has also had an effect. Clubs in Europe's nine biggest leagues plus the Chinese Super League have this season spent almost €3.5 billion less on players than in 2019/20.   Premier League clubs spent just €300 million less meaning the league's transfer balance deteriorated while others such as LaLiga improved, report offthepitch.com Europe's nine biggest leagues plus the Chinese Super League this season spent just €4.1 billion on players compared to a figure of €7.6 billion in 2019/20. That is a 46 per cent decrease - in actual numbers €3.5 billion less – a big difference seen in relation to the way spending has continued to rise for many years. "It's pretty much due to the financial implications of Covid-19 and the considerable amount of time with little to no fans coming through the door," says Chris Winn, MSc Football Business programme leader at UCFB...

Transfer spending across Europe's top five leagues is estimated to have fallen by 61 per cent as a result of the Covid-19 pandemic according to a report by CEBR:  https://www.standard.co.uk/sport/football/january-transfer-spend-expected-to-fall-by-61-due-to-covid19-pandemic-b917928.html The transfer market in the UK held up well in the summer when more than £1bn was spent by top English clubs.  However, it was distorted by one or two clubs with unlimited funds. The winter window is usually quieter than the summer one.  Even so, Premier League clubs spent £230m in last year's pre-pandemic transfer window.   They have spent just £65.1m so far this month.  The last time the total was below £100m was in 2012. In addition to the effect of the pandemic which has made clubs more reluctant to spend money, Brexit has also been a factor.  All foreign players must adhere to a new points-based system, based on factors such as how often they have played in top leag...

Work permit rules may seem a dry subject, but they will affect the ability of clubs to acquire players from Europe after January 1st as the free movement rules will no longer be in place. It's a complicated subject and I am not pretending that this authoritative blog post from top sports lawyer Daniel Geey is an easy read:  https://www.danielgeey.com/post/five-key-takeaways-from-the-post-brexit-fa-work-permit-rules/ From a purely football point of view, some fans will welcome what they hope will be more opportunities for young British players.   Clubs will not be happy about being able to easily pick up players from Europe.  In some cases their heritage is not European or they fall into some special case like the French overseas departments.

The FA and the Premier League are engaged in a battle over what happens over player visas after Brexit is completed at the end of the year. Many fans would like to see more English players being developed in the Premier League and EFL, while the Premier League is concerned that the global attraction of its offer is dependent on attracting some of the best world class players. The Premier League is increasingly reliant on overseas television revenues as domestic revenues have plateaued. After the Brexit transition ends those coming from the EU can be expected to be treated in the same way as players coming from other parts of the world. According to an analysis by the Financial Times more than half the players at Arsenal, Chelsea, Manchester City, Norwich and Wolverhampton Wanderers are EU nationals. Under the current rules homegrown players are counted as those registered with the FA for at least three years before they are 21 years old, regardless of nationality. That has allow...

The uncertainty surrounding Brexit affects Manchester City like any other business: Brexit and City But they also have more specific concerns. 'On the football side, the biggest single problem posed by leaving the EU will be the fact that European players will have the same status as players from the rest of the world when it comes to getting work permits.' 'City’s policy of recruiting the brightest teenage talent from the continent, once they reach 16, will be ended by Brexit – so importing young players like Aro Muric, Brahim Diaz, Eric Garcia, and Adrian Bernabe would simply not be allowed. The work permit problems would give European rivals like Barcelona, Real Madrid, and Paris St Germain a distinct advantage in terms of picking up young non-English talent.'

Top flight clubs have made clear their opposition to an increase in the quota of homegrown players after Brexit. They argued that there was no evidence that an improved quota would have an impact on the performance of England teams. The FA wants to impose a limit of 13 overseas players in the 25 man Premier League squads after Brexit. Only 35 per cent of European players in the league at present would be eligible for a work permit if existing criteria were applied. The clubs would like to maintain the status quo of 17 players, but a compromise of 15 seems likely.

Crystal Palace chairman Steve Parish thinks that Brexit provides a great opportunity for English football: Interview Apart from anything else, he thinks there will be a significant fall in transfer fees. He argues that Brexit offers an opportunity both for more diverse talent from around the world and for more homegrown talent.

This week Fifa released figures on the amount clubs spent in the 2018 transfer window: Big 5 leagues spending The numbers show that clubs in the Premier League spent $1.44bn on transfer fees, a slight decrease from last year's figure of $1.46bn. This is the first fall in the summer window when most of the spending takes place. The winter window often involves discarding disgruntled or failing players and some panic buying by under performing clubs. In contrast, clubs in Germany, Italy and Spain increased their spending. English side recouped almost $560m in player sales, more than in any other season since the start of the decade. The shorter transfer window and the absence of many players at the World Cup affected the time available to do deals. The fall in the value of the pound against the dollar and the euro also affected the spending power of English clubs, although some of them have income in euros from European competitions. However, there may have also been a Brexit...

The fall in the value of the pound against other currencies may hit smaller clubs harder than leading clubs. The biggest football clubs in the Premier League routinely hedge against currency movements, earning euros from playing in European competitions and dollars from international sponsorship deals. Smaller clubs with fewer international revenue streams may be stretched by the drop in the pound. Overseas footballers are seeking to defend their pay packets by hedging against the drop in the pound. Argentex, a boutique currency firm that specialises in services to the sports market, said there had been a 43 per cent increase in the volume of currency being hedged by sporting customers since the Brexit vote. The company, whose clients include Manchester City, allow individuals and companies to lock in the current exchange rate for several months, paying a fee of 1-3 per cent of the total amount hedged. In the Premier League, foreign nationals from 65 countries account for 70 per ...

The accounts of Red Football, the parent company of Manchester United, for 2016-17 have just been published. They make fascinating reading, not just in terms of the club itself, but as an illustration of how a major football club is seen as a brand to be marketed. Among the stated objectives is 'treating fans as customers'. Many fans object to this as they see it as downgrading their identification with the club so that they become the mere object of marketing ploys. Elsewhere they are referred to as 'the follower base' which reflects the fact that many of them never come to Old Trafford. Another objective is 'leveraging the global brand'. Leading the list of key business risks is 'maintaining and enhancing our brand and reputation'. 'The performance and popularity of our first team' is listed third. The report states, 'To be successful in the future we must preserve, grow and leverage the value of our brand across all revenue strea...

EightyFive points offers a comprehensive analysis of the implications of the end of freedom of movement after Brexit for football: Freedom of movement Of course, a lot depends on the actual terms of exit and the article looks at two contrasting scenarios: a status quo scenario and an end of free movement scenario. It is mor than likely that there would be seem some compromise between these two ends of the spectrum. However, under the end of free movement scenario, 'A significant drop in the number of EU/EEA players does not necessarily imply a return to the pre-Bosman era in terms of the quality of players on show. There would be no artificial quotas, and because of the money and allure of the Premier League, elite players will still want to come to England. The wealthiest clubs would continue to attract the biggest stars; the rest, on the other hand, would be forced to operate in a more restricted transfer market. Champions League places would move even further beyond the hori...