What will the practical impications of Brexit be for the Premier League and transfers?
On 29 March 2017 the UK government activated Article 50 of the Treaty of Lisbon, initiating a two-year countdown to the UK's departure from the EU. The government has already said that freedom of movement of people will end in March 2019. From that date onwards, all foreign footballers – regardless of their origin – could require a work permit to sign for a club in the UK. This would have enormous consequences for British clubs and the future of British football.
Over the last 20 years, Freedom of Movement of People (FoM) has transformed English football beyond all recognition. FoM bestows citizens of the European Union (or the wider European Economic Area1) with the right to travel, reside and work in any member state. When an English football club decides whether to buy a foreign player it must consider the passport he holds. If the player holds an EU passport then there are no restrictions; from an employment perspective, he is treated the same as a UK national2. If he does not hold an EU passport the club must obtain a work permit to enable him to play professionally in England.
The rules governing the issuance of work permits are clear: the player must either be an established international for a top-50 ranked nation in Fifa’s World Ranking or the club must demonstrate that they are willing to pay a substantial amount, in transfer fees and wages, to bring him to England. There is clearly a huge difference between recruiting players from EU and non-EU countries.
A case-by-case analysis of nearly 1000 players imported since 1992, demonstrates that the majority would not have qualified for a work permit under the current rules, including players of the calibre of Cesc Fàbregas, Héctor Bellerín and N’Golo Kanté. I will show how the end of FoM will affect clubs according to their wealth and status and how it will reverse the demographic trend of the last two decades.
The Moment that Changed Football
In terms of contracts, the most important moment in English domestic football arrived on 15 December 1995 with a decision from the European Court of Justice (ECJ). Known as the Bosman Ruling after the player who brought the case, the ECJ’s ruling had two major consequences. First, on the expiration of their contract, players could move freely between clubs. Often referred to as a ‘Bosman’ transfer, a player would henceforth be free to sign for any club he wanted. Secondly, and potentially with even greater consequences, it was ruled that domestic quotas on players from other EU countries were illegal.
Prior to the ruling, EPL clubs were allowed to field a maximum of three “foreign” players in domestic league and cup matches3. A foreign player was defined as someone that held neither a UK nor an Irish passport. There was no distinction between players from Belgium and Brazil, even though Belgians had held the right to live and work in the UK for several years under FoM. 15% of the players that featured in the 1994-95 season were classified as foreign.
In December 1995 that quota was rescinded, immediately removing all restrictions on fielding players from the EU. Clubs were still required to obtain work permits for non-EU players – a significant obstruction – but, because of freedom of movement, the demand for footballers with EU passports grew enormously. Cultural barriers aside, there were now no differences between recruiting a player from the Netherlands or Newcastle.
In the earliest years, when the three-foreigner rule was in force, 90% of Premier League players held UK or Irish passports. In the years immediately following the ECJ’s ruling and the removal of the three-foreigner rule, the proportion of players from the rest of the EU increased rapidly, tripling from 8% in 94-95 to 24% in 97-98, with a corresponding decline in the number of British and Irish players. The number of players from non-EU countries also increased, but much more gradually.
Over the last twenty years, the EU/EEA has expanded, bringing 12 new countries into the FoM area. The proportion of UK and Irish players in the Premier League has continued to decrease: last season they accounted for only 44% of all Premier League players. Players from the rest of the EU accounted for 39%, with non-EU players accounting for 17%. Even in the Championship over 20% of players originated from the rest of the EU. There are few other industries in which freedom of movement has had such a large impact on recruitment.
The past as a guide to the future
The UK government has stated that freedom of movement of people will end when the UK leaves the EU. What would be the consequences for British football? It is unlikely that Premier League clubs would immediately be required to obtain work permits for all their non-British players and recruitment of players from EU countries would not simply cease. However, new players coming from the EU could well become subject to the rules that currently apply only to non-EU players. That is, all players who are not eligible for a UK passport would have to obtain a work permit from the Home Office.
To investigate the potential impact on British football, I looked at the characteristics of European players who have played in the Premier League over the past 25 years. At what stage of their career did these players come to England? How much international experience did they have? Crucially: what proportion of them would have qualified for a work permit? By answering these questions we can gain an insight into what might happen in the future.
To obtain a work permit a footballer must secure a Governing Body Endorsement (GBE) from the FA. Each season the FA publishes guidelines to help clubs determine whether transfer targets would qualify for a GBE.
There are effectively two paths by which a player can qualify. To qualify automatically, a player must have participated in a minimum percentage of his national team’s senior competitive matches in the preceding two years. The ‘minimum percentage’ is determined by the Fifa world ranking of the nation in question, as shown below.
If the automatic criterion is not met, the player can appeal. The appeals process is a points-based system that requires the player to have experience playing at an elite level abroad and that the purchasing club demonstrate the value of the player through the amount they are willing to pay for him, both in transfer fee and wages. This step is a little more complex, but it boils down to the following: if the transfer fee is above the average amount paid by Premier League clubs the previous year and the club is willing to make him one of their higher earners, then the appeals board can recommend that a permit should be approved.
It’s fairly straightforward to establish whether a player has played in a sufficient proportion of international matches, but the appeals process criteria are more difficult to assess. In particular, data on player wages is very hard to come by. To apply the secondary rules, I made the simplifying assumption that if the club paid an above-average transfer fee for the player, it would also pay him a sufficiently high wage.
How many EU players would not have qualified for a work permit?
Between 1992 and 2016, a total of 968 players transferred to a Premier League club from the EU/EEA (excluding the UK and Ireland4) and played at least one league match for that club5. This includes players who elected to play for a non-EU country but also possessed an EU passport (such as André Ayew, who was born in France but plays for Ghana). I examined the work-permit credentials of each player the first time they were transferred to an English club from abroad. I did not consider the cases of players transferring between English clubs: once a player has resided in the country, he may have recourse to other means of remaining besides a work permit.
Of the 968 players, only 402 – or 42% – would have qualified for a work permit under the current rules. Had they not held an EU passport, the remaining 566 players would not have been permitted to play professional football in the UK.
Fig 1 shows, club-by-club, the proportion of players who would have qualified for a work permit. For clarity, I’ve limited the plot to clubs that have imported at least 16 players from other EU countries since 1992. The plot does not include players recruited while a club was playing in a division below the Premier League.
Fig 1. Blue bars: the proportion of EU (excluding British and Irish) players since 1992 that would have qualified for a work permit under the current rules. Only clubs that have recruited at least 16 EU players are plotted. Players brought in while the club was in a lower division are not included. The red line shows the results when players under the age of 23 are excluded.
The big clubs – such as Arsenal, Chelsea, Spurs, Liverpool and Manchester United – would have been able to obtain permits for a much larger proportion of their European imports than smaller clubs, such as Derby, Swansea and Bolton. Two-thirds of Chelsea’s imports since the 92-93 season would have met the relevant criteria, compared to less than a quarter of those recruited by Watford, Bolton, Sunderland or Derby. This is not particularly surprising. The bigger clubs shop at the higher end of the European transfer market and are therefore more likely to purchase players that meet the international appearances criterion. Even if a player has not played the requisite proportion of matches for his country, the richer clubs have the financial firepower to meet the supplementary criteria for a work permit, paying large transfer fees and wages.
There is one exception to this that would predominantly affect the big clubs: the recruitment of youth players. The rate at which Premier League clubs have brought players under the age of 23 from elsewhere in Europe to England has been steadily increasing over time. In the five seasons between 1995-2000, 39 young European players made their debut in the Premier League. From 2000-2005 this increased to 55 players, and to 75 in the five seasons after that. Nearly half of these players went to one of the big six Premier League teams, compared to less than a third of older players.
With a few notable exceptions, young players are typically recruited as prospects for the future rather than immediate first-team players. As such, they would be far less likely to meet the necessary criteria to qualify for a work permit. The red line in Figure 1 shows the proportion of European players above the age of 23 that would have met the FA’s work permit criteria at each club. Excluding young players increases the proportion of players that would have qualified for a work permit at all clubs, but particularly at the biggest clubs where the youth recruitment drive from Europe is most intense. Once young players are excluded, more than 80% of Arsenal’s senior recruits would qualify for a work permit, with Manchester United, Liverpool and Chelsea also seeing a substantial increase.
There are, of course, players who would not initially have qualified for a work permit but went on to have successful careers at the club that brought them to England. Some examples are given in the table below.
A common characteristic of these players is their age on the date of their Premier League debut. Of the 20 players listed, 15 were under the age of 23, and 10 were under the age of 21. Arsenal players from Spain and France are heavily represented – including high-profile players such as Fàbregas, Bellerín and Anelka – indicating the degree to which their youth recruitment strategy and development program has benefited from EU membership. At the other end of the scale, Gianluca Vialli arrived at Chelsea in 1996 on a free transfer having not played for Italy for several years. Riyad Mahrez is included on the list because, despite playing for the Algeria national team, he was born in France and is a French citizen.
Table 1: Notable (non-British & Irish) EU/EEA passport holders who would not have qualified for a work permit when they first transferred to an English club.
There are several young players who are not on this list because of the amount their clubs were willing to pay for them. For instance, Manchester United paid Sporting over £12m for an 18-year-old Cristiano Ronaldo at the beginning of the 2003-04 season. The large transfer fee, combined with the significant number of matches he played for Sporting the previous season (including European competitions), means that he probably would have scraped through. David de Gea, who was 20 years old when United purchased him from Atletico Madrid in 2011 for £18.9m, is also likely to have qualified.
What might the future hold?
What would be the consequences if, at the beginning of the 2019-20 season, incoming players from the rest of the EU were subject to the same immigration requirements that currently apply to non-EU players? The ability of the top six to eight clubs to bring seasoned European players to the Premier League would be largely unaffected: these clubs already shop at the high end of the market, purchasing proven international players for substantial sums. However, their ability to bring in young, talented but unproven players would be severely hampered by the difficulty of obtaining work permits for them. Overall, the number of European players in the EPL would undoubtedly fall, significantly so outside the top six to eight English clubs.
A large 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 would presumably 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 horizons of most clubs and near miracles such as Leicester’s league win, would be become even less likely.
On the other hand, some will argue that a drop in foreign recruitment would be a positive thing if it affords greater opportunities to British players. Would it really be a tragedy if Liverpool couldn't call on Simon Mignolet or Loris Karius and were forced to look for goalkeepers closer to home? While the situation would be unchanged in terms of top-end recruitment at the elite clubs, even they would be forced to review their recruitment of young players from abroad. Homegrown players might have more of a chance of making it at the highest level.
The ECJ’s judgment in December 1995 triggered the greatest demographic change that British football has ever seen. In the future, we may look back to the 23 June 2016 as being an equally significant date.
 The European Economic Area refers to the countries in which Freedom of Movement of People (and Goods, Services and Capital) applies. It includes all 28 members of the European Union plus Norway, Iceland, Liechtenstein and Switzerland.
 For the sake of brevity I will refer to ‘EU players’ throughout; it should be assumed that this also encompasses players from EEA or EFTA member-states, i.e. Norway, Iceland, Liechtenstein and Switzerland.
 Uefa had a different set of rules for foreign players in Champions League, Uefa Cup and Cup Winners’ Cup matches that appeared less restrictive, but was actually far more so for British clubs. Clubs competing in these competitions could field 3 foreigners plus two ‘assimilated’ players, the latter referring to foreign players that had already played 5 years in that country. However, in Uefa’s eyes, Welsh, Scottish and Irish players all counted as foreigners when playing for English clubs, which was not the case in English domestic competitions. This rule wreaked havoc with Alex Ferguson’s team selection in Manchester United’s early forays into the Champions League.
 I omitted all players from the Republic of Ireland from the analysis. It would be nearly impossible to determine whether every Irish player could qualify for a British passport or residency through his ancestry or spouse
 This analysis used data taken from TransferLeague.co.uk, 11v11.com, transfermarkt.co.uk, futbol24.com, Wikipedia, www.parliament.uk and the Transfer Price Index of Tomkins & Riley.