Premier League clubs are having to adjust to a new operating environment after sterling hit a new 31-year low on Brexit fears. Some would argue that this is the result of exaggerated fears raised by the Remain campaign, others that the economic consequences of Brexit are making themselves felt.
Premier League clubs are having to adjust to a new operating environment after sterling hit a new 31-year low on Brexit fears. Some would argue that this is the result of exaggerated fears raised by the Remain campaign, others that the economic consequences of Brexit are making themselves felt.
When Zlatan Ibrahimovic signed for Manchester United last week, his sterling denominated pay packet was worth 10 per cent less in dollar terms. However, on a reported £220,000 a week, he felt able to take the hit and currency fluctuations were not a major feature of the negotiations.
However, other clubs are taking advice on how Brexit will change how they sign players, giving the growing numbers of sports lawyers a new pay day. The sharp fall in the pound will land clubs with higher bills this summer, although the new Premier League television deal will help to ease the pain.
Leading sports lawyer Daniel Geey commented, ‘If there is a euro amount to a player’s buyout clause, that amount has become more expensive and has potentially scuppered deals.’ One source from a Championship club said that an Italian player had demanded more money after the 23rd June and the deal had fallen through.
The biggest clubs are hedged against currency fluctuations as they earn euros from playing in European competition and dollars from international sponsorship deals. Smaller clubs are likely to be stretched by the drop in the pound.
However, the bigger story is about player acquistion and development. All that depends on what happens what sort of settlement is reached with the EU in the Article 50 negotiations. If the rules for non-EU visas were applied after Brexit, promising youngsters would find it hard to come to the UK Premiership if they had not played for their national team.
Football economics guru Stefan Szymanski has also suggested that Brexit could change the UK’s status in world football. The four home nations have 50 per cent of the vote at the International Football Association Board, the games leading rule making body. This gives them an effective veto on changes to the rules of the game.
Speaking from the United States, Szymanski told the Financial Times, ‘There could be a movement that says, while we’re in the process of downgrading [the UK’s] status in the world, why don’t we remove some of these anachronisms as well?’
It should, of course, be pointed out that many fans would like to see fewer foreign players in English teams as their presence is thought to deny chances to home born players and helps to explain the poor performance of the national team. One might also add that players for many other countries gain experience in a wide variety of leagues, while most British players tend to play in the Premiership. Gareth Bale is an exception, but his experience of La Liga has undoubtedly helped Wales.
What goes down may go up. A lot of the current uncertainty surrounding sterling arises from the fact that the UK has a caretaker government, while the main opposition party is in meltdown and can’t function as an adequate opposition.
The outcome of the Conservative leadership is still very uncertain as the party’s grass roots members favoured Brexit, while the Parliamentary party had a majority for Remain. If ‘head girl’ Theresa May becomes prime minister, sterling will probably stage a recovery. The naughty girl from the fourth form, Andrea Ledsome (Salmon when she was a Warwick politics student) is more of a risk in those terms. Michael Gove may, of course, yet make the ballot. However, he gives the impression of someone who has just arrived from the Planet Zog and would be easier for May to beat.