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What would the impact of Brexit be on Everton and the Premier League?

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When politics and football come together, who wins?

The United Kingdom Goes To The Polls In The EU Referendum
Britain chooses to leave the EU
Photo by Christopher Furlong/Getty Images

The big news this morning is that the United Kingdom has voted to leave the European Union by a narrow margin. The result of this referendum is bound to have far-reaching consequences that the world of football is not immune from.

In the 2015-16 season, 432 European players were registered to play in the Premier League. While it is unlikely that those players will be asked to leave, new players will now not have an automatic right to live and work in Britain.

It might be several years before these changes go into effect, but Europeans would now have to follow the same immigration rules as non-European players with different regulations depending on the country’s FIFA ranking to obtain a work permit for the Premier League.

A player from a top-10 country must have played in 30% of their national team’s games in the two years leading up to the date of application, while a player from a country between 11-20 must have played in 45% of international games. That percentage then increases to 60% for nations ranked 21-30, and is 75% for nations ranked 31-50.

Investment banker Keith Harris, who has helped oversee the sale of numerous clubs, including Manchester City and Chelsea said to Sky Sports that he thought foreign investors in England received a big boost with the news though.

"If you're thinking of buying an asset in this country, then it's just cost a foreign investor overnight about 10 per cent less and that's attractive if they have confidence in the long-term future.

"We all knew an out vote would take two years to unravel. Gravity is a strong force in financial markets so when there is a shock, markets fall very steeply and take a while to climb back and that's what we're going to be seeing now. We're going to be treading water."

Everton owner Farhad Moshiri, who has shares in multiple steel and energy companies in the UK and Russia, could be affected by the decision to leave the European Union, depending on how much of his rumoured US$1.94 billion net worth is based in Britain.

Another big impact from the Brexit vote would be felt by the Everton Academy. Under Article 19 of FIFA’s Regulations on the Status and Transfer of Players, international transfers are only permitted for players over the age of eighteen. However, an exception to the rule has been within the EU (European Union) and EEA (European Economic Areas), where the age criteria is reduced to sixteen.

Legal firm Mills Reeve released a document explaining the various ramifications of leaving the EU would have on Premier League football. Expert Carol Couse, noted for her work in the field of sport, writes in the report -

In recent years alone, hundreds of players under the age of eighteen have been transferred to UK clubs under the EU/EEA exemption to Article 19. A small sample of the list includes Adnan Januzaj, Hector Bellerin, Nathan Ake, Bertrand Traore, Jon Toral, Charly Musonda, Josimar Quintero, Timothy Fosu-Mensah, Indy Boonen, Krystian Bielik, Andreas Christensen, Jeff Reine-Adelaide and Ismael Bennacer.

The Article 19 exemption is fundamental to how UK clubs acquire young, talented, and cost-effective players. Investing heavily in talented U18 players is the ultimate low-risk, high-reward strategy. Given the low cost of acquisition and the amount of money it would cost to acquire a high-calibre player on the transfer market, a club needs only a very small percentage of young players to develop into a successful professional footballer in order to see a positive return on its investment. This sort of youth development is extremely important in light of UEFA’s Financial Fair Play Regulations, which have forced clubs to wean themselves from building their squads exclusively through the highly-inflated transfer market.

Naturally, losing the Article 19 exception would have adverse consequences for UK clubs. It is crucial for clubs to sign talented players they have identified at the earliest possible occasion, so as to limit their acquisition costs (and boost their profits in the event of a subsequent sale of a young talent they have developed).

Losing the Article 19 exception would also affect UK clubs’ abilities to qualify their EU players as homegrown for the purposes of UEFA competitions. Currently, eight of the twenty-five players registered on List A for the Champions League and the Europa League must be “club-trained” or “association-trained,” and at least four of those eight players must be club-trained.

For Everton, this includes former players like Shkodran Mustafi , Francisco Junior, and Mateusz Hewelt, as well as current U18 Finnish striker Miko Virtanen who joined the academy at 16.

There is still the possible loophole of Britain asking to join the EEA (European Economic Area), but that would mean signing up for agreements that led to the initial economic discord to begin with.

She continues -

For EU clubs with similar scouting and financial resources, the loss of Article 19 for UK clubs could prove to be a significant advantage. Specifically, many of these young players who might have otherwise signed with UK clubs could now find themselves at EU clubs.

This is an area where Everton could find themselves being beaten out by the ‘upper-middle class’ clubs in Europe as they would struggle to attract players to their Academy despite the world-class facilities available.

The last few months have been tumultuous internally for Everton, but with Moshiri’s purchase of the club and subsequent hiring of Ronald Koeman as manager, it looked like some stability was finally on the horizon. The Brexit vote could change all that, let’s see how things turn out.