Impact on the Premier League If UK Leaves EU

On Thursday, the British electorate will vote in a referendum on whether the UK should leave or remain in the EU. How would the so-called 'Brexit' affect England's top flight?

Earlier this week, all 20 clubs in the Premier League expressed support for the United Kingdom remaining part of the European Union (EU).

Chief executive Richard Scudamore was concerned that a Brexit vote this Thursday in the country's referendum was at odds with the league's commitment to ‘openness’ and would make it more difficult to protect intellectual property rights, mainly in the form of broadcasting contracts and merchandise.

"I believe we, in the UK, must be in Europe from a business perspective," Scudamore said in a speech to the Institute of Directors' annual convention.

"I believe in the free movement of goods, but when it comes to services, we must be entitled, especially in the audio-visual world, to territorialism."

Should a Brexit vote be successful, there will be a number of possible consequences that would greatly affect the Premier League and, as a result, European and world football as a whole.

IMPACT ON TRANSFER PRICES

A Brexit vote is likely to cause the sterling (£) to be weaker due to uncertainty about how the UK would negotiate future trade deals. There will also be less investment from overseas companies taking advantage of the UK’s access to the free EU trade market.

This would increase the price of signing players from overseas for Premier League clubs. For example, let’s say that Juventus put a price tag of €160 million on Paul Pogba. At the end of June 2015 the €/£ exchange rate was 0.709, but could easily move to 0.900 or even further should Brexit occur.

This would increase the price Premier League suitors, such as Chelsea or the two Manchester clubs, would have to stump up to land Pogba from £113.4m to £144m - a rise of over £30m. There would, however, be no change in the cost of buying Pogba for other clubs based in the EU, such as current favourites for his signature, Real Madrid.

If overseas players’ contracts were negotiated in € rather than £, this would increase the overall wage bills of Premier League clubs.

The combined impact of the above could give England's top-flight clubs problems in meeting Financial Fair Play targets should they attempt to boost their squads by signing overseas players.

A further issue would arise if the UK government applies tariffs to signings of player registrations, although this is one of many government decisions that would take a number of years to be applied.

A Brexit vote would at the same time make it cheaper for non-Premier League clubs to buy players from the UK, such as the standout player of Euro 2016 to date, Dimitri Payet of West Ham.

With the spectacular growth of football in China in the last 18 months, a player drain to the Chinese Super League could arise as Premier League players become relatively cheaper to sign.