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What Does The Future Hold? The Effect of Brexit on The Bundesliga

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Trying to understand British politics is a waste of time but unfortunately it will destroy everything we love

BRITAIN-EU-POLITICS-BREXIT-INDUSTRY-FISHING Photo credit should read ANDY BUCHANAN/AFP/Getty Images

Since the UK voted to leave the EU in 2016, there has been a great deal of speculation about what this means. What does the process of leaving the EU look like? Will the Union stick together? Was Theresa May actually a spider stuffed into a pant suit? Does Boris’s father pick insects out of his hair and eat them? Why was Ed Miliband so ridiculously funny? Why was every single thing he did so funny? What was wrong with him and why was he so funny?

No one knows. Nobody. Stop pretending you know the answer to any of these questions. Brexit is a mystery.

But that hasn’t stopped us speculating. There has even been some discussion of the costs to football. Most of this has focused on the costs to the Premier League. By now the conclusion has been that it is probably going to be bad for English football. However, there has been a little less consideration of the costs to European football. I’m going to attempt to speculate wildly, and inaccurately about what Brexit might mean for German football.

What Brexit will look like

First it is important to understand just how vast the range of potential Brexit outcomes is. It’s not unreasonable to argue that anything from No Deal to No Brexit is possible. On top of this, there also isn’t really a clear likely outcome right now. Increasingly, No Deal is becoming the highest probability outcome, but there are still so many unknowns.

Britain has recently seen the leadership change hands, with Boris Johnson taking over from Theresa May as Prime Minister. He’s in a precarious position, and he has to choose between trying to maintain a minority government propped up by the DUP, or he can go back to the voters and try to seek a mandate to push on with his intentions to take the country out of the EU by any means necessary. Boris’s position is even weaker than May’s, as he is a polarizing figure and campaigned to leave the EU, which will draw ire from the 30+ Conservative MPs that are pro-Remain. Most signs point toward BoJo calling a snap election, in an attempt to capitalize on a possible peak in his popularity before he enacts any unpopular policies (or does/says anything stupid).

However, there is reason to doubt just how well the Conservatives are likely to perform in a general election. Polling data suggests that Johnson is reasonably unpopular with Remain voters, but he’s also not overwhelmingly popular with Leave voters. His total popularity is highest of current party leaders, but only just (Farage is just behind). There is also a real feeling that Boris is incompetent as well as unpopular. 58% of respondents in a recent survey viewed Boris as incompetent. However, it is in his favor that Corbyn is viewed as incompetent by 65% of respondents. If Labour had a more popular leader (such as Starmer or Thornberry) it is likely they’d be strong favorites to win an election.

Part of the problem Boris faces is that he’s unlikely to capture a great deal of support from Remain voters, who will choose either the Liberal Democrats or Labour, and he’s potentially in a real battle with The Brexit Party to win Leave votes. The likelihood is that the Conservatives will be the biggest party in an upcoming election, but can they win a majority? It seems unlikely.

The outcome of Brexit is heavily dependent on the outcome of a general election (if it was to happen). If the Conservatives strengthen their position, they can go back to the EU looking to negotiate another deal, and will have a better chance at pushing the deal through with a stronger backing from a more favorable Parliament. However, a weak performance from the Tories then opens the door to Labour, the Lib Dems, and The Brexit Party. If the Brexit Party perform particularly well, the Tories may have to seek a coalition with them, and the chance of a No Deal Brexit grow ever stronger. Alternatively, strong performances by the Lib Dems and even Labour would strengthen the case for Remain.

The reality is that anything could happen. Predicting Brexit is a fool’s errand, and right now, predicting any aspect of British politics right now is incredibly difficult. No Deal seems like the most likely outcome, but “most likely” in a universe of many low probability outcomes doesn’t really mean a great deal.

What Brexit means for English football

Given this, it will surely be difficult, maybe even impossible (and pointless) to try and predict what Brexit will mean for football. But I’m going to go ahead and do so anyway, because if the last few years have told us anything, it’s that an idea being stupid clearly doesn’t stop anyone going ahead with it. I will try to cover potential outcomes under No Deal and consider what might happen under other circumstances. Of course, No Brexit would simply mean the maintenance of the current status quo, so there’s little value in discussing that.

We may already be seeing, to some degree, what Brexit will ultimately mean for English football. Transfer spending has started to slow in the Premier League, likely in preparation for the hard times. Football clubs are probably as unsure as the rest of us what the future has in store, and they’re becoming more risk-averse in response to the potentially volatile circumstances ahead.

The big threat to English football posed revolves around the potential caps and costs on the signing of foreign players. Currently, there are different rules for European Economic Area (EEA) players and non-EEA players. The rules governing the signing of non-EEA players are significantly more restrictive, requiring work permits to be granted to players. The restrictions on work permits limit the number of non-EEA players a club can sign, and there is a strong possibility that the same could apply to EEA players after Brexit. Based on current regulations, estimates suggest that 75% of EEA players in the Premier League would not meet the requirements for a British work permit and would therefore be unable to play in the UK. It is unclear whether the rules would apply to players already in the country, but certainly there’s a chance that they would be applied to new signatures.

This is expected to result in a decrease in the number of foreign players in English football, and the cost of signing foreigners will likely increase (as higher transfer fees and wages increase the chance of success in appeals, leading to premiums paid to ensure successful appeals). On top of this, it has been claimed that the FA see this as an opportunity to impose stricter caps on foreign players, from the current 17 (of a 25-man squad) to ~13/12 players from abroad. They see this as to the benefit of the development of young English players. The Premier League are strictly against this, and have pointed out that there is very little to support the idea that more restrictive quotas would benefit the performance of the England national team. There is plenty evidence to support the Premier League position, but there is also some sense in the argument that greater access to first team football would benefit England’s youth.

All of this could potentially increase the inequality in the Premier League, as the process for appealing work permits will benefit clubs that are spending more. The appeal process is based on a points system that gives more points to the higher transfer fees and wages. This could easily see the elite clubs in the Premier League continue to bring in big name players, while the rest of the league struggles to overcome the new restrictions.

Given the likely increase in the number of English players being used in the Premier League, there is likely to be an increase in the valuation of those players. It’s no secret that English players come with an inflated price, and this seems likely to get worse in any scenario that further limits the number of foreign players playing in England.

Finally, these restrictions will not only apply to the players, but also all staff employed by football clubs. There’s a whole host of Europeans employed in English football, from backroom staff, to senior management, and the medical staff. These restrictions would probably not affect the head coach, but across all other areas, it is reasonable to expect that restrictions will reduce their numbers.

There have been calls for exemptions to apply to football, from exemptions that specifically apply to the football sector, to exemptions for entertainers, or for high-skilled workers. There’s certainly some possibility that this may occur. But a lot of these situations still seem likely to hand more power to the FA to make the decision, and given the opportunity, they will likely pursue greater restrictions on foreign players. They will face a power struggle with the Premier League if this happened, but I’m not sure I’d favor the Premier League in this.

What this all means for German football

Given the potential impact that Brexit will have on English football, there’s a number of ways this could affect German football. For the most part, I think discussion of the effect of Brexit on the Bundesliga and on Borussia Dortmund have focused on the positives, but I think the actual effect could be a much more mixed bag. There is certainly a number of ways that German football could benefit, but I don’t think it’s all good news.

General costs of Brexit

First, there is the very real economic threat posed by Brexit, especially No Deal. The impact of No Deal on the UK could be catastrophic, but there’s a real risk for the rest of Europe (and beyond) too. Global economic projections have been slowing in recent years, and there is a sense that we may be edging towards a recession. No Deal will be economically damaging for a number of countries, and it could be absolutely crippling for the UK. The ripple effects of this could easily tip several European economies over the edge as a result. Recessions can even hit the super rich. The growing economic bubble of European transfer spending may be more and more volatile in a No Deal situation. With the slowing of transfer spending, and the possible stagnation of Premier League TV broadcasting rights, there is already some reason to suspect that the end is nigh, but Brexit could be destructive.

Beyond this, the decreasing value of the pound against the euro could lead to the declining strength of Premier League and Championship clubs. Tottenham manager Mauricio Pochettino and the Stoke chairman Peter Coates (who also finds plenty of positives from the current situation), have said that the declining value of the pound is already having a negative effect on transfer spending. As the pound devalues, English clubs have to pay more for players from overseas. That has potential positives and negatives for the Bundesliga, as German clubs will be in a position to challenge the fees Premier League clubs can pay. However, they may also find themselves having to lower asking prices as English clubs are unable to pay as much as they once were, or they may simply find that the Premier League becomes a less willing suitor for Bundesliga players.

Football-specific costs of Brexit

German football has capitalized in recent years on the difficulty English players face gaining first team football, picking up some great young talents like Sancho, Lookman, and Reiss Nelson. Brexit could kill that pretty quickly, as those same players find themselves getting much more game time in their home country. In addition, freedom of movement could become restricted, English players could cost more, and the cost of doing business with English clubs could increase, leading to the death of this recently developed pipeline for young English players coming to Germany. That would be a real shame for German clubs, as they’ve so far profited off of the unwillingness of the Premier League to give youth a chance.

The cost of English players is also likely to increase regardless of age. Any English player becomes more valuable in a situation where the Premier League is expected to register at least 12/13 of them in their squad, and the fees demanded for the best English players is likely to be totally obscene. The cost of English players was already likely to be too high for most Bundesliga clubs. But this would only make things worse.

Finally, there is a possibility that English football clubs reduce their overall spending across Europe. There is going to be less demand for EEA players from the Premier League, and the total spending by the Premier League is likely to decrease. For the Bundesliga, which has plenty of history selling players to English clubs, this will be a real shame. There are some positives to take from this too (maybe German clubs won’t get beaten to transfers by English clubs), but it’s hard to foresee these positives outweighing the negative of a typical buyer reducing the amount they’re spending on Bundesliga products.

Positives of Brexit

There are a number of potential gains that the Bundesliga and the rest of Europe can make off of the back of Brexit. The biggest, and most obvious, is the damage Brexit will do to Premier League competitiveness in Europe, and the opportunity for German clubs to capitalize on this. In Europe, La Liga and Premier League clubs have typically dominated, with German and Italian clubs challenging but not surpassing this dominance. If Brexit reduces the available pool of talent for English football, and therefore the quality of the top English sides, the Bundesliga could climb above English football as a result. German football clubs will also be more competitive when shopping for young talented players around Europe, as English clubs will be unable to snatch up 16 and 17 year old’s, as they will no longer be part of the exemption banning the transfer of players under the age of 18. This is a huge positive for a club like Dortmund, who does a lot of work bringing in talented young players that are almost ready for first team football.

In the long term, there is also the very real possibility that the Premier League brand suffers. Though I don’t think this will occur overnight, long-term negative effects on the league could lead to England becoming a less popular destination for the biggest names in football. This could benefit the likes of La Liga, Serie A, and Bundesliga. This could ultimately lead to the shift of advertising revenue and broadcast money to other leagues as well. Right now, there is no doubting that the Premier League is king, but over time, there’s a possibility that we see the other big leagues in Europe become more popular. The Bundesliga is certainly going to look to benefit from this.

There is the potential for short-term gains in competitiveness, and even long-term benefits as the tight grip the Premier League has on global interest could begin to decrease. But nothing is certain, and there are also a number of possible costs.

Conclusion

As stated early in the article, it’s important to realize that any predictions based on an expected outcome from Brexit are a little futile. So I’d strongly recommend taking everything written here with a giant fistful of salt. A lot of what I’ve said is based on either No Deal or a relatively restrictive Brexit. Right now, if I had to bet one way or the other, I’d bet that one of these happens (probably No Deal). But I’m not remotely confident.

I’d encourage you to think about this article as a fun (/super depressing) but broad overview of the potential future after Brexit. The truth is that none of us know what it’ll look like. Maybe Boris Johnson will finally accept that he is a shaved orangutan, tear his clothes off, and swing from the trees into the forest. Maybe Britain will burn to the ground under his premiership after a No Deal Brexit that results in all foreign players being held as prisoners of war in a demand for all that NHS money they promised.

Who knows. No one.