EU Withdrawal Bill: effect on professional sport in the United Kingdom

By Jonathan Copping, Stone King LLP, London, UK

The EU Withdrawal Bill (European Union (Withdrawal) Act 2018) was given Royal Assent on 26 June 2018, following 15 defeats in the House of Lords.

The Bill is an important piece of legislation in the process of the UK leaving the European Union as it repeals the 1972 European Communities Act and copies and transposes all existing EU legislation into UK domestic law.

The purpose of copying all existing EU legislation into UK law is to prevent disarray when the UK leaves the EU in March 2019.

Due to the introduction of the EU Withdrawal Bill, it is not expected that there will be an immediate impact on sport in the UK at the date of leaving the EU. However, there is uncertainty as to what the effects might be in the future.

One of the main issues is likely to be on immigration and free movement.

At present, EU nationals can move freely around the EU and are not subject to the same rules that apply to individuals from outside the EU and the EEA. Research produced by the BBC in 2017 showed that 332 players (as at the date of the report in 2017) would not meet the requirement which non-EU and EEA players must meet. The effect of such a rule would mean that professional sports clubs would need to rely on more home-grown talent.

Whilst the influx of top foreign sports ‘stars’ into professional sport has increased over the last two decades, some commentators have argued that it has diminished the chances of ‘home-grown’ individuals and, as a result, the performance of national teams. The English FA Premier League, for example, has seen a decline in the number of ‘home-grown’ players, competing each week in its matches.

The second main issue is regarding the economic impact on the sports sector.

The potential fall in the value of sterling could make professional sports teams less competitive, in terms of transfer fees and wages, compared with their European counterparts; however, it could also make the acquisition of professional sports teams more attractive to foreign investors, because the business will be valued lower than it would previously have been.

That said, these assumptions are based on the value of sterling falling against other currencies. It is, of course, possible that, once the post-Brexit confusion and uncertainty has settled, sterling may perform well against other currencies.

Broadcasting and sponsorship rights are another issue that could concern the sports sector post-Brexit.

At present, professional sports leagues in the United Kingdom attract huge sponsorship and broadcasting revenues and, in turn, allow teams to attract the best talent from around the world. If it is not possible for the world’s top sporting talent to perform in the United Kingdom, it is possible that broadcasters and sponsors will either reduce the amount they are willing to pay or leave the United Kingdom sports market altogether. The latter seems extremely unlikely; the former more likely.

Notwithstanding the passage of the EU Withdrawal Bill into law, the effect of leaving the EU on the professional sports sector in the United Kingdom remains unknown. The true effect will only be known once the United Kingdom passes its own legislation dealing with the issues that affect professional sport.

What can be said is that, due to the lucrative nature of professional sport in the United Kingdom, it is unlikely that Parliament will want to create any legislation that will take away its lucrativeness.

Jonathan Copping may be contacted by e-mail at ‘JonathanCopping@stoneking.co.uk’