Brexit Play-offs

What’s going on here?

Article 50 has officially been triggered. But how will the outcome of the negotiations impact the UK sports industry? 

 

What does this mean?

Arguably, the most problematic issue here is migration. Currently, the freedom of movement principle allows EU citizens to move freely within member states for employment.

However, as negotiations progress, there might be no agreement as to what happens to this fundamental freedom. This could result in the need for individual negotiations with each member state… a slow and uncertain process. If it comes to this, Maria Patsalos, partner at Mischon de Reya LLP has said ‘’it is unlikely… European nationals will have the same freedom’’ to move freely and pursue employment in the UK. 

 

Why should firms care?

In 2016, the Department for Culture, Media and Sport (DCMS) estimated that the Sports Industry contributed £35 billion to the British Economy. 

The legal framework has been left in a state of uncertainty after Brexit. As a result, according to KPMG’s recent annual survey, the UK has fallen in rankings as a ‘destination for Foreign Direct Investment' (FDI). Despite this, the assessment suggests that the UK is still an appealing place to do business, with foreign investors taking advantage of the weakened sterling. This is evident from the recent acquisitions of West Bromwich Albion and Aston Villa football clubs by Chinese investors. 

In the UK, the weaker pound and potential issues in immigration has caused a noticeable shift in the sports landscape. In the Premier League, this has incentivised clubs to hire top talent domestically as opposed to internationally. In effect, this could hinder the cosmopolitan feel of the Premier League, affecting viewership and sponsorship.

From a legal standpoint, sports departments of commercial law firms such as Bird & Bird will need to advise on brand management to deal with the shift of the sports scene. Focus should be on advising clients to ensure their main assets and contracts are tailored to accommodate any new changes that come up. With potential interest from foreign investment, firms can instruct on mergers and acquisitions

The full consequences of what Brexit means for UK sports are yet to unravel. Until things are finalised, the future for the industry and the law could be a bumpy one.

 

Article written by Arthur N.

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