Brexit blow for football clubs: Pogba cost Manchester United £9 million extra

Sarah Coles
·3-min read
Manchester United v Southampton - Premier League - Old Trafford
Manchester United v Southampton - Premier League - Old Trafford



The Brexit vote made the world-record transfer deal, bringing Paul Pogba from Juventus, even more financially painful for Manchester United. Apparently the deal cost them £9 million more than it would have done if we voted to stay in. And it's not the only club that must be wishing the vote had gone the other way.

Since Britain voted to leave the EU, the pound has declined dramatically against the euro - in fact is has dropped an impressive 12%. And while this has been expensive for those of us who spent a few hundred pounds in Europe this summer, British football clubs spending millions in Europe felt the change even more keenly.

Millions

Take the Pogba transfer, for example, Manchester United had to pay Juventus just under €105 million euros for the transfer. Back before the Brexit vote, that would have set them back £80.1 million, but as they did the transfer after the vote, it cost them £89 million.

Chelsea also paid through the nose to transfer David Luiz from Paris St German - at just over €40 million. Before the vote that would have cost them £30.6 million, whereas in reality it set them back £34 million. Because Chelsea also paid to bring Georges-Kevin Nkoudou from Fiorentina at a cost of just over €10.6 million, they ended up paying over £4 million more because of the Brexit decision.

Leicester City, also paid almost £3 million more to bring Islam Slimani from Sporting Lisbon, and Tottenham paid more than £2 million more to transfer Marcos Alonso from Marseille. Rupert Lee-Browne, CEO of Caxton FX says: "Although they are multi-million pound organisations, football clubs are not immune to the fluctuations of the currency markets."

Protect yourself

It is perfectly possible for anyone exchanging large sums to protect themselves from currency fluctuations. It's just that the Brexit vote was so close that we have no idea whether football clubs thought it was necessary.

It comes as a useful reminder that if you have to transfer large sums of cash overseas, you need to bear currency fluctuations in mind. This is a serious consideration for anyone considering emigrating, or buying a holiday home overseas.

If you are concerned that the pound could lose value against the currency you are switching to - possibly pricing you out of the property purchase at the last minute - you can protect yourself.

There are a number of possible ways of doing this. One of them is to leave yourself a long window of opportunity for the currency exchange, so you can buy when the currency is well priced. Of course, this doesn't help if the pound is doing badly at the start of the window, and worse at the end.

Alternatively you can call a specialist money broker. They will talk you through your options, and may offer you a forward contract. This will fix the exchange rate at a particular level, and will hold it until you need to exchange the money - even if it takes up to three years.

You are tied to taking the deal you agreed - no matter what happens. It means that if the pound falls further, you will get a better exchange rate than the market rate. However, if the pound recovers, you'll end up over-paying. There's no guarantee you'll save money: the real benefit is being able to guarantee what it will cost you, whatever happens.


            In profile: Paul Pogba
In profile: Paul Pogba