This summer has highlighted a significant change to the recruitment landscape for Premier League clubs and their academies.
Most top-flight English sides have turned to the EFL as a pipeline to feed their academies.
The analysis of this development has revealed that it can be linked to the effects of Brexit, strict Profit and Squad Cost Ratio (SCR), and a number of other factors.
Lower tier clubs are facing a struggle to protect their best talents, with the evolution of prospect acquisition by Premier League sides having become a competitive necessity and necessary financial hedge.
How Brexit Changed Premier League Youth Recruitment
Before the UK left the European Union, Premier League clubs routinely picked up the best U-18 players from clubs in Europe.
Cesc Fabregas, Paul Pogba, Hector Bellerin, and Gerard Pique are a few examples of players who moved to the Premier League in the 2000s at 16, 17 years old.
The Governing Body Endorsement (GBE) rules that came into effect after Brexit and restrictions to FIFA's Article 19 which allowed teams to move players between countries in the European Economic Area changed the transfer landscape for youngsters.
English clubs were banned from signing youngsters from foreign markets until they turned 18, and this caused a shift in their strategies for bringing in young talent.
With a strict confinement to teams within the UK, clubs have had to become creative with how they sought players for their youth ranks.
Category One top-flight academies have now pivoted the bulk of their scouting infrastructure towards clubs in the Championship, League One, and League Two.
This year alone, Chelsea have signed Yisa Alao from Sheffield Wednesday and Harrison Bettoni from Wigan, Arsenal have signed Axel Donczew from Cardiff City, Manchester City have signed Jeremy Monga, and Tottenham Hotspur have signed Maxwell Adedeji.
Other clubs have also been active in their pursuit of the best youngsters in the EFL, as well.
The likes of Alao, Bettoni, Donczew, and Monga have all played senior football for their respective clubs, but will now enter into the Category One youth teams of their new clubs.
Under the GBE system, the issuance of work permits for players coming in from abroad at 18, also, is a significant bottleneck for clubs in recruiting for their academies.
For example, Liverpool's 18-year-old Austrian defender Ifeanyi Ndukwe is ineligible for a work permit in the UK and will need to spend time out on loan to gain eligibility.
Players signed from EFL clubs normally have no such problems, essentially making them plug-and-play options.
Why EFL Academies Have Become Financially Attractive
As with every business transaction, football transfers are carried out with the aim of some financial gain.
Top-flight clubs have found a financial arbitrage opportunity in signing young players with a high upside from lower league teams.
The introduction of Financial Fair Play (FFP) regulations has incentivized teams to sign players into their academies.
Players who pass through a club's academy represent zero amortized transfer cost on the balance sheet.
What this essentially means is that clubs can transfer said players and get 100% "pure profit", freeing up room within the strict FFP regulations to offset senior spending.
This knowledge makes the acquisition of too prospects from EFL sides tantalizing, as they could move for much bigger fees and the club will earn a tidy profit.
What makes it even more appealing is that many youngsters picked up from EFL sides would have gotten significant exposure to a first-team environment and conditions at their previous club.
They would normally be young enough to still play in the academy but have experienced some senior football.
As a result of this, many of them breeze through the academy ranks and may move elsewhere for a fee, earning the club a profit.
Similarly, clubs take advantage of the Elite Player Performance Plan (EPPP) framework in picking up youth players from lower divisions.
Several EFL clubs tend to give opportunities to young players before they turn 17 and can sign their professional contracts.
At this point, Category One teams can swoop in and pick up the players for standardized compensation fees.
These fees are usually a fraction of what such players would command in an open market.
Clubs can get to sign these players for thousands of pounds at 16, rather than paying millions to sign them after they sign their first professional contracts.
How Premier League Recruitment Puts Pressure on EFL Academies
Premier League and UEFA regulations require that clubs have a minimum of eight homegrown players in their 25-man squad for the season.
To qualify as a homegrown player, a youngster needs to spend three seasons (or 36 months) on the books of a club affiliated to the English FA or Welsh FA before they turn 21.
When top-flight clubs pick up the best youngsters in EFL clubs and develop them, it puts them in a position where they can easily boast of homegrown players to fill their registration quotas.
This especially comes in handy when the alternative is to spend millions on homegrown players in the market in a bid to satisfy registration requirements.
The major downside of this recruitment shift is the threat it poses to EFL academies.
Clubs in the EFL invest millions into their academy set-up to ensure that they have the necessary infrastructure and personnel in place to develop players.
The trend of losing these youngsters for a negligible fee in the form of compensation threatens their very existence.
There have been cases of academies downgrading their academies or dissolving the entire structure in favour of seeking alternative models to develop players.
Statistics have shown that the Premier League's aggressive recruitment from the EFL is on the rise, as more teams buy into the idea.
Ultimately, there must be a fair balance between the financial ambitions of top-flight sides and the sustainability of EFL academy set-ups and the EFL, in general. This task poses a challenge to English football, which must be taken seriously.
