What to look out for in employment law in 2026 – Ahead of the Game: Sports Horizon Scanning 2026

The global sports sector, an industry reliant on international talent, flexible staffing and seasonal movement, faces a period of regulatory change. In 2025, we saw jurisdictions worldwide tightening immigration controls, enhancing tax compliance obligations, and grappling with workforce transformation driven by technological advancement and evolving ownership models influenced by increasing private equity investment that we expect to see develop into 2026.

Looking closer, 2025 brought some noteworthy legal developments for employers in the sports industry. In the UK, the government introduced measures making recruitment agencies (often used by clubs to source talent and event staff) and end clients jointly and severally liable for any unpaid Pay As You Earn (“PAYE”) and Class 1 National Insurance (“NIC”) on payments made to workers supplied via umbrella companies. Where no agency is involved, the responsibility falls directly to the end client business. This change, effective from April 2026, will fundamentally alter how sports organisations manage their contingent workforce.

At the same time, changes to UK immigration rules that took effect in July 2025 are set to reshape the landscape, especially with the overhaul of the Skilled Worker visa route, expected to impact many non-playing positions in sport. 

All these regulatory developments are unfolding against a backdrop of continued private equity investment in sports franchises, particularly American Private Equity firms acquiring football clubs, and the rapid integration of AI across operational functions, with the sport AI industry already valued at more than $2.2 billion and expected to soar to $30 billion a year by 2032.

Key developments and predictions for 2026

The ‘Americanisation’ of sport and long-term employment contracts

What happens when US private equity-led or backed acquisitions reshape UK football clubs (including Birmingham, Burnley and Ipswich)? In recent years, we’ve seen a distinctly American operating model take hold in UK elite sports, echoing similar shifts across European leagues like La Liga and Serie A. one of the most striking changes is the rise of lengthy player contracts, six, seven, even eight years, which were almost unheard of in UK football, becoming more common in 2025. This mirrors the US approach, especially in baseball, where longer contracts help manage financial and salary cap restrictions. Spain’s La Liga has also experimented with extended contracts, such as Athletic Bilbao’s notable 10-year contract with Nico Williams, but regulatory approaches still vary widely across countries. 

The employment law implications are significant: longer-term contracts create complex termination scenarios, necessitating sophisticated contracts with detailed performance clauses and termination rights. We anticipate increased employment disputes over contract terminations as a result.

At the same time, this investment model often triggers significant restructuring within sports organisations, as clubs seek to balance the costs of attracting top talent. We have seen multiple recent high-profile redundancy exercises in the sports sector. For owners, these changes can also offer a faster route to recouping their investment. 

Another trend worth watching is the further monetisation of club brands. Owners are exploring new revenue streams, such as partnerships with influencers and social media brands, and hosting brand promotion events. This shift brings more unconventional staffing models into play, including zero-hour contracts, an area where legislative changes are anticipated. 

The impact of AI and automation on sports workforce

Recent events like the 2024 Paris Olympics and the 2025 US Open have showcased AI-generated commentary and video highlight packages, offering fans entirely new ways to engage. For instance, the 2024 Olympics introduced ‘Your Daily Olympic Recap on Peacock’, where an AI-generated clone of Al Michaels delivered personalised daily streaming recaps, drawing on 5,000 hours of coverage and creating up to 7 million unique combinations. What other possibilities could this unlock for fan engagement? 

AI-generated content is opening up fresh, cost-effective opportunities for sports organisations, especially for non-major sports and smaller teams, allowing clubs to deliver unique fan experiences without needing to expand their workforce. But what does this mean for jobs in the sector? The shift is significant: as AI takes on more content creation and data analysis, traditional roles may be displaced, while the demand for technical skills to manage these systems grows. 

For sports businesses, clubs and member bodies, the practical challenge is clear. Robust risk management procedures, covering both redundancy planning and targeted recruitment, will be essential to capitalise on AI’s potential. 

Joint and several liability for PAYE and NIC in labour supply chains

In a significant move to tackle tax non-compliance in labour supply chains, the UK Government announced plans to introduce joint and several liability for PAYE income tax and NICs, effective from 6 April 2026. The government aims to recover £2.85 billion in unpaid tax between 2025 and 2030, including £75 million in the first year, rising to £895 million once the legislation is fully implemented. 

The Income Tax (Earnings and Pensions) Act 2003 will be amended so that recruitment agencies and end clients are both responsible for any PAYE obligations when an umbrella company forms part of a labour supply chain. This measure may impact the approximately 700,000 individuals who work through umbrella companies in the UK, with sports representing a significant proportion given its reliance on seasonal and event-based staffing for match-day operations, hospitality, and temporary support roles.

In contrast with this “gatekeeper” model placing compliance responsibility on agencies and end-clients, other jurisdictions address sports taxation differently, with several European countries, including Spain and Italy, for example imposing withholding tax obligations directly on clubs for player payments.

Skilled worker visa changes in the UK 

The Skilled Worker visa route has been overhauled with sponsored roles now required to be at Regulated Qualifications Framework (“RQF”) level 6+ (i.e., graduate level), the Immigration Salary List (“ISL”) being abolished by December 2026, and a new Temporary Shortage List (“TSL”) in effect allowing certain roles to be sponsored, but only temporarily and under stricter conditions.

The general salary threshold for Skilled Worker experienced workers increased from £38,700 to £41,700 (an 8% increase), whilst the threshold for new entrants increased from £30,960 to £33,400. This presents a practical challenge for the sports sector, which relies on a ‘hidden workforce’, from match day staff to those supporting training facilities, tournaments and community programmes. As of Q1 2025, the UK counted around 197,500 sports and fitness workers, many of whom do not meet the new RQF level 6 requirement. 

Some roles, such as groundsmen and greenkeepers, are no longer eligible for sponsorship under the new regime. Technical roles in motorsports can still be sponsored under the TSL, but with important caveats: they must meet the higher salary threshold, no dependents allowed, and industry access could be revoked by December 2026. Sports organisations should expect a period of realignment to come whilst they assess their international workforce.

What’s the impact on sports organisations? 

Sports organisations face a complex compliance landscape that demands swift, strategic action. 

Labour supply chain management: With new PAYE and NIC rules coming into force from 6 April 2026, organisations must quickly review where umbrella companies are used, tighten due diligence and clarify who manages these relationships. Steps may include requesting written confirmation that umbrella companies are operating PAYE appropriately for all workers and obtaining corroborating evidence, such as Real Time Information submissions to HMRC, payslips, or payment schedules.

For clubs and governing bodies, this means reviewing and auditing current use of umbrella companies for scouting, medical, coaching, and administrative roles, reassessing overseas recruitment pipelines, especially where payment structures are complex, and considering bringing more roles in-house to retain control over PAYE and NIC obligations. They should also ensure that HR, procurement, finance, and legal functions are aligned and fully apprised of their respective obligations under the new framework, promote organisation-wide awareness of compliance requirements, and train relevant stakeholders.

Immigration compliance: Review and adjust salary benchmarks to ensure salaries align with new thresholds, especially for extension applications or internal promotions, and re-evaluate TSL roles by considering sponsoring affected employees for the maximum permitted term now, in case sponsorship is revoked from 2026. Employers holding sponsor licences should audit every sponsored role linked to stadium operations, events, facilities, and community programmes, and if a role cannot be redesigned to meet RQF level 6, consider whether it could fall under the TSL and, if so, prepare a robust workforce plan showing local advertising and outreach, training or upskilling steps, and evidence why domestic supply remains insufficient for the role.

Clubs should conduct a comprehensive review of role profiles to identify opportunities to upskill positions to meet the RQF Level 6 requirement, which may involve restructuring job descriptions to incorporate graduate-level responsibilities or combining functions to create more senior positions. It is critical that senior leadership, HR teams, and operational managers are made aware of the potential recruitment challenges arising from these changes, particularly for essential support roles such as groundsmen, greenkeepers, and technical staff, enabling organisations to develop realistic succession planning and allocate sufficient resources for domestic recruitment and training initiatives.

Workforce planning and AI integration: Sports businesses, clubs and member bodies must have robust risk management procedures in place if they are going to capitalise on AI in their operations, with sporting bodies looking to employ AI without proper processes in place at increased risk of misuse of data and regulatory compliance issues. Conduct comprehensive skills audits to identify AI displacement risks and upskilling requirements. Develop transparent consultation frameworks for technology-driven workforce changes and invest in retraining programmes to redeploy affected staff. Ensure AI deployment in recruitment and performance management doesn't create discriminatory outcomes and complies with data protection obligations.

PE investment considerations: For organisations considering PE investment or currently PE-backed, ensure employment contracts reflect the performance-driven expectations of the ‘American’ operating model whilst maintaining statutory compliance with employment law. The trend towards longer contracts requires careful drafting. Anticipate increased scrutiny of restructuring decisions and ensure robust documentation of business rationale for workforce changes. Consider the cultural shift required to implement ‘American-style’ performance management within employment law constraints. As for the diversification of brand monetisation, sports employers should consider their staffing models and ensure they are compliant with the latest rules on “gig economy” workers and/or zero hours contract workers. Where sports entities are considering restructuring the business, prior thought should be given to redundancy processes and obligations to consult collectively (in certain cases). Failure to do so properly may result in a protective (monetary) award against it, which is due to be doubled to 180 days’ pay per affected employee under the UK Employment Rights Bill. 

The convergence of these developments demands a holistic, proactive approach to employment law compliance. Sports organisations that act now to strengthen their governance frameworks, enhance due diligence processes, invest in workforce development, and adapt to the shift in ownership structures will be best positioned to navigate the evolving regulatory landscape whilst maintaining operational effectiveness.

To read the full report for Ahead of the Game: Sports Horizon Scanning 2026, click here.