Adam Williams – Head of Football Finance and Governance Content for GRV Media – has shared a financial update on Aston Villa.
Concerns about Villa’s PSR situation have been rife for some time now, with the latest set of accounts showing a wages-to-revenue ratio of 91%.
While the Midlands outfit have managed to avoid any sort of punishment from the Premier League thus far, they were found guilty of breaching UEFA’s SCR (squad cost ratio rules) for the 2023/24 campaign.
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Aston Villa were told to pay a £9.5m fine with a potential further £12.9m deduction should they breach SCR over the next three seasons.
It’s a difficult situation for the club to navigate, but they have so far been able to avoid any PSR issues by, like Chelsea, selling their women’s team to themselves.
Wes Edens and Nassef Sawiris attend an Aston Villa match together
Photo by Neville Williams/Aston Villa FC via Getty Images
Aston Villa’s battle with UEFA’s rules and PSR
TBR Football have now spoken to our finance correspondent, Adam Williams, about Villa’s PSR situation.
He said: “The curiosity is that Aston Villa probably don’t have any real PSR issues for as long as the intra-company transactions loophole – which they used to sell the women’s team to themselves – remains open. They can continue to do this with other tangible assets and dig themselves out of trouble.
“However, they haven’t got the same grace under UEFA’s rules. They don’t recognise the intra-company transactions and, after Villa broke UEFA’s equivalent of PSR and their Squad Cost ratio rule, Villa have now agreed a settlement with the governing body. That will last three seasons, up to 2027-28. They have to have a maximum Football Earnings deficit of about £4.5m this season and then break even the following season.”
“There’s some flexibility in the settlement, true, but if Villa breach it then they can be kicked out of or barred from Europe next time around. I think it’s going to be difficult for them to get within the target for next season either without European football or significant profit on player sales.”
Jacob Ramsey during pre-season for Aston Villa.
Photo by Ben Roberts – Danehouse/Getty Images
Will Aston Villa keep spending?
Amid their ongoing financial balancing act, Villa have made some notable sales in the last few transfer windows.
Players were not happy about Jacob Ramsey’s exit to Newcastle United, but Williams has suggested they will need to keep making sales in order to continue spending.
On Villa’s potential to spend, he said: “So you have this paradoxical situation where they need to get into Europe to decrease the likelihood of them getting booted out of Europe. And to get there, they probably need to spend. Spending gives them a greater chance of success on the pitch but simultaneously eats into your headroom under UEFA’s spending rules. It’s a pretty byzantine situation.
“If I was Wes Eden or Nassef Sawiris, this would be the point that I’d be asking myself what my end goal is with this investment.
“Ultimately, you need two or three seasons in the Champions League before it has a real long-term financial impact and changes the financial fabric of the club, so I suspect that they’ll do everything that they can to somehow keep spending in the transfer market and wage race. There will have to be sales to get them there and you maybe have to look at optimising costs elsewhere too.”