The BookKeeper – Exploring Aston Villa’s finances and the owner-benefactor model

The Athletic has appointed Chris Weatherspoon as its first dedicated football finance writer. Chris is a chartered accountant who will be using his professional acumen as The BookKeeper to explore the money behind the game.

What follows is the latest in his series analysing the financial health of some of the Premier League’s biggest clubs. This time he’s tackled Aston Villa, but we’ve already published his analyses of Manchester United, Manchester City, Arsenal, Liverpool, Chelsea, Tottenham and Newcastle.

You can read more about Chris and pitch him your ideas. He has also written a glossary of football finance terms here.

It is a sunny day in Staffordshire and Albert Adomah has his hand up for offside, to no avail. The ball soars over him and drops into the path of Burton Albion’s Lloyd Dyer who, allowing it a bounce, soon thrashes it into the far corner. Dyer’s goal proves a crucial equaliser in Burton’s ultimately successful effort to survive in the EFL Championship that season.

Watching on helplessly with Adomah are nine others in the claret and blue of Aston Villa. A week into April in their first season in the second tier for almost three decades, Villa sit 11th in the table, a hoped-for promotion bid floundering. They will finish 13th.

Eight years and one day later, Villa travelled to Paris. Earlier this month, under the lights of the Parc des Princes, they met Paris Saint-Germain in the quarter-finals of the Champions League. Getting out of the Championship ultimately took Villa three attempts; it is a distant memory now.

The trip to Paris ended in defeat and while the return leg at Villa Park conjured up both a win and one of the best games of the season, Villa’s European dreams were punctured by Luis Enrique’s men. There was little shame in that. What’s more, Villa’s run to the last eight had the added benefit of boosting club coffers substantially. In the underwhelming 2016-17 season, Villa’s total revenue was £73.8million. Their prize money alone in this season’s Champions League is estimated at a mere couple of million below that sum.

Villa’s on-field metamorphosis has been propelled by big spending off it. The club has booked a profit just once in the past decade, a paltry £0.4m in 2021-22, and that was buoyed by the £100m sale of Jack Grealish to Manchester City. Villa are a long way from Burton Albion now, but the cost of travel hasn’t come cheap.

What do Villa’s recent financials look like – and what’s their PSR position?

The club’s 2023-24 financials, recently released, told the tale of another whopping loss. This time, £85.9m was the pre-tax deficit, though that marked a 29 per cent improvement on 2022-23’s club record £120.3m loss. A caveat to last season’s loss was the fact it covered a 13-month accounting period, meaning an extra month of costs in June, a time when revenues are slim. That provides only partial mitigation; Villa’s reasoning for shifting their year-end date was ostensibly to ensure they could book sufficient player profits to not fall foul of profit and sustainability rules (PSR).

In the six years since Nassef Sawiris and Wes Edens bought the club at the beginning of the 2018-19 season, Villa have booked combined pre-tax losses of £411.4m. In that time, only Everton (£553.3m) have lost more among English clubs.

Across the past decade, Villa have lost £570.5m, with £206.2m of that coming in the past two years alone. At the operating level, before any player sales, Villa have lost £284.8m in the last two seasons, or £375,000 per day. Only Chelsea (£431.3m) have lost more on a day-to-day basis in that time. Villa, as we’ll see, have only recently started to sell players for big fees; in the case of last season, doing so was a necessity to avoid a domestic PSR charge.

Player profits of £64.7m were booked into 2023-24, the majority arriving in a flurry of activity at the end of June 2024. Villa partook in multiple swap-like transfers last summer, a ploy undertaken by several Premier League clubs to boost bottom lines. In effect, deals that might otherwise have constituted player-swap-plus-cash deals were instead treated as entirely separate transactions, with the benefit of clubs being able to record higher player sale profits.

Villa engaged with three other clubs to that end. Tim Iroegbunam was signed for a reported £9m from Everton, with Lewis Dobbin passing the other way for £10m. Ian Maatsen arrived from Chelsea for £37.5m, as Omari Kellyman went to west London for £19m. Most crucially to Villa’s 2023-24 financials, midfielder Douglas Luiz departed for Italy and Juventus for €50m; Samuel Iling-Junior and Enzo Barrenechea left Turin for Birmingham.

The Luiz sale was integral, generating an estimated £40m profit. Without that, Villa would have breached PSR last season. Even with it, compliance appears to have been tight.

Unlike just about every other club bar Ipswich Town, Villa actually disclose costs deductible from PSR calculations, being: expenditure on youth development, community development and the club’s women’s team. Across the 2022-24 PSR cycle, the club spent £48.1m on their academy, £14.6m on community costs and £13.3m on the women’s team. On top of that, £13.7m was charged to depreciation and non-player amortisation, another deductible.

Villa’s pre-tax loss for the 2022-24 PSR cycle was £205.8m, leaving them needing £100.8m in deductions to meet the £105m allowable loss limit. Combined, the above deductions total £89.8m — or £11.0m shy of the required amount.

As to how Villa didn’t therefore breach PSR in the last cycle, the answer lies in their 13-month accounting period. Whatever their actual accounting periods, clubs are assessed on PSR over 36 months, so where the three accounting periods total more or less than that, clubs need to adjust their figures. In Villa’s case, it’s not as simple as taking 12/13ths of a given year’s figures because football clubs’ income and costs don’t accrue evenly over the course of an accounting period. How Villa adjusted their calculation is unknown, but it was this prorating that served to ensure they fell on the right side of the £105m line.

In terms of the current season, such hefty losses in the past two campaigns pose a problem for Villa again. Their 2021-22 small pre-tax profit falls off their PSR calculation in 2024-25 so, assuming deductible costs remain at the same level as last season, and further assuming they only just avoided a breach last year, The Athletic estimates Villa will be able to lose only £15m pre-tax and remain compliant with Premier League PSR.

That’s a huge drop on last season’s £85.9m loss, even with the return to a 12-month accounting period. Champions League revenue will help, but it’s clear to see why Villa have sanctioned the significant sales of Moussa Diaby and Jhon Duran this term. Whether it will be enough or more sales are needed before 30 June is unclear.

Dependent on how much the wage bill has increased this term, Villa might already have done just about enough, but The Athletic’s calculations (based, necessarily, on a number of assumptions) put their compliance in 2024-25 on a knife-edge. In that sense, a further player sale before the end of June would be of little surprise.

While domestic trouble has so far been avoided, the same can’t be said abroad. UEFA, unlike the Premier League, have put in place rules that aim to nullify the benefits of clubs engaging in those swap-esque deals mentioned earlier. UEFA requires sales proceeds on such deals to be measured at the value of the player in the selling club’s books, adjusted for any net cash paid as part of the deal.

In other words, Villa likely had to remove the £28m of profit they booked selling Iroegbunam and Kellyman, while the profit on the Luiz deal was reduced from £40m to, by our estimate, little over half that. Those adjustments push our estimate of Villa’s PSR loss across the past two seasons beyond the £150m mark — or well over the €80m limit UEFA allowed for clubs in the two-year monitoring period to the end of last season. That limit increases to €90m over three years for 2024-25, though, and with those profit reductions still in play, it’s unclear where Villa will land in terms of complying with UEFA loss limits.

Improved turnover – with more to come

Villa’s recent seasons have seen them display a paradox that is increasingly common at English clubs, whereby record revenues manage to result in record losses. That was the case for them in 2022-23, while last season, both Liverpool and Bournemouth did it. The correlation isn’t perfect, but in a general sense, increased incomes are compelling clubs to spend even more.

As we’ve seen, Villa’s loss did fall last season, though only via the last-minute Luiz sale. Meanwhile, record revenues were booked for the second year running, with club income hitting £275.7m; it will be three in a row in 2024-25 following their lengthy Champions League run.

Villa’s turnover growth last season was impressive, not least because it spanned all three main revenue streams. Broadcast income was up as a result of improved on-field performances, their fourth-placed finish generating £162.4m in Premier League prize money, up £14.1m on a season earlier. A run to the semi-final of the Europa Conference League, UEFA’s poorest relation, was far less lucrative, though did earn them £13.7m, their first income from European competition in 13 years.

Villa’s broadcast income was the league’s fifth highest last season, up four spots in a year. There was a similar relative improvement in gate receipts, where a strong 49 per cent increase saw them pass three other clubs compared to 2022-23.

Yet Villa’s £28m in matchday income was still bettered by eight other Premier League teams. Champions League football will have driven the figure higher again this season, but there’s a reason the owners are pushing to increase Villa Park’s capacity from its current level of 42,000 to more than 50,000. While catching the ‘Big Six’ any time soon might be deemed fanciful – Villa’s gate receipts currently trail West Ham United and Newcastle United by £16.6m and £22.1m respectively – these are gaps the club are doubtless keen to reduce.

Matchday income was the revenue stream with the greatest proportional uplift, but growth has been particularly impressive in commercial areas. Villa’s commercial income has grown £24.2m, or 62 per cent, in just two years, and at £63.3m overall trails only the ‘Big Six’ and Newcastle, who have enjoyed their own surge in sponsorships since their Saudi-led takeover in late 2021.

This season, Villa have new deals that should push income up further. Betano have replaced BK8 as front-of-shirt sponsor, with their reported £20m annual deal more than double what BK8 paid last season. Trade Nation signed back on as the club’s sleeve sponsor, doubling their commitment to £4m per season. Adidas will also take over as Villa’s kit supplier in a lucrative new deal that should increase on the £4m Castore paid.

Of course, the biggest driver of further revenue growth this season is the Champions League. Villa are estimated to have earned more than £70m from their exploits, ensuring they, like Newcastle last season, will top £300m in income for the first time. Outside of the ‘Big Six’, they are the only two English clubs to have managed the feat.

A fast-growing wage bill, reflecting Champions League contention

While revenue has grown by 50 per cent in the past three seasons, it has been significantly outpaced by wages. Villa’s £252m wage bill last season was up 83 per cent on 2020-21, and even if we prorate it to adjust for the extended accounting period, growth would still be 68 per cent.

On a pure numbers basis, only Arsenal’s wage growth surpassed Villa’s in 2023-24. Staff costs at Villa Park jumped £57.8m (£38.5m prorated), reflecting both squad investment and the success of qualifying for the Champions League — bonuses are paid when qualification is achieved, so fall into the season before the actual competition is played.

Even with those bonuses and the extended accounting period, Villa’s wage bill was only the sixth highest in the Premier League, so finishing fourth under Unai Emery represented an over-achievement in that sense. Emery has firmly bucked the trend of recent Villa managers in the top tier, over-performing the club’s wage bill in each of his seasons in charge so far (they finished seventh with the eighth-highest wages in 2022-23).

Wage bills are generally held up as the best financial indicator of where a club will place in a league season and, before Emery’s arrival, Villa had finished lower than their wage bill ranking in nine consecutive Premier League seasons. Such failings were most pronounced in their 2015-16 relegation year, when they finished bottom of the table with the seventh-best-paid squad in the division.

While Emery has plainly done a good job, it’s not like Villa haven’t spent heavily on wages either. In jumping to sixth in the wage bill ranks, they’ve dislodged Spurs, and while that might say something about the north London outfit, the extent of Villa’s ambition is clear. With Champions League football and the big money signings of Amadou Onana and Donyell Malen, not to mention the January loan arrivals of Marcus Rashford, Marco Asensio and Axel Disasi, expect another record wage bill in 2024-25.

Villa’s wages as a percentage of turnover sat at 91 per cent last season, a league high. That was impacted by the extended accounting period, but even if we prorate wages down, we’re still left with wages-to-turnover of 84 per cent. Only three clubs — Nottingham Forest, Fulham and Bournemouth — spent a higher proportion of their income on staff costs in 2023-24.

That marks a five per cent reduction for Villa on a year earlier, though it’s still notably up on the two seasons before then. Villa’s wages have consistently sat beyond the 70 per cent mark UEFA has long advised clubs to aim for, and while that’s not unique among Premier League clubs, it does point to why profitability has been hard to come by. Villa’s wages-to-revenue ratio has only slightly dipped from the 86 per cent of their 2015-16 relegation season.

Is that a concern? From a sustainability point of view, not really, because that isn’t a (current) aim for the club. Villa are being run with growth in mind and have owners willing to pick up the tab. However, the high relative wage bill is behind the current PSR problems the club are having on the European stage, and was a key driver in the need for those late-June sales last year. As mentioned, Villa will enjoy record revenues on the back of the Champions League run in 2024-25; it will be interesting to see whether it outpaced wage growth this year.

Are Villa now effective sellers?

With Villa and Newcastle firmly viewing one another as rivals seeking to break into English football’s elite, it’s interesting they’ve employed slightly contrasting approaches. Both have spent heavily on players, though the mix of that spending has been quite different: Villa’s wage bill has surged beyond Newcastle’s, but the latter have spent more on transfer fees.

To the end of June 2024, Newcastle’s squad cost was more than £100m higher than Villa’s, when before the former’s October 2021 takeover, it had been £38.3m less. Villa have made up some ground this season, particularly because Newcastle have spent minimally in 2024-25, but the difference between the two is noteworthy.

Through acquiring some key squad members for low fees — Youri Tielemans and Morgan Rogers, for example, will have cost just £16m combined even if all clauses possible on the latter become payable — Villa have been able to use more funds on wages and, in turn, build an impressive squad.

Not that Villa’s squad has come cheap at more than half a billion pounds. Over the past five seasons, Villa spent £652m on new players (the sixth highest in England in that time) while recouping £250.4m on sales (eighth highest), for a net spend of £401.6m. Only five English clubs spent more on a net basis and Villa’s net transfer spend in that time was larger than both Manchester City’s and Liverpool’s.

Villa have booked £184.6m in profit on player sales in the past three seasons alone, a figure only three English clubs — Chelsea, Manchester City and Brighton — topped in that time. This season, they made £64.9m in the summer window and January income was a further £70m-plus.

Yet there are caveats to the idea of Villa as a club employing the sort of high-volume player trading models seen at the likes of Chelsea and City. £100m of that quarter-billion in sales between 2020 and 2024 came via City’s purchase of Jack Grealish, while a further £68m stemmed from those not-quite-player-swap deals of last summer.

Meanwhile, Villa have benefited significantly from the arrival of Saudi Arabian clubs on the world transfer stage. The vast majority of this season’s income came from selling Diaby and Duran to Al Nassr, which, while perfectly valid sales, might not be classed as a sustainable source of income.

The owner-benefactor model, writ large

Villa have long been the beneficiaries of significant owner funding. Indeed, Tony Xia’s investment was exactly what led to the club falling into trouble under his watch; when the owner could no longer get his money in, the club couldn’t meet its liabilities of its own accord.

Since Sawiris and Edens took over, to the end of last season, Villa had received £601.3m in cash from their owners, pretty much all of it as shares. If that sounds like a lot, that’s because it is. Only Chelsea among English clubs have received more from shareholders in that time.

A look at Villa’s cash flow clearly illustrates the owner-benefactor model employed at Villa Park. Across the past decade, Villa have lost £198.2m in cash from operations, reflecting those continued losses we covered earlier. What’s more, investing activities — principally, buying and selling players — have drained a further £506.8m from club coffers. £430.9m of that went on net transfer payments.

Those cash losses were underwritten by more than £700m in equity injections in the past decade and while the owner-benefactor model is hardly a rarity in football, and English football in particular, it’s been employed to an extreme level at Villa.

While Sawiris and Edens have overseen significant investment in their time at Villa Park, more recent capital injections have come from elsewhere. Atairos, an American investment company, bought into V Sports, Villa’s ultimate controlling party, in December 2023. The £94.0m injected into Villa in August and October of last year came via Atairos issuing new shares in V Sports. Correspondingly, the group’s beneficial stake in the club grew by a shade under 10 per cent, to 31.08 per cent. Sawiris and Edens each own 34.46 per cent. Whether that trend will continue is unknown, but Villa aren’t short of wealthy backers with appetites to invest.

While the bulk of expenditure has gone on improving matters on the field, Villa have spent off it, too. Under Sawiris and Edens, £69.4m has gone on improving infrastructure, the eighth-highest in England in that time. The four biggest spenders in that period have all either built new stadiums (Tottenham and Everton) or undertaken significant upgrades to their existing homes (Fulham and Liverpool), so Villa’s investment here looks all the more impressive in lieu of any such big projects.

Not that they’ll want the latter to persist. Plans to redevelop the North Stand at Villa Park were shelved in 2023, but in December 2024, the club announced a regeneration project expected to cost more than £100m. The plan includes a 3,500-seater venue to enable entertainment events to take place all year, no matter the weather, alongside a plaza that connects Villa Park to the club shop and a general widening of space around the stadium. The plans are ambitious and linked to Villa Park’s role as a Euro 2028 host venue, though they remain stuck in the development stage.

What’s next?

It is easily forgotten just how close to the brink Aston Villa were in 2018. When Sawiris and Edens walked through the door, they came to a club whose owner, Xia, appeared no longer able to support it. Unable to move funds out of his native China, hefty spending under Xia in a thus far failed attempt at promotion threatened to derail the club. Tax bills were missed, winding-up orders served. Administration, hushed though the tones might have been, wasn’t an unrealistic possibility.

That fate was swerved and fortunes have mostly trended upward since. Sawiris and Edens have invested big sums and been rewarded with big improvements. Promotion was achieved swiftly and while the trend hasn’t been uniformly upwards, Villa are well removed from the lows of less than a decade ago.

This season’s Champions League run was thrilling and a welcome boost to club coffers. It also felt needed. Aston Villa have thrown a lot of money at things in recent years and losses have climbed significantly in the past two seasons, so increased revenues are not just welcome but required if they are to comply with football’s financial rules. Or, at the very least, not wildly overshoot them. Even with more than £70m in UEFA income this season, the club has still undertaken big player sales.

It is becoming a running refrain across most top-half Premier League clubs, but of paramount importance for Villa is returning to the Champions League next season. Tuesday evening’s loss at Manchester City will trouble Emery in that respect. Villa’s run to the last eight means another go at things next season will bring better takings from the competition’s ‘value pillar’, which rewards clubs for historic performance in Europe.

The direction of travel has been clear over much of the past six years, but while there’s no sign of backing from the owners waning, PSR regimes are starting to bite. Missing out on the top five – and therefore on Champions League football – would be a big blow.

(Top photo: Ethan Miller, Kevin Dietsch/Getty Images; design: Eamonn Dalton/The Athletic)

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