Aston Villa’s PSR situation is very much on a knife edge going into the new financial year.
Aston Villa are one of 15 Premier League clubs for whom 30 June is the end of the 2024-25 accounting period.
The Athletic has estimated that the Villans can only afford to lose £15million pre-tax in 2024-25 and remain within their threshold for the 2022/23 to 2024/25 three-year PSR cycle.
Under PSR rules, Premier League clubs can lose a maximum of £105million over a rolling three-year period.
And Villa have lost £206.2million pre-tax in the past two seasons, the highest deficit in the Premier League in that time.
However, there is a way in which Villa could give themselves a huge amount of breathing space ahead of the accounting deadline.
Adam Williams, TBR Football’s Head of Football Finance and Governance Content, explains how the Villans can effectively kill off their PSR issues.
Aston Villa could potentially earn £60m from selling stake in women’s team
Back in April, The Times reported that Villa were considering selling stakes in the women’s team to comply with PSR.
Chelsea sold their women’s team to owners BlueCo last summer for around £200million, helping them turn their previous £90million loss for 2022-23 into a £128million profit for 2023-24.
Williams believes Chelsea have set a precedent in selling their women’s team, and the likes of Villa could look to follow in the Blues’ footsteps.
“I think a precedent has been set by the Chelsea situation and many clubs will now think they have carte blanche to use this kind of manoeuvre to bypass PSR,” said Williams.
“At least for the time being, the loophole is going to remain open. That means Villa can use it too.
“There were reports saying that they valued the women’s team at £60m, so that’s ostensibly £60m worth of PSR headroom they can give themselves as long as the loophole is still an option.
“They also have £27m worth of tangible assets – property, equipment and so on – that they could potentially use in similar intra-group deals. The £27m value in the accounts doesn’t reflect market value, but it gives you a flavour of what might be possible.
“For Villa, £60m or more of PSR headroom could potentially be season-defining. It would create so much more breathing space, especially as they are one of the clubs closest to a breach and they don’t have Champions League revenue to bank on next season.
“They had the highest wages-to-turnover ratio in the league in the last financial year and their player amortisation is very high too.
“Many analysts were and continue to be sceptical about the value of the women’s team. Any sale would be assessed for fair market value by the Premier League, but the fact Chelsea have sold a minority stake at a rough value of £200m gives Villa a benchmark to see what they can get past the analysts.”
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Could the intra-group asset transactions loophole be closed?
The Premier League consulted with clubs on a proposal to hold a vote on a rule change in advance of the league’s annual general meeting last week.
Said rule change sought to have the sale of such fixed assets excluded from clubs’ PSR calculations.
However, the proposal did not gain sufficient support to put it to a vote, meaning the loophole will stay in place for now.
“My instinct is that clubs might herd in a different direction when the loophole issue next comes to a vote,” Williams said.
“There are a lot of moving parts with PSR at the moment with the new system expected to be introduced from the season after next.
“Once there is a clearer picture of where we are headed with the spending rules, more clubs might fall into line.
“They need a two-thirds majority to change the rules though, so it really depends on how many clubs at one particular moment are worried about PSR.
“If it’s not in their interests, they won’t care about the spirit of the rules – they’re going to vote out of self-interest, as is their right.”
